ACEIY Acer Inc (PK)

By Jay Greene 

SAN FRANCISCO -- Microsoft Corp. enlisted one of the world's largest consumer electronics makers, Samsung Electronics Co., as it works to crack the emerging virtual-reality market.

At an event here Tuesday hosted by Microsoft, Samsung introduced HMD Odyssey, a virtual-reality headset that uses Microsoft's Windows Mixed Reality, a piece of Windows 10 that enables immersive computing through headsets and other devices.

Samsung joins Acer Inc., Dell Inc., HP Inc. and Lenovo Group Ltd. in building headsets on top of the Windows platform. The devices all use virtual-reality technology, which occludes users view of the real world and immerses them in digitally generated sights and sounds.

Samsung is an important partner for Microsoft, which is ramping up in the virtual- and augmented-reality markets where it will compete against Apple Inc., Alphabet Inc.'s Google, Facebook Inc. and others. Samsung is already a leader in virtual reality with its Gear VR device that runs Facebook's Oculus technology.

Samsung Electronics America vice president and general manager Alanna Cotton said the company "is committed to working across platforms."

The Odyssey, which comes with two controllers, features sharp OLED displays, rather than the LCD displays used on lower-priced headsets. It includes headphones and a built-in microphone, and can be preordered for $499 on Oct. 3. It will be available Nov. 6.

Headsets from Microsoft's four other partners, which the company had previously said would start at $399, can also be preordered Oct. 3, and will be available Oct. 17.

Microsoft is trying to build an entire technology ecosystem for virtual and augmented reality, and put itself at the center. It was among the first to jump into the business, introducing its HoloLens augmented-reality headset nearly three years ago, though the device isn't commercially available yet.

Windows Mixed Reality, part of the Windows 10 operating system, aims to serve as the technical underpinnings for both VR devices and augmented-reality devices such as the HoloLens, which overlays digital elements onto a person's view of the real world.

Alex Kipman, a leader on Microsoft's HoloLens team, touted the company's bid to operate in both markets. "We are the only company to embrace the entire continuum of mixed reality," Mr. Kipman said during the event.

The combined market is one analysts believe is set to explode. Market-research firm International Data Corp. forecasts sales of 13.7 million virtual- and augmented-reality headsets this year, and expects that to jump to 81.2 million units by 2021, a compounded annual growth rate of 56%.

Microsoft will vie with Apple, which is nudging developers to create applications for its augmented-reality development platform, ARKit. Google, too, is in the augmented-reality market with its ARCore, a tool to help developers on its Android mobile-device platform create augmented-reality apps.

Microsoft is also working to add gaming content to its ecosystem. In August, the company announced a deal to bring games from Valve Corp.'s popular Steam business to Windows virtual- and augmented-reality devices.

Microsoft also announced the acquisition of AltspaceVR Inc., a social-networking service where users can interact in a virtual space even if in separate locations. AltspaceVR had said in July it was shutting down.

Mr. Kipman announced the deal in an Altspace virtual environment, where he connected with Terry Myerson, Microsoft's executive vice president in charge of Windows, in Redmond, Wash., and AltspaceVR founder and Chief Executive Eric Romo in Santa Clara, Calif.

Terms of the deal, sealed with a virtual fist bump, weren't disclosed. Mr. Kipman said the majority of Altspace employees will join Microsoft. He doesn't anticipate any significant changes at the company.

"Day 1 is keeping them precisely where they are," Mr. Kipman said. "They have a very vibrant community in virtual reality."

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

October 03, 2017 16:16 ET (20:16 GMT)

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