Microsoft Wins Government Contract to Develop Augmented Reality Headsets

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On Wednesday, the US Army announced that Microsoft had won a contract to build augmented reality headsets.

The contract is for more than 120,000 custom HoloLens augmented reality headsets and has the potential to be worth around $21.88 billion over 10 years.

Microsoft shares posted gains following the news and continued that run on Thursday. Winning this contract proved to investors that Microsoft's research and development is starting to generate revenues beyond its typical streams.

This is not the only government contract Microsoft has received in recent years. In 2018, the company was awarded a $480 million contract to provide the army with prototypes of the Integrated Virtual Augmented System.

The new contract is for its standard-issue HoloLens goggles. These typically cost $3,500 and allow individuals to see holograms over their actual environment. This would allow aim to be shown for a weapon.

“The IVAS headset, based on HoloLens and augmented by Microsoft Azure cloud services, delivers a platform that will keep soldiers safer and make them more effective,” Alex Kipman, a technical fellow at Microsoft and the person who introduced the HoloLens in 2015, said. “The program delivers enhanced situational awareness, enabling information sharing and decision-making in a variety of scenarios.”

The Army stated that the goggles will allow its soldiers to fight, rehearse and train in one system.

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