Microsoft's Integrated Visual Augmentation System (IVAS) goggles for the US Army are currently facing a significant cost challenge, with projections estimating the price at $80,000 per set, which is considered too high for large orders.

A potential contract worth $21.9 billion is at stake for Microsoft, but this hinges on the outcomes of ongoing combat tests and the final pricing of the goggles.

The US Army has indicated that the price of the goggles must be substantially reduced to justify future orders, which could amount to as many as 121,000 units over the next decade.

Army acquisition chief Doug Bush acknowledged that testing has improved significantly since earlier trials, yet he stressed the importance of affordability for the Army to commit to full production.

The IVAS goggles leverage Microsoft's HoloLens mixed reality technology, designed to enhance soldiers' capabilities with features such as night vision, threat detection, and real-time information.

While the Army has expressed satisfaction with the performance of the goggles compared to a previous version that caused discomfort, affordability remains a critical factor for moving forward with full-scale production.

In light of the cost concerns, Robin Seiler, Microsoft's corporate vice president for Mixed Reality, stated that the company is exploring various cost reduction strategies at multiple levels.

Microsoft is actively seeking ways to lower the unit cost of the goggles by reducing expenses across components, labor, and supply chain management.