Microsoft acquired Osterhout Design Group (ODG) sometime in the past year. The deal was never publicized, but Microsoft paid about $150 million for the company. Everyone is trying to get in on the head-mounted computer game, with Facebook purchasing Oculus and Google getting ready for a potential consumer release of Glass this year. What is Microsoft's game with ODG, though?
ODG works on government projects and wearable devices for the military and other government agencies. The government/military market for augmented reality products is going to explode in the next few years. Microsoft seems to want a piece of that action. They may also be looking into consumer applications for ODG's technology. ODG has a large portfolio including 81 patents for wearable tech. The company is also working on other inventions that Microsoft could put to use. Microsoft decided it would be easier to buy its way into the market than it would be to develop its own wearable display technology.
Some of ODG's patents describe technology that sounds very similar to Google Glass. The products that they've created are similar to the Oculus VR, with a focus on augmented reality. The ODG glasses are designed to be much more than an add-on to your smartphone experience. One of their patents shows 3D glasses with augmented reality features, and if they are developing military applications, could be used on the battlefield or in training exercises. Google Glass adds an element of assistance to your day, but doesn't offer any type of 3D projection or augmenting what you see in a significant way.
Microsoft could be working on glasses to go with the Xbox One or future gaming platforms. This would make more sense than Microsoft working directly on military AR device applications. They may also be working directly on a device to compete with Google Glass. It could tie into their Windows mobile computing platform the way Glass ties into your Android experience. Microsoft is actively investing in and developing some kind of glasses, though. It'll be interesting to see what they come up with over the next 12-18 months.