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Chris Capossela, Microsoft’s chief marketing officer, speaking in New Orleans this week.

For many people, the first thought upon experiencing Microsoft’s HoloLens is how they might use it in their homes, for holographic video games or Skype video calls in 3D.

MSHoloLens_GroupShot_wAcc_WhtBG_V2_RGB-e1456599816160But it turns out that business applications are largely driving the initial usage of the HoloLens, a “mixed reality” headset that can place holographic images on top of the real world in the environment around the user.

The company shipped the HoloLens Development Edition last week, at a price of $3,000 for each unit. Early users are primarily big companies and groups, including Lowe’s, Case Western Reserve UniversityNASA, SaabVolvo and others. Real estate company Skanska and digital production agency Studio 216 just announced plans for the “world’s first holographic real estate leasing center,” for a high-rise office project in downtown Seattle.

The level of business interest took Microsoft by surprise, said Chris Capossela, the company’s chief marketing officer, speaking with reporters at the Envision conference in New Orleans this week.

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Microsoft VP Kudo Tsunoda with the HoloLens Development Edition at Build last week.

“We totally underestimated the commercial interest in this thing,” Capossela said. “The team who built it, a lot of them had their roots in Xbox. Alex Kipman and Kudo [Tsunoda]. And so they originally envisioned it as something more along those lines, but as we started to show it to people, we were blown away by the commercial interest.”

That interest led the company to pivot, focusing first on businesses rather than consumers for this initial developer edition of the HoloLens.

Microsoft CEO Satya Nadella advised the team to follow the demand in that way. Nadella “was the one who said, ‘Hey I love this thing, but I think you’re going to find that the scenarios are more interesting on the commercial side early on,’ ” Capossela explained.

This doesn’t mean Microsoft is giving up on the consumer or gaming businesses, he added. But at $3,000, with a limited array of consumer applications, HoloLens isn’t yet ready for store shelves.

“It’s a journey we’re going to go on, where over time the hardware will get better, things will get cheaper,” Capossela said. “But for it to be something really broadly available, where you can go to Best Buy and buy it for a Christmas gift, we’re not there, and instead I think the real V1 scenarios are about these business scenarios that people are really excited about.”

In the meantime, competing virtual reality headsets including Oculus Rift and HTC Vive are headed for consumers, or already there, beating HoloLens to the punch and making headway in that market.

But Capossela is able to see a silver lining. “We’re very excited that all the VR work is happening on Windows,” he said. “We love that. We love that Oculus requires a big gaming rig. Those are very positive things for the Windows ecosystem, and we want Windows to be the place that VR happens.”

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