Is Magic Leap dead? Report claims company used fake tech demos and is 'years' behind schedule

Magic Leap's coveted mixed reality technology has been the subject of intense speculation since it broke ground in 2014. Having secured billions of dollars in funding from some of the world's biggest tech giants, the secretive start-up has managed to stay at the centre of the VR/AR conversation despite showing little of the so-called revolutionary technology it has in the works.

Now, the Magic Leap hype bubble may be about to burst in spectacularly disappointing fashion. According to reports, the Florida-based start-up is years behind on its plans and may have used deceptive product demos in order to keep interest in its tech alive.

The Verge, which quotes an exclusive article from The Information, reports that Magic Leap's mixed reality technology has long since been overtaken by other products already on the market such as Microsoft's HoloLens, which Magic Leap's technology is said to most closely resemble.

Allegedly, Magic Leap has struggled to scale-down a bulky piece of laser projection equipment used within the headset's display. "The crux of the problem appears to be Magic Leap's gamble on a so-called fibre scanning display, which shines a laser through a fibre optic cable that moves rapidly back and forth to draw images out of light," reports the Verge.

"The company thought the fibre scanning display could be Magic Leap's breakthrough tech, allowing it to shrink down the extremely expensive hardware used on a previous prototype – a refrigerator-sized device known internally as the 'Beast'.

Magic Leap CEO Rony Abovitz previously suggested its tech might eventually fit into a conventional pair of spectacles, but by the sounds of it, the company has struggled to shrink its headset down to something you could comfortably wear for more than a few minutes. This could go some way the explain why there are so many prototypes of Magic Leap's fabled headset, and why the company has been keen to play down hype surrounding the few iterations spotted in patent filings.

Despite this, Magic Leap has been able to maintain the interest of companies including Google, Alibaba and Warner Bros with impressive tech demos showing off the abilities of its mixed reality technology. However, The Information reports that "much of that technology won't be in the product now planned for commercial release", with at least one of the so-called product demos actually created by visual effects artists.

The report specifically refers to a YouTube video called "Just another day at the office", which shows a Magic Leap wearer battling augmented reality aliens. The jaw-dropping demo shows, according to the Magic Leap, "a game we're playing around the office right now". In fact, the video was reportedly created by Weta Workshop, a visual effects studio based in New Zealand.

Magic Leap is famously covert about what goes on behind its doors and few have had the opportunity to see its headset in the flesh, making it hard to corroborate the claims made by The Information. If true however, the news is sure to upset investors who have dropped some $1.4bn (£1bn, €1.3bn) on the company, not to mention the fact it will come as a huge kick in the teeth to anyone hoping to snap up a Magic Leap headset any time in the near future.

IBTimes UK has contacted Magic Leap for comment and will update this story if and when it receives a response.