• Microsoft's Industrial Metaverse Core team started in October 2022
  • The team, internally known as Project Bonsai, is shutting down after four months
  • Microsoft's social VR platform AltspaceVR is also being shut down

Tech giant Microsoft has shut down its Industrial Metaverse Core team, a four-month-old initiative formed to help customers use the metaverse in industrial settings.

Known internally as Project Bonsai, Microsoft's Industrial Metaverse Core team, which started in October 2022, is officially discontinued, The Information reported, citing "a person with direct knowledge of the matter" as the source of information.

The team was working on how to use artificial intelligence and digital technologies to allow interaction among users using optimized assets, places, physical goods equipment and processes.

Microsoft also reportedly laid off around 100 employees working on the project as part of the company-wide plan to let go 10,000 employees, CEO Satya Nadella shared earlier this month.

The tech giant's recent move was supposedly due to a shift in its priorities. Microsoft now wants to focus on shorter-term projects over those that require a longer time to generate revenues.

Microsoft's Industrial Metaverse Core team already secured several major customers in the industrial metaverse space, including Coca-Cola and Mercedes Benz. Despite that, the project was shut down. However, Microsoft said it stays committed and assured customers that there will be no change in how the company supports them.

"Microsoft remains committed to the industrial metaverse. We are applying our focus to the areas of the industrial metaverse that matter most to our customers and they will see no change in how they are supported. We look forward to sharing additional information in the future," the tech giant's spokesperson said.

Prior to news about the discontinuation of Microsoft's Industrial Metaverse Core team, social virtual reality platform AltspaceVR, the business the Redmond-based tech giant acquired, announced that it will shut down on March 10.

"As we look to the future, we see the opportunity for VR expanding beyond consumer into business and now have an even greater goal: a more open, accessible, and secure version of immersive experiences in the metaverse," the AltspaceVR announcement read.

"To achieve that we have made the difficult decision to sunset the AltspaceVR platform on March 10, 2023, and shift our focus to support immersive experiences powered by Microsoft Mesh," the announcement added.

Big names in various industries have dipped their toes in the metaverse, a sector valued at $100.27 billion in 2022 and is projected to grow exponentially to $1,527.55 billion by 2029.

The metaverse is an immersive, online 3D space where users interact with each other and with computer-generated avatars and objects with the help of Augmented Reality (AR) and Virtual Reality (VR) devices.

While the industry is still in its infancy, giants Amazon, Alphabet and Meta (formerly Facebook), NVIDIA, and Apple, among many others, have invested heavily in building their own metaverse platforms.

A Microsoft logo is seen in Issy-les-Moulineaux near Paris