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Magic Leap names former Microsoft executive as CEO

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Magic Leap has appointed Peggy Johnson, a former Microsoft executive, as its new CEO. Johnson will begin leading the company on August 1st, replacing current CEO and company co-founder Rony Abovitz. Her appointment is part of the struggling mixed reality company’s move toward business customers and away from consumer entertainment and personal computing.

Johnson was Microsoft’s executive vice president of business development as well as the head of its venture capital fund M12. She told The New York Times that she reached out to Abovitz about the job after he announced plans to step down in May. It’s not yet clear what role Abovitz will play after the transition, but he’s previously said he will provide “strategy and vision” through Magic Leap’s board of directors.

Johnson, who ran Qualcomm’s internet services division before joining Microsoft in 2014, told the Times that current-generation mixed reality is comparable to early cellphone or cloud computing tech. Mixed or augmented reality tech enjoyed a boom in the early and mid-’00s, but in the past few years, many AR companies have either shifted their focus or shut down entirely. Most recently, Bose abandoned plans for audio-based mixed reality glasses in June, and Google acquired consumer AR startup North, nixing plans for a second-generation pair of North’s Focals glasses. Magic Leap cut hundreds of employees earlier this year amid the coronavirus pandemic, although it tells the Times that it’s since secured a $375 million investment (previously reported as $350 million) to maintain operations.

Magic Leap still faces many challenges. The company is currently working on a second-generation headset, which follows a first-generation product that was impressive but limited. And although the pandemic provides new opportunities in areas like remote work, it’s dealt a huge blow to location-based entertainment operations like theme parks, once seen as a promising venue for mixed reality. Earlier this year, Magic Leap was also forced to indefinitely delay the launch of an ambitious narrative project called The Last Light following the cancellation of several 2020 film festivals.

Microsoft is one of the industry’s few major success stories, however; since 2015, it’s turned its HoloLens headset into a business-focused hardware product. Johnson’s work wasn’t focused on HoloLens, but having an existing enterprise division gave Microsoft a key advantage, and Johnson’s expertise in that field could help Magic Leap — even if the company’s future remains highly uncertain.

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