US Army Requests Price Cut from Microsoft for High-Tech Goggles

Microsoft’s futuristic goggles, designed for the US Army, have hit a bump—one related to their hefty price tag. According to a report from Bloomberg, the Army has made it clear that for Microsoft to secure large orders in the future, the cost of the goggles will need to drop significantly below the current projected price of $80,000 per set.

The goggles, officially called the Integrated Visual Augmentation System (IVAS), are built on Microsoft’s HoloLens "mixed reality" technology. While the Army is impressed with what the goggles can do, the high price could become a major roadblock for larger orders down the line.

What Are Microsoft’s IVAS Goggles?

The IVAS goggles are a cutting-edge tool designed to help soldiers in the field. They come equipped with night vision, threat detection, and real-time data to give troops a tactical advantage. Using Microsoft’s HoloLens mixed reality tech, these goggles offer capabilities far beyond what soldiers have had access to before.

The Army has been quite pleased with the improvements in the latest version, especially compared to earlier models that left soldiers uncomfortable. But even though they love the performance, the $80,000 per unit cost is making it hard to justify ordering up to 121,000 sets over the next decade. The Army has openly admitted that unless the price comes down, they might not move forward with large-scale production. Affordability is a crucial factor.

Microsoft’s $21.9 Billion Opportunity

If all goes well with testing and the price is reduced, Microsoft could land a massive contract worth up to $21.9 billion over the next 10 years. This would cover not just the goggles but also spares and support services. However, the Army’s decision to fully commit to the project will depend on the final cost and the results of more combat tests, including a major one planned for next year. If the goggles pass these tests and the price issue is resolved, Microsoft could see orders for up to 121,000 units.

Army acquisition chief Doug Bush has shared encouraging news so far. Speaking at the annual Association of the US Army conference, he said, “Testing is going much better than it did the first time around. We’ve managed to fix a lot of the previous issues.” However, he also stressed that the goggles must become more affordable for the Army to commit to full production.

Microsoft Working on a Price Cut

To address the price concerns, Microsoft is actively looking for ways to lower costs across the board. Robin Seiler, Microsoft’s corporate vice president for Mixed Reality, explained that the company is reviewing every aspect of the production process, from components to labor to supply chain management.

“It’s a complex system,” Seiler said, “so when you think about cost reduction, you have to consider every detail—from the smallest part to the bigger processes involved.” She also pointed out that some of the current high costs are tied to the early production batches, and the company expects the price to come down over time.

The road ahead for Microsoft’s IVAS goggles will depend largely on how well they perform in the next round of combat tests and whether they can meet the Army’s affordability requirements. With billions of dollars on the line and the future of soldier technology at stake, both Microsoft and the Army are working hard to find a solution. There’s hope that, with some adjustments, these high-tech goggles could soon become an essential part of the US Army’s gear, but only if the price is right.