The military wants Microsoft to “cut” the price of its $80,000 HoloLens goggles.

In summary: The HoloLens-based glasses that Microsoft is selling to the US military have had a long and complicated history. Although the hardware and software problems of the first models seem to have been addressed in the latest version, the problem is now the cost: the military branch wants the headphones to be “much less” than the current price of $80,000 per unit.

Back in 2018, Microsoft began manufacturing glasses for Integrated Visual Augmentation Systems (IVAS) and was awarded a $480 million contract with the Army for 100,000 units.

The first contract was extended in March 2021, ensuring that Microsoft will provide finished products, parts, and support in a deal that could be worth $21.9 billion over ten years. The Army has ordered an initial 5,000 units, valued at $373 million, and about 121,000 will be delivered by contract.

The process was not smooth from the start. The release of the glasses was pushed back in 2021 to 2022, but the Army said it was fully committed to the deal.

In April 2022, the DOD warned that the massive purchase could be a waste of taxpayer money. There was some really bad news about Microsoft that year when a military tester said the headphones were dangerous to soldiers because of the light they produced when they were working, which could alert enemies to their location.

There were also other complaints about the headsets, such as preventing the soldier from looking, including their peripheral vision, when wearing them. Worryingly, soldiers hated it because it caused headaches, eye strain and nausea, symptoms that 80% of testers said appeared within three hours of use. The failure of these devices also plays a vital role.

Congress rejected a military request to spend $400 million to buy 6,900 IVAS headsets last year. Instead, it agreed to $40 million for Microsoft to develop a new and improved version.

The Army has been testing a reduced version of the IVAS head and found that many of the previous versions were corrected.

The old version of IVAS was bigger

At the annual meeting of the Association of the US Army (via Bloomberg) the head of military procurement Doug Bush said the cost of IVAS glasses will be a key factor next year when senior leaders make decisions about the overall production. The military said the cost goal “should be less than $80,000.”

“We still have to find something affordable,” Bush said.

Bloomberg reports that IVAS’s show-ups, battery and chest make it $41,824 at current prices. The rest includes a wide range of costs, from military program management to Microsoft’s engineering and software support costs.

Microsoft is trying to help the military achieve its goal of affordable headphones. “We’re going through the program to see where we can cut costs,” Robin Seiler, Microsoft’s vice president of Mixed Reality, told reporters.

“It’s a very complex system, so when you look at cost reduction you have to look at it from a team level, from a staffing level and from your operations,” Seiler added.

IVAS units combine advanced night vision, thermal, and soldier-mounted sensors into a head-mounted display. With the help of Microsoft Azure cloud services, it also supports virtual reality and machine learning to create a live blended learning environment.

Earlier this month, Microsoft ended production of its HoloLens 2 headset with no plans for a replacement. The company confirmed at the time that it remained “fully committed” to IVAS.