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Magic Leap trying to sell for $10B

227 points by manigandham 7y ago

wyxuan 7y ago
I feel like this is the new WeWork, and I almost guarantee Matt Levine will write about this tomorrow.
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elvinyung 7y ago
I guess the word "magic" is cursed. General Magic, GetMagic.com, and now this (not that we didn't see it coming)...
- hkmurakami 7y ago
  Magic the Gathering still going strong in its 26th year. Performing alchemy transmuting cardboard into gold.
  - monocasa 7y ago
    Magic the Gathering Online Exchange isn't, lol.
    - dannyw 7y ago
      The founder may very well have walked away with 200,000 bitcoins, so was it really cursed for the founders?
    - strbean 7y ago
      Well duh. Collectibles are basically non-fungible by definition. How are you going to have an automated exchange for them? /s
  - ivankolev 7y ago
    Also Industrial Light and Magic was/is? very successful.
  - doe88 7y ago
    Magic Radio as well, at least according to this article https://www.theguardian.com/tv-and-radio/2020/feb/04/magic-radio-indestructible-easy-listening-streaming https://www.theguardian.com/tv-and-radio/2020/feb/04/magic-r...
- Jack000 7y ago
  what happened to getmagic? I thought they're doing ok
JumpCrisscross 7y ago
Do we have any reporting on their runway?
deleted 7y ago
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IntemerateApe 7y ago
Does Neal Stephenson still work for/with them?
- mikepurvis 7y ago
  Page is up on his website, but no content there: https://www.nealstephenson.com/magic-leap.html https://www.nealstephenson.com/magic-leap.html
  - quakegen 7y ago
    Chief Futurist? kek
- chubot 7y ago
  Oh man, I didn't know he worked there... It would be interesting to read a candid retrospective from him ... although in all likelihood that might not happen for years if ever.
- sp332 7y ago
  Mentioned by another employee in December, so yeah. https://twitter.com/CathyHackl/status/1205961097360093185 https://twitter.com/CathyHackl/status/1205961097360093185
sdan 7y ago
Chase, google, and a ton of others (I think even pichai personally) put big bets a few years back. ML portrayed the aurora of Snapchat, but ultimately their secrecy killed them as well. Really reminds me of what happened with general magic (In secrecy w/ failed product and huge investor hype) I also interviewed with this a while back: they were clearly frantic from what I could trll
sdan 7y ago
Chase, google, and a ton of others (I think even pichai personally) put big bets a few years back. ML portrayed the aurora of Snapchat, but ultimately their secrecy killed them as well. Really reminds me of what happened with general magic (In secrecy w/ failed product and huge investor hype) I also interviewed with this a while back: they were clearly frantic from what I could tell
- mondoshawan 7y ago
  No, it wasn't secrecy that killed them. It was incompetence. Gross incompetence all throughout the company. Source: I worked there for a little over a year as a techlead/unofficial director -- even relocating to Florida.
  - sdan 7y ago
    Was there a reason why ML was in Florida?
    - mondoshawan 7y ago
      Because Rony wanted it to be, and no other reason. From a hiring perspective, it was an absolute nightmare.
      - VRay 7y ago
        Haha, I kept getting e-mails asking me to take a 3 month contract in "Plantation, Florida" Yeah, right
        PedroBatista 7y ago
        Hey, at least it's not a perpetual contract.
      - calbear81 7y ago
        I would've said yes to Florida at some point in my life. Florida is my backup state.
thrav 7y ago
I had a chance to use one of the Meta headsets (Magic’s primary competitor) a few months before they went under. Don’t get me wrong, it was pretty cool to walk around a 3D model wearing a headset, but the UX was nowhere close to practically useable and the picture quality was too faint to do anything serious. There’s undoubtedly some kind of value in the tech and IP, but I can’t see these things being used for much anytime soon. VR is light years ahead in terms of practical potential, and it’s not really getting off the ground either. I can’t see them getting anything remotely close to $10B.
- seanmcdirmid 7y ago
  The Oculus Quest has pretty much gone mainstream at this point, they even had supply shortages during Xmas that has yet to be recovered from (but mostly thanks to Corona).
  - MegaButts 7y ago
    Let's say they sold 200,000 for the Xmas season - that would put Oculus Quest sales at around 600,000. https://gamedaily.biz/article/1337/report-oculus-quest-has-sold-400000-units-will-leapfrog-pc-headsets-superdata https://gamedaily.biz/article/1337/report-oculus-quest-has-s... And it seems VR sales (EDIT: shipments) are hovering at around 6,000,000 a year (this tends to include the crappy VR headsets that are sometimes given away for free with high end phones). https://www.androidcentral.com/nearly-half-all-vr-headsets-sold-2019-were-oculus-quest https://www.androidcentral.com/nearly-half-all-vr-headsets-s... This sounds like a lot...but it might not be. To put things in perspective, the Kinect sold around 20,000,000 units and was considered a failure by Microsoft which is why they abandoned it. I think the parallels between the Kinect and VR is worth noting, since most are really accessories to something else (or used for very niche purposes). VR definitely isn't mainstream yet, but it might get there in a few years. I think Half Life Alyx will be an interesting juncture and maybe even a make-or-break point for VR.
    - jrs95 7y ago
      Kinect was also bundled with the Xbox One at launch though, and it was mandatory
empath75 7y ago
What is there to sell? What’s the product?
code4tee 7y ago
The company isn’t just magically worth billions because they want it to be and want to exit. That may have worked years ago but those days are over. They’re worth something relative to the revenues they’ve been able to generate. The IP is also worth something but given the cold shoulder from the FAANGs of the world probably not as much as they’d like. At some level these sales start to look like a stubborn buyer that’s asking far too much for their house. It will sell but a painful reset of valuation expectations is clearly required if one wants a sale to close.
- hnick 7y ago
  Yes I was wondering if it is normal for companies to just declare a sale price like this. I don't pay much attention but I can't remember hearing much about that (apart from implied valuations like Snapchat saying 'no').
- seppin 7y ago
  Also, when you are trying to sell that's not a good sign about your confidence it what you have. I think they all know it's bunk.
- nikanj 7y ago
  Ultimately, companies are not sold, they are bought. Without a willing buyer, they have no hope
  - asdfasgasdgasdg 7y ago
    > Ultimately, companies are not sold, they are bought. What does that even mean? Companies are both sold and bought. One implies the other. There are always willing buyers for entities with non-negative value. Hell, I'm a willing buyer for Magic Leap, at the right price.
    - manigandham 7y ago
      It's more nuanced. A company being "bought" means that an acquirer actively sought them out because they were such an attractive target. This is the best position to be in. A company being "sold" means that they don't have active interest and instead offer themselves up as a last resort for whatever price they can get. Usually everything is liquidated at the absolute minimum to avoid completely shutting down the company and still marking it as an "exit" on the investors books.
pcurve 7y ago
I'm thinking early investors have largely written this off in their mind. They would probably be happy to take small fraction of $2 billion they put in at this point. Realistically, would they even get $200 million?
- whoisjuan 7y ago
  The device is pretty good. It really achieves some tremendous stuff and has a highly polished user experience, so I'd say that just by the merit of its IP it's worth at least $200 MM. I think their problem is basically timing. Nobody wants this thing right now. Nobody wants it in that specific form factor. And nobody wants to create content for a platform with such a high price point and unexpected future. It's an egg and chicken situation. I can see why Facebook doesn't want them or need them since they probably have been developing parallel IP in their Oculus division. Apple may be also very deep into the development and exploration of its own AR (which is already evident by accelerated development of ARKit). Microsoft has its own competitor for years (Hololens). So I think is really a problem of who might want all this IP and who can use it meaningfully to create a solid pipeline of AR products. Again. Their problem is definitely timing. Consumers, content creators, and companies definitely want this type of technology. But not until they can have something with the same footprint as a pair of reading glasses. I think we are still very far from that.
  - ericd 7y ago
    I would think Google would want it, instant visual product search using the cameras is probably one of the killer apps for this on the consumer side. And oh, the data collection opportunities about the real world would have them salivating.
    - Jasper_ 7y ago
      Yeah, that was the promise of Google Glass. And they killed that off before they got really into killing things off for fun. Nobody wanted it.
      - 7y ago
yalogin 7y ago
This was the outcome for a long time now. They had a lot of infighting to begin with. They couldn’t agree on who leads and where the development needs to happen. I predicted that they will sell back to google for a discount a while ago and it still might happen.
ausjke 7y ago
The writing was on the wall for a few years, to me it is the WeWork version of VR.
- Tepix 7y ago
  They're into AR, not VR. It seems that these two markets will remain separate.
aaron695 7y ago
AR has no use case. None. Feel free to name one. So better than VR, doesn't need generic human level artificial intelligence, and wouldn't work as well from just talking in your ear.
- PopeDotNinja 7y ago
  Snapchat filters.
  - aaron695 7y ago
    Snapchat filter are so you can force your filters on others. I assure you when everyone is forcing theirs on you, you will turn it off.
- wpietri 7y ago
  I agree it may not have many consumer use cases, but there are a fair number of industrial ones. Boeing has been experimenting with AR for decades [1], and they're still working on it: https://www.boeing.com/features/2018/01/augmented-reality-01-18.page https://www.boeing.com/features/2018/01/augmented-reality-01... And I think that points at some consumer uses, too. Basically anything where people are already using their hands has AR potential. When I still owned a car, I would have loved to have the repair manual info overlaid on whatever I was looking at. But so far I don't think anybody's found much compelling enough to pay what AR systems cost. [1] See "Fundamentals of Wearable Computers and Augmented Reality" ch 14.
  - aaron695 7y ago
    AR won't get you manuals. There will be less AR manuals since they will have to produce both paper and AR. To recognise parts will take pretty good pattern recognition, but possible, what can a phone do now? But the next step will take AI at a fairly high level if it's guiding you through a process. If a camera can look at a motor and 'see' what to do, then just a voice telling you want to do will be close to brilliant and useful now, camera and speakers are easy. True a overlay would be better, but the underline tech is AI, if you can make this AI then no need for AR at this stage, sell it now if it's possible.
tritip 7y ago
Shocker
rasz 7y ago
just like Playground Global, Andy Rubins VC firm taking over CastAR and trying to pump valuation without releasing any product, ending in whole thing burning to the ground with IP sold off for pennies on the dollar back to founders and original IP creators.
byteface 7y ago
Trying to find the flute meme. Has Winston Smith removed it?
finphil 7y ago
The keyword right there is without a doubt "trying" (^_^)
mohankumar246 7y ago
This is just going to a We Work in headset category. Along with the end of bull market today, many startups burning cash will go kaput. Their tech is not worth more than a few hundred million $. It would have been it worth a lot had it succeeded, unfortunately didn't. Maybe hololens/quest have a shot.
pjbk 7y ago
Funny because I'm still getting probed by their recruiters almost on a monthly basis for several of their positions. Perhaps because I live 5 minutes away from their HQ. ;-) It's a shame but not a surprise. I have friends and acquaintances that have worked or still work there, and yet I wouldn't vent details of what I know here, everyone knows they have been struggling with their technology, overpromise and growth. Archetype of the "too much money in too little time" syndrome, and a despair to deliver and build a successful company. Be careful with what you wish for. I don't know Abovitz personally, though I have worked with people who worked with or under him since the early Z-KAT days and he is well regarded. Contrary to what most think about engineers in South Florida (or Florida in general), we have some very capable people here. Companies complain that they can't find good talent. However most of the time they cannot put their money where their mouth is and commit over the local "market price", which is comparatively low, to secure a good hire. It has certainly been an issue in my career, indeed. But guess what? We faced the same difficulties in one of my companies finding the right people when I lived in the Bay area a couple of years ago. The answer is not that simple. Having worked mostly in startups through my life, from the outside it amazes me how they were trying to spread out so early. When I first heard about them they were pitching movie producers, but after they got their first $50M things started going crazy. I once dated a girl who was a writer producing fancy literary content far before they had shipped anything. This was way before they hired Stephenson. I have experience in medical devices and robotics, and their recruiters have contacted me offering positions for healthcare applications, and also a very pushy one was trying to convince me to move to their Sunnyvale office where they have a robotics team. Think industrial manipulators. Then they go out and sue their once employee Gary Bradski for doing his usual Bradski things and for which he is lauded in the valley... but not here it seems. Certainly they have management problems due to lack of experience. It would be painful if they fail. They have been the most funded tech company in the state and at least they managed to ship, something many startups are unable to demonstrate.
- nikhizzle 7y ago
  I am also close to their hq. Would love to get together and talk tech. Email in profile.
floatinglotus 7y ago
They’ll be lucky to get $500M
terryf 7y ago
The more bad news like this is coming out, makes me wonder what did they show to the initial investors - it MUST have been something incredible, that was probably too bulky to wear and that they didn't manage to miniaturise. I really hope someone talks about that after they either go broke or get acquired.
- DonHopkins 7y ago
  >makes me wonder what did they show to the initial investors - it MUST have been something incredible Cocaine. https://www.youtube.com/watch?v=w8J5BWL8oJY https://www.youtube.com/watch?v=w8J5BWL8oJY
- duxup 7y ago
  With a lot of these that is what I want to know. I don't want to know why it failed, honestly for most of these you can look at their product and see how there's just not demand and etc. What I want to know is what investors and everyone THOUGHT would change about the product, use case, how the world would react to this new thing ...
baybal2 7y ago
By the way, it's not a secret in the electronics circles here that Apple is still working on its own version of Magicleapy VR goggles. For example, they made an entire new semiconductor unit just to make microled displays for it. They also been hiring, and buying companies in light field imaging field for years now, and they may add a light field imaging/display into the mix. I think Magicleap knows now that Apple is miles ahead of them, and tries to sell while they still can
- janoc 7y ago
  Why is everyone talking about the still vaporware Apple goggles when Microsoft is actually selling Hololens (a direct competitor to Magic Leap) for longer than ML is even on the market. Yeah, I do get it, Apple and all, but this is ignoring the elephant in the room.
  - hurricanetc 7y ago
    You cannot directly purchase the Hololens yet, and even if you could it’s $3,500.
    - tw04 7y ago
      The price tag is exactly why you can't "buy directly" as you say. It's not currently intended for consumers - they understand the price point makes that a non-starter. Given that the COGs aren't going down anytime soon, I'm in complete agreement with that choice. On the flip side, if you've got an actual business case for hololens, acquiring them is rather trivial. And quite frankly for the use-cases I've seen hololens deployed, $3,500 a pair is barely a rounding error in the project budget.
    - jorvi 7y ago
      It is slightly laughable to complain about Microsoft selling their AR glasses for €3500 when their direct competitor would (will?) be Apple, who have no qualms selling a €1000 aluminium stand or €50 000 desktop computer. Expect a solid premium over Microsoft's pricing.
kriro 7y ago
I've sold some AR projects to customers. Just product visualizations for trade fairs etc. nothing too fancy. It's cool and fun to work with but my takeaway was that for many practical applications it's pretty cost/time intensive to work on the non-technical parts of the projects (tuning the models and scenes so they look photorealistic). The devil is in the details. For example our typical projects involved getting CAD data from customers and turning it into a fairly simple AR-App. Most of the time was spent on fixing the models in various ways (and that's fairly hard to automate imo). UX is also really tricky. Reminds me a bit of the cost of working with data vs. the actual models in ML. The models and tuning them and playing with them is the cool stuff but most of the competitive advantages (imo) come from mastering the data part. I learned a lot from my ventures into AR and it was fun and I've kept a mindset of pretending there was an AR device in contact-lense form to brainstorm what one could do with this breakthrough every now and then. But there's really not much beyond "novelty effect" and gaming I see as interesting products today. Even in areas where AR solutions are deployed in industry (warehousing and logistics), I feel that less glamorous solutions would provide similar benefits. All that being said, long term I'm quite optimistic that the technology will bring very interesting changes and things I cannot imagine right now.
rburhum 7y ago
I am going to do a reality check that will probably be unpopular, but it doesn’t matter... While MS had products like hololens out, Magic Leap was still “in stealth”. This is the same company that was “worth billions” before they even released a product or before they had made public whatever product they wanted to sell. The marketing videos they produced early on (which were impressive) look nothing like the technology that was released years later. Look up the expectation vs reality videos of if you want a laugh. Now they want out at a crazy valuation. When the economy is “good” and there is plenty of dumb cash lying around (think these past years of bubble build up), an expert sweet talker is able to command money away from the vision fund type of folks. However, then the situation is like we are right now, we go back to the basics... things like market-fit, income, revenue, growth, sustainability... the healthy business. We need the bubbles of the Magic Leaps, WeWorks and all the other unsustainable unicorn startups to burst. This is what will bring us back to industry sanity. The first dotcom bubble burst made our industry better. I hope this one does, too.
hardwaresofton 7y ago
Not in this market
moron4hire 7y ago
I have both a Magic Leap One and a HoloLens 1. I've done work on both. I also have every major VR headset, which I have also written software for each. I've been working in AR for about 10 years, and VR for almost 6. And honestly, with the latest OS updates, the HoloLens 1, even today, is still the better device. You can compare specs on a sheet of paper all day long, but there are fundamental flaws in the Magic Leap hardware and software that prevent it from being a good user experience. The HoloLens, on the other hand, is just old. Magic Leap's battery/compute pack turned out to not give it an appreciably longer battery life, while also making the device uncomfortable, as the cable constantly tugs on the back of your head. The HoloLens isn't comfortable, either, but that's mostly because the vast majority of people completely ignored the little, rubber strap that came in the case that you attach across your to take the bulk of the weight of the device. The WiFi and Bluetooth an my ML are constantly failing. I've used three different units and have had the same experience on all of them. The controller constantly loses tracking. It uses magnetic tracking and it just doesn't do well. Also, the sensor is on the right side of the headset, and it is legitimately worse to use the controller in your left hand. It's also way too complicated for just-a-pointer, while not being complicated enough for a bespoke user input device. HoloLens has a clicker instead. It's superfluous, but it does the job and doesn't fail. The hand tracking is too broken to actually use. HoloLens' hand tracking isn't anything to write home about, but I've never encountered it doing something blatantly wrong. It's just slow. Magic Leap's is similarly slow and often wrong. This goes hand-in-hand with the ML SDK being poorly documented and rather incomplete. One way HoloLens gets around its rather limited user input capability is by giving you voice recognition out of the box. And in writing software, it's incredibly easy to setup. It's also relatively easy (though takes some thoughful design) to create a speech-based UI that works reliably. Magic Leap, on the other hand, talks about how great it would be to have speech-recognition, but offers nothing in their 1st-party demos to demonstrate it and nothing in their SDK to implement it. The operating system on ML is a hacked-up Android system. I'm sooooo over trying to do 3D graphics on Android systems. All the standalone VR headsets are also a gigantic pain for developing software. If you've ever developed software for the HoloLens, it's a joy in comparison. And Microsoft did a lot to make 2D applications an integral, usable, and useful part of Windows Holographic. While Magic Leap has its own version of that feature, they bury the documentation and don't provide any good samples. Whereas, on HoloLens, you can basically run any pure UWP app, whether it was made for the HoloLens or not.
TheMagicHorsey 7y ago
I've got news for Magic Leap. Nobody is spending $10B on anything as speculative as AR/VR right now, with the macro environment being what it is. Maybe $1B.
maedla 7y ago
people won't get into wearable AR until its a contact lens
grepory 7y ago
In _this_ economy? Bahahahahahahaha
m3kw9 7y ago
Try 1 Billion

227 points by manigandham 7y ago

wyxuan 7y ago

I feel like this is the new WeWork, and I almost guarantee Matt Levine will write about this tomorrow.

deleted 7y ago

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elvinyung 7y ago

I guess the word "magic" is cursed. General Magic, GetMagic.com, and now this (not that we didn't see it coming)...

hkmurakami 7y ago
Magic the Gathering still going strong in its 26th year. Performing alchemy transmuting cardboard into gold.
- monocasa 7y ago
  Magic the Gathering Online Exchange isn't, lol.
  - dannyw 7y ago
    The founder may very well have walked away with 200,000 bitcoins, so was it really cursed for the founders?
  - strbean 7y ago
    Well duh. Collectibles are basically non-fungible by definition. How are you going to have an automated exchange for them? /s
- ivankolev 7y ago
  Also Industrial Light and Magic was/is? very successful.
- doe88 7y ago
  Magic Radio as well, at least according to this article https://www.theguardian.com/tv-and-radio/2020/feb/04/magic-radio-indestructible-easy-listening-streaming https://www.theguardian.com/tv-and-radio/2020/feb/04/magic-r...
Jack000 7y ago
what happened to getmagic? I thought they're doing ok

JumpCrisscross 7y ago

Do we have any reporting on their runway?

deleted 7y ago

[deleted]

IntemerateApe 7y ago

Does Neal Stephenson still work for/with them?

mikepurvis 7y ago
Page is up on his website, but no content there: https://www.nealstephenson.com/magic-leap.html https://www.nealstephenson.com/magic-leap.html
- quakegen 7y ago
  Chief Futurist? kek
chubot 7y ago
Oh man, I didn't know he worked there... It would be interesting to read a candid retrospective from him ... although in all likelihood that might not happen for years if ever.
sp332 7y ago
Mentioned by another employee in December, so yeah. https://twitter.com/CathyHackl/status/1205961097360093185 https://twitter.com/CathyHackl/status/1205961097360093185

sdan 7y ago

Chase, google, and a ton of others (I think even pichai personally) put big bets a few years back. ML portrayed the aurora of Snapchat, but ultimately their secrecy killed them as well. Really reminds me of what happened with general magic (In secrecy w/ failed product and huge investor hype) I also interviewed with this a while back: they were clearly frantic from what I could trll

sdan 7y ago

mondoshawan 7y ago
No, it wasn't secrecy that killed them. It was incompetence. Gross incompetence all throughout the company. Source: I worked there for a little over a year as a techlead/unofficial director -- even relocating to Florida.
- sdan 7y ago
  Was there a reason why ML was in Florida?
  - mondoshawan 7y ago
    Because Rony wanted it to be, and no other reason. From a hiring perspective, it was an absolute nightmare.
    - VRay 7y ago
      Haha, I kept getting e-mails asking me to take a 3 month contract in "Plantation, Florida" Yeah, right
      - PedroBatista 7y ago
        Hey, at least it's not a perpetual contract.
    - calbear81 7y ago
      I would've said yes to Florida at some point in my life. Florida is my backup state.

thrav 7y ago

I had a chance to use one of the Meta headsets (Magic’s primary competitor) a few months before they went under. Don’t get me wrong, it was pretty cool to walk around a 3D model wearing a headset, but the UX was nowhere close to practically useable and the picture quality was too faint to do anything serious. There’s undoubtedly some kind of value in the tech and IP, but I can’t see these things being used for much anytime soon. VR is light years ahead in terms of practical potential, and it’s not really getting off the ground either. I can’t see them getting anything remotely close to $10B.

seanmcdirmid 7y ago
The Oculus Quest has pretty much gone mainstream at this point, they even had supply shortages during Xmas that has yet to be recovered from (but mostly thanks to Corona).
- MegaButts 7y ago
  Let's say they sold 200,000 for the Xmas season - that would put Oculus Quest sales at around 600,000. https://gamedaily.biz/article/1337/report-oculus-quest-has-sold-400000-units-will-leapfrog-pc-headsets-superdata https://gamedaily.biz/article/1337/report-oculus-quest-has-s... And it seems VR sales (EDIT: shipments) are hovering at around 6,000,000 a year (this tends to include the crappy VR headsets that are sometimes given away for free with high end phones). https://www.androidcentral.com/nearly-half-all-vr-headsets-sold-2019-were-oculus-quest https://www.androidcentral.com/nearly-half-all-vr-headsets-s... This sounds like a lot...but it might not be. To put things in perspective, the Kinect sold around 20,000,000 units and was considered a failure by Microsoft which is why they abandoned it. I think the parallels between the Kinect and VR is worth noting, since most are really accessories to something else (or used for very niche purposes). VR definitely isn't mainstream yet, but it might get there in a few years. I think Half Life Alyx will be an interesting juncture and maybe even a make-or-break point for VR.
  - jrs95 7y ago
    Kinect was also bundled with the Xbox One at launch though, and it was mandatory

empath75 7y ago

What is there to sell? What’s the product?

code4tee 7y ago

The company isn’t just magically worth billions because they want it to be and want to exit. That may have worked years ago but those days are over. They’re worth something relative to the revenues they’ve been able to generate. The IP is also worth something but given the cold shoulder from the FAANGs of the world probably not as much as they’d like. At some level these sales start to look like a stubborn buyer that’s asking far too much for their house. It will sell but a painful reset of valuation expectations is clearly required if one wants a sale to close.

hnick 7y ago
Yes I was wondering if it is normal for companies to just declare a sale price like this. I don't pay much attention but I can't remember hearing much about that (apart from implied valuations like Snapchat saying 'no').
seppin 7y ago
Also, when you are trying to sell that's not a good sign about your confidence it what you have. I think they all know it's bunk.
nikanj 7y ago
Ultimately, companies are not sold, they are bought. Without a willing buyer, they have no hope
- asdfasgasdgasdg 7y ago
  > Ultimately, companies are not sold, they are bought. What does that even mean? Companies are both sold and bought. One implies the other. There are always willing buyers for entities with non-negative value. Hell, I'm a willing buyer for Magic Leap, at the right price.
  - manigandham 7y ago
    It's more nuanced. A company being "bought" means that an acquirer actively sought them out because they were such an attractive target. This is the best position to be in. A company being "sold" means that they don't have active interest and instead offer themselves up as a last resort for whatever price they can get. Usually everything is liquidated at the absolute minimum to avoid completely shutting down the company and still marking it as an "exit" on the investors books.

pcurve 7y ago

I'm thinking early investors have largely written this off in their mind. They would probably be happy to take small fraction of $2 billion they put in at this point. Realistically, would they even get $200 million?

whoisjuan 7y ago
The device is pretty good. It really achieves some tremendous stuff and has a highly polished user experience, so I'd say that just by the merit of its IP it's worth at least $200 MM. I think their problem is basically timing. Nobody wants this thing right now. Nobody wants it in that specific form factor. And nobody wants to create content for a platform with such a high price point and unexpected future. It's an egg and chicken situation. I can see why Facebook doesn't want them or need them since they probably have been developing parallel IP in their Oculus division. Apple may be also very deep into the development and exploration of its own AR (which is already evident by accelerated development of ARKit). Microsoft has its own competitor for years (Hololens). So I think is really a problem of who might want all this IP and who can use it meaningfully to create a solid pipeline of AR products. Again. Their problem is definitely timing. Consumers, content creators, and companies definitely want this type of technology. But not until they can have something with the same footprint as a pair of reading glasses. I think we are still very far from that.
- ericd 7y ago
  I would think Google would want it, instant visual product search using the cameras is probably one of the killer apps for this on the consumer side. And oh, the data collection opportunities about the real world would have them salivating.
  - Jasper_ 7y ago
    Yeah, that was the promise of Google Glass. And they killed that off before they got really into killing things off for fun. Nobody wanted it.
    - 7y ago

yalogin 7y ago

This was the outcome for a long time now. They had a lot of infighting to begin with. They couldn’t agree on who leads and where the development needs to happen. I predicted that they will sell back to google for a discount a while ago and it still might happen.

ausjke 7y ago

The writing was on the wall for a few years, to me it is the WeWork version of VR.

Tepix 7y ago
They're into AR, not VR. It seems that these two markets will remain separate.

aaron695 7y ago

AR has no use case. None. Feel free to name one. So better than VR, doesn't need generic human level artificial intelligence, and wouldn't work as well from just talking in your ear.

PopeDotNinja 7y ago
Snapchat filters.
- aaron695 7y ago
  Snapchat filter are so you can force your filters on others. I assure you when everyone is forcing theirs on you, you will turn it off.
wpietri 7y ago
I agree it may not have many consumer use cases, but there are a fair number of industrial ones. Boeing has been experimenting with AR for decades [1], and they're still working on it: https://www.boeing.com/features/2018/01/augmented-reality-01-18.page https://www.boeing.com/features/2018/01/augmented-reality-01... And I think that points at some consumer uses, too. Basically anything where people are already using their hands has AR potential. When I still owned a car, I would have loved to have the repair manual info overlaid on whatever I was looking at. But so far I don't think anybody's found much compelling enough to pay what AR systems cost. [1] See "Fundamentals of Wearable Computers and Augmented Reality" ch 14.
- aaron695 7y ago
  AR won't get you manuals. There will be less AR manuals since they will have to produce both paper and AR. To recognise parts will take pretty good pattern recognition, but possible, what can a phone do now? But the next step will take AI at a fairly high level if it's guiding you through a process. If a camera can look at a motor and 'see' what to do, then just a voice telling you want to do will be close to brilliant and useful now, camera and speakers are easy. True a overlay would be better, but the underline tech is AI, if you can make this AI then no need for AR at this stage, sell it now if it's possible.

tritip 7y ago

Shocker

rasz 7y ago

just like Playground Global, Andy Rubins VC firm taking over CastAR and trying to pump valuation without releasing any product, ending in whole thing burning to the ground with IP sold off for pennies on the dollar back to founders and original IP creators.

byteface 7y ago

Trying to find the flute meme. Has Winston Smith removed it?

finphil 7y ago

The keyword right there is without a doubt "trying" (^_^)

mohankumar246 7y ago

This is just going to a We Work in headset category. Along with the end of bull market today, many startups burning cash will go kaput. Their tech is not worth more than a few hundred million $. It would have been it worth a lot had it succeeded, unfortunately didn't. Maybe hololens/quest have a shot.

pjbk 7y ago

Funny because I'm still getting probed by their recruiters almost on a monthly basis for several of their positions. Perhaps because I live 5 minutes away from their HQ. ;-) It's a shame but not a surprise. I have friends and acquaintances that have worked or still work there, and yet I wouldn't vent details of what I know here, everyone knows they have been struggling with their technology, overpromise and growth. Archetype of the "too much money in too little time" syndrome, and a despair to deliver and build a successful company. Be careful with what you wish for. I don't know Abovitz personally, though I have worked with people who worked with or under him since the early Z-KAT days and he is well regarded. Contrary to what most think about engineers in South Florida (or Florida in general), we have some very capable people here. Companies complain that they can't find good talent. However most of the time they cannot put their money where their mouth is and commit over the local "market price", which is comparatively low, to secure a good hire. It has certainly been an issue in my career, indeed. But guess what? We faced the same difficulties in one of my companies finding the right people when I lived in the Bay area a couple of years ago. The answer is not that simple. Having worked mostly in startups through my life, from the outside it amazes me how they were trying to spread out so early. When I first heard about them they were pitching movie producers, but after they got their first $50M things started going crazy. I once dated a girl who was a writer producing fancy literary content far before they had shipped anything. This was way before they hired Stephenson. I have experience in medical devices and robotics, and their recruiters have contacted me offering positions for healthcare applications, and also a very pushy one was trying to convince me to move to their Sunnyvale office where they have a robotics team. Think industrial manipulators. Then they go out and sue their once employee Gary Bradski for doing his usual Bradski things and for which he is lauded in the valley... but not here it seems. Certainly they have management problems due to lack of experience. It would be painful if they fail. They have been the most funded tech company in the state and at least they managed to ship, something many startups are unable to demonstrate.

nikhizzle 7y ago
I am also close to their hq. Would love to get together and talk tech. Email in profile.

floatinglotus 7y ago

They’ll be lucky to get $500M

terryf 7y ago

The more bad news like this is coming out, makes me wonder what did they show to the initial investors - it MUST have been something incredible, that was probably too bulky to wear and that they didn't manage to miniaturise. I really hope someone talks about that after they either go broke or get acquired.

DonHopkins 7y ago
>makes me wonder what did they show to the initial investors - it MUST have been something incredible Cocaine. https://www.youtube.com/watch?v=w8J5BWL8oJY https://www.youtube.com/watch?v=w8J5BWL8oJY
duxup 7y ago
With a lot of these that is what I want to know. I don't want to know why it failed, honestly for most of these you can look at their product and see how there's just not demand and etc. What I want to know is what investors and everyone THOUGHT would change about the product, use case, how the world would react to this new thing ...

baybal2 7y ago

By the way, it's not a secret in the electronics circles here that Apple is still working on its own version of Magicleapy VR goggles. For example, they made an entire new semiconductor unit just to make microled displays for it. They also been hiring, and buying companies in light field imaging field for years now, and they may add a light field imaging/display into the mix. I think Magicleap knows now that Apple is miles ahead of them, and tries to sell while they still can

janoc 7y ago
Why is everyone talking about the still vaporware Apple goggles when Microsoft is actually selling Hololens (a direct competitor to Magic Leap) for longer than ML is even on the market. Yeah, I do get it, Apple and all, but this is ignoring the elephant in the room.
- hurricanetc 7y ago
  You cannot directly purchase the Hololens yet, and even if you could it’s $3,500.
  - tw04 7y ago
    The price tag is exactly why you can't "buy directly" as you say. It's not currently intended for consumers - they understand the price point makes that a non-starter. Given that the COGs aren't going down anytime soon, I'm in complete agreement with that choice. On the flip side, if you've got an actual business case for hololens, acquiring them is rather trivial. And quite frankly for the use-cases I've seen hololens deployed, $3,500 a pair is barely a rounding error in the project budget.
  - jorvi 7y ago
    It is slightly laughable to complain about Microsoft selling their AR glasses for €3500 when their direct competitor would (will?) be Apple, who have no qualms selling a €1000 aluminium stand or €50 000 desktop computer. Expect a solid premium over Microsoft's pricing.

kriro 7y ago

I've sold some AR projects to customers. Just product visualizations for trade fairs etc. nothing too fancy. It's cool and fun to work with but my takeaway was that for many practical applications it's pretty cost/time intensive to work on the non-technical parts of the projects (tuning the models and scenes so they look photorealistic). The devil is in the details. For example our typical projects involved getting CAD data from customers and turning it into a fairly simple AR-App. Most of the time was spent on fixing the models in various ways (and that's fairly hard to automate imo). UX is also really tricky. Reminds me a bit of the cost of working with data vs. the actual models in ML. The models and tuning them and playing with them is the cool stuff but most of the competitive advantages (imo) come from mastering the data part. I learned a lot from my ventures into AR and it was fun and I've kept a mindset of pretending there was an AR device in contact-lense form to brainstorm what one could do with this breakthrough every now and then. But there's really not much beyond "novelty effect" and gaming I see as interesting products today. Even in areas where AR solutions are deployed in industry (warehousing and logistics), I feel that less glamorous solutions would provide similar benefits. All that being said, long term I'm quite optimistic that the technology will bring very interesting changes and things I cannot imagine right now.

rburhum 7y ago

I am going to do a reality check that will probably be unpopular, but it doesn’t matter... While MS had products like hololens out, Magic Leap was still “in stealth”. This is the same company that was “worth billions” before they even released a product or before they had made public whatever product they wanted to sell. The marketing videos they produced early on (which were impressive) look nothing like the technology that was released years later. Look up the expectation vs reality videos of if you want a laugh. Now they want out at a crazy valuation. When the economy is “good” and there is plenty of dumb cash lying around (think these past years of bubble build up), an expert sweet talker is able to command money away from the vision fund type of folks. However, then the situation is like we are right now, we go back to the basics... things like market-fit, income, revenue, growth, sustainability... the healthy business. We need the bubbles of the Magic Leaps, WeWorks and all the other unsustainable unicorn startups to burst. This is what will bring us back to industry sanity. The first dotcom bubble burst made our industry better. I hope this one does, too.

hardwaresofton 7y ago

Not in this market

moron4hire 7y ago

I have both a Magic Leap One and a HoloLens 1. I've done work on both. I also have every major VR headset, which I have also written software for each. I've been working in AR for about 10 years, and VR for almost 6. And honestly, with the latest OS updates, the HoloLens 1, even today, is still the better device. You can compare specs on a sheet of paper all day long, but there are fundamental flaws in the Magic Leap hardware and software that prevent it from being a good user experience. The HoloLens, on the other hand, is just old. Magic Leap's battery/compute pack turned out to not give it an appreciably longer battery life, while also making the device uncomfortable, as the cable constantly tugs on the back of your head. The HoloLens isn't comfortable, either, but that's mostly because the vast majority of people completely ignored the little, rubber strap that came in the case that you attach across your to take the bulk of the weight of the device. The WiFi and Bluetooth an my ML are constantly failing. I've used three different units and have had the same experience on all of them. The controller constantly loses tracking. It uses magnetic tracking and it just doesn't do well. Also, the sensor is on the right side of the headset, and it is legitimately worse to use the controller in your left hand. It's also way too complicated for just-a-pointer, while not being complicated enough for a bespoke user input device. HoloLens has a clicker instead. It's superfluous, but it does the job and doesn't fail. The hand tracking is too broken to actually use. HoloLens' hand tracking isn't anything to write home about, but I've never encountered it doing something blatantly wrong. It's just slow. Magic Leap's is similarly slow and often wrong. This goes hand-in-hand with the ML SDK being poorly documented and rather incomplete. One way HoloLens gets around its rather limited user input capability is by giving you voice recognition out of the box. And in writing software, it's incredibly easy to setup. It's also relatively easy (though takes some thoughful design) to create a speech-based UI that works reliably. Magic Leap, on the other hand, talks about how great it would be to have speech-recognition, but offers nothing in their 1st-party demos to demonstrate it and nothing in their SDK to implement it. The operating system on ML is a hacked-up Android system. I'm sooooo over trying to do 3D graphics on Android systems. All the standalone VR headsets are also a gigantic pain for developing software. If you've ever developed software for the HoloLens, it's a joy in comparison. And Microsoft did a lot to make 2D applications an integral, usable, and useful part of Windows Holographic. While Magic Leap has its own version of that feature, they bury the documentation and don't provide any good samples. Whereas, on HoloLens, you can basically run any pure UWP app, whether it was made for the HoloLens or not.

TheMagicHorsey 7y ago

I've got news for Magic Leap. Nobody is spending $10B on anything as speculative as AR/VR right now, with the macro environment being what it is. Maybe $1B.

maedla 7y ago

people won't get into wearable AR until its a contact lens

grepory 7y ago

In _this_ economy? Bahahahahahahaha

m3kw9 7y ago

Try 1 Billion