Last week, the tech world was startled by the news that the much-hyped startup Magic Leap is much further from releasing its augmented reality technology than previously thought. In addition, it now appears that Magic Leap’s headset is currently “noticeably inferior” to Microsoft’s HoloLens, which is not helped by the fact that the HoloLens is already available to developers who wish to create apps.

And just in case there wasn’t enough drama surrounding the company, it also appears that one of its demo videos, billed as “just another day at the office”, was in fact made using special effects by Weta Workshop. This promotional video caused an outpouring of negative publicity, since it was used not only to generate awareness of the company, but to recruit employees as well.

This is not good news for a company valued at $4.5 billion, and whose major investors include Google and Alibaba. The impact of the revelations on Magic Leap’s relationships with its investors remains to be seen, but it is not unlikely that they will be held to a greater level of accountability and oversight.

Just an overreaction?

At first sight, it may seem that all the hubbub about the video is overblown – after all, the video’s main purpose was to create hype, not mislead investors. Potential investors made their decisions to bankroll the company based on actual product demonstrations, not the demo. Benedict Evans, an investor from the venture capital firm Andreessen Horowitz (which invested in Magic Leap) called Magic Leap “one of only a handful of genuine ‘holy shit I can’t believe I’m seeing this’ moments I’ve had as an adult.”

Magic Leap’s decision to use special effects to mimic augmented reality instead of showcasing their product was meant to hide the fact that the technology used in their final product was unlikely to be the same as the technology used in their initial prototype: a device about the size of a refrigerator nicknamed the “Beast”. This is important because the secret sauce that made Magic Leap different from its competitor the HoloLens was its fiber-scanning display, which works by shining a laser through a rapidly-moving fiber optic cable to create images. The problem that Magic Leap ran into was an inability to shrink the Beast down to a size suitable for wearables that would not compromising the fiber-scanning display.

The most recent prototype is reported to be about the size of a pair of glasses; however, very few people have had access to it. Instead, the AR headset given to reporters to test out is a large helmet version. Unlike the HoloLens, the helmet needs to be tethered to a computer using multiple wires, and those who used it reported that the images were “blurry and jittery” whenever they moved their heads.  


This is not meant to be an analysis of the technology itself, but merely a warning about the potential issues involved with investing in a highly complex, potentially ground-breaking product. Then again, that’s the risk associated with any product that has the potential to revolutionize the way we live our lives. Maybe Magic Leap will never be able to create a product that meets everyone’s expectations, or even its own. The nature of the tech world, however, means that people are constantly innovating and coming up with new ideas. So what if Magic Leap doesn’t live up to the hype? Someday soon, someone else will.