E3 has come and gone, with (most of) the significant publishers putting their hat into the ring. While Sony was absent from the show floor, UploadVR gave a stellar presentation of the latest and greatest software coming to VR platforms.

Of all the attendees who came to E3, none asked about Microsoft’s plans for VR on their Xbox. The company’s plans for VR are nonexistent, with no word on whether they are planning to create a consumer VR headset or not. But even if there is no word, there is plenty of evidence that they are capable of rolling out a new system after 2020.

Does Microsoft have any interest in VR?

Firstly, let’s explore the most obvious question: is Microsoft even interested in VR? While Sony is plugging along with the incredibly successful PSVR headset, Microsoft hasn’t given any indications that they plan to mimic their rival.

The reason for this may come down to prioritisation. Currently, Microsoft is focusing on producing a range of top-quality first-party titles for Project Scartlett; their upcoming games console debuting Holiday 2020. The company wants to build traditional video games for their console, rather than innovate with other forms of gaming, which makes sense from a business perspective.

In terms of consumer VR, Microsoft is looking away from the area, at least publically.

Microsoft is focusing on AR, not VR

Instead, it seems like they are focusing on AR for consumers. One of Microsoft’s most significant titles this year may not be on the Xbox, but on mobile phones with the launch of Minecraft World. Using the world-class IP, Microsoft built a new game where creators can adventure, create, and share constructions with their friends and family.

This has enormous potential to make money for the company. Mobile phones suffuse the market much more than consoles, and making the game free lowers the barriers of entry to almost zero. Emulating the success of pokemon Go, Microsoft has laid the groundwork for a potentially massive global phenomenon among kids and teenagers.

In terms of making money for the company, Microsoft has bet that AR is the way forward.

Enterprise uses of mixed reality: Hololens 2

But what about enterprise applications? Microsoft has made significant investments into providing companies with enterprise tools, with their mixed reality headset. While consumers are less likely to pick up a VR headset, several significant organisations are interested in using the technology. Microsoft secured a $480 million HoloLens contract from US Army recently.

That’s never been in doubt. With Google, HTC, and Microsoft pushing forward with enterprise applications, the company is likely to keep investing in the area. With significant contracts secured, it makes business sense for them to continue. But for consumers who like their VR headsets, that is less likely.

Will Project Scarlett have VR?

We do not know much about the technical capabilities of Project Scarlett, though it has the firepower to run the headset. With the limited details we see, we can estimate that it is a significant step up from the PS4 pro, a console which can already run VR. So in terms of equipment, Microsoft is ready.

But will the company make a headset? That’s to be decided. There are significant costs in R&D, developing games, and supporting the ecosystem as players enter it with significant price tags. If Microsoft steps in, it will be a huge cost. But if Sony has shown anything, having the platform for VR leads to a lot of success for the company.

This is all hypothetical, based on conjecture, though we shall see what happens from next year.