When attempting to initiate video in a Lync call you receive the following error message:
“We couldn’t start your video. Your camera isn’t setup, or you’re already using it. You can set it up in Options–Look for Video Device Settings.”
Additionally, if you check Video Device options within Lync the video feed appears as expected.
I discovered this issue was caused by the fact that my webcam (Microsoft LifeCam VX-3000) does not have a compatible Windows 8 driver and it does not seem they’ll be releasing one for this old model. The fix was to pick up a new webcam that’s Windows 8 compatible.