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Augmented Reality (AR) vs. Virtual Reality (VR) – Differences and Similarities

Woody Allen once quipped: “I hate reality but it’s still the best place to get a good steak.” Perhaps that’s true, but with the current investment in both virtual and augmented reality, one might wonder how soon technology will prove Allen wrong. A close examination of the augmented reality vs. virtual reality debate shows it might come sooner than you think.

Virtual Reality, or VR as it’s known, though often thought relegated to gaming, remains a viable means of delivering interactive experiences both in and outside the gaming industry. Augmented Reality, or AR, on the other hand, is quickly proving itself a disruptive technology on more than one front.

Without even considering the military applications for VR and AR, the consumer market is still willing to give VR a chance to see what it can do. As for AR, the field is wide open for innovations in a growing list of industries. And if the visionaries are right, you ain’t seen nothing yet.

What is the Difference Between AR and VR?

The VR/AR story is shaping up to be more about exploiting each technology to it’s fullest potential, rather than deciding which is better. Virtual Reality will never overtake Augmented Reality in providing practical real-world applications, and Augmented Reality is unlikely to dominate the gaming and entertainment space — at least as they are currently defined.

Both VR and AR utilize high definition displays, but the similarities end there. VR completely immerses the user in an artificial environment, while AR introduces artificial elements into the user’s real environment. These distinctions make VR the clear choice for 3D games and 3D video, and AR more suited for real-world applications where a contextual overlay of information is presented in real time as the user continues to interact with the real world.

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By the time the bells ring out signaling the start of a new year, the total number of VR users will exceed 43 million. This is a market on the move, projected to be worth $30bn by 2020.

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Although most VR viewers are headsets and most AR viewers are wearable glasses or visors, the lines are blurring as developers push the boundaries of the technology. A clear understanding of the power and limitations of current VR and AR technologies is helpful as we explore the market potential for each.

Major Virtual Reality Players

If you expect VR to advance to the point where it can go toe to toe with AR in practical applications, you will be disappointed. Neither can advancement in racecar technology allow a racecar to cross the Atlantic Ocean, but you would not expect it to. However, in terms of what VR is designed to do — entertain and train — it does so with increasing speed, resolution, and accessibility. A brief overview of the consumer VR landscape indicates that VR may be experiencing, not death throes, but birth pains.

Have a VR/AR Project in Mind? We Are Here to Discuss


Oculus Rift

Began as a Kickstarter project, Oculus was acquired by Facebook for $2 billion. Within the consumer market, Oculus is as about good as it gets. With a plethora of sensors, an impressive 1080×1200 dpi OLED display for each eye, a camera, and integrated stereo headphones, it outshines most of its rivals. A PC with a high-end graphics card is required to drive the powerful capabilities of the Oculus Rift, but with 30 games becoming available for the Rift in March, the PC will get plenty of use.

Palmer Luckey, creator of the Rift, is keeping pre-order numbers close, but he stated that within ten minutes his team met the sales objectives they had projected for several hours of sales.

HTC Vive

Winner of over 22 awards at CES 2016, including Best Gaming Product, the HTC Vive is a strap-on headset that turns any room into a 3D virtual wonderland. Two hand-held wands and two Lighthouse base stations complete the package.

The HTC Vive is actually a joint venture between HTC and Valve Corporation.

The HTC Vive includes more than 70 sensors, including a microelectromechanical systems (MEMS) gyroscope, accelerometer, and laser position sensors. HTC claims the system will operate in a room up to 4.6×4.6 meters when used with a SteamVR base station, and can track the user’s movement down to the millimeter. Twin displays provide a combined 2160 x 1200 resolution and a front-facing camera detects obstacles so the user does not bump into anything real while enjoying his or her virtual environment.

Like the Oculus Rift, this VR headset takes the VR experience to the next level. Its $800 price tag also takes cost the next level for consumer VR gear.

Google Cardboard

Not exactly cutting edge technology, the Google Cardboard is, well, made of cardboard and uses a smartphone as the display. It will, however, as stated on Google’s website, allow you to “experience virtual reality in a simple, fun, and affordable way.” Various versions of the viewer are available to accommodate most smart phones.

Google has partnered with several companies who provide “certified” Google Cardboard viewer. Google’s website also provides all the information needed to allow anyone to build their own Cardboard. Apps are available for Android and iOS.

The low price point and typical Google hype attracted a lot of attention. During the platform’s first 19 months, more than 5 million Cardboard viewers had been shipped, and more than 1,000 applications had been published, with 25 million downloads. While obviously not intended as a huge profit item for Google, Cardboard did allow Google to test the VR waters before taking the plunge — perhaps a lesson learned from the Google Glass launch and burn. Yes, one might successfully argue that Google’s step back from the high tech Glass to the low-tech Cardboard is progress, indeed.

Regardless, if the objective of Cardboard was to test market interest in low-cost, accessible VR, it was an unparalleled success. Subsequently, Google appointed Clay Bavor as its new VP for VR. It also announced that it will develop a plastic version of the viewer, which will include some electronics while still utilizing a cell phone.

With Google’s penchant for getting its technology the old-fashioned way — buying it, it is likely that somewhere a small VR startup with great ideas is already in Google’s crosshairs.

Additional VR Players

Google and Facebook, technological bellwethers that they are, have no doubt helped spur interest in the VR marketplace. Also creating brave new virtual worlds is Samsung, with Samsung Gear, Sulon Q, and fine optics maker Zeiss, with the Zeiss VR One. Whether or not there will be winners and losers in the VR arena, one thing is sure: Virtual Reality is alive and kicking up a storm.

Major Augmented Reality Players

VR may be making a comeback, but AR never left the game. Two major players dominate the consumer AR landscape: one a techno-giant, the other a tech startup. But in the relatively new world of AR, the playing field is not only wide, it’s pretty level, too. At the end of the day, who will claim the biggest market share is anyone’s guess.

Microsoft HoloLens

The Microsoft HoloLens uses high-definition 3D holograms to create the virtual experience. More than just another AR headset, HoloLens is a fully functioning Windows 10 computer. Constructed in a visor form with a headband, the HoloLens includes a high-definition 3D stereoscopic display, and spatial sound technology that provides virtual 3D sound as well as holograms.

Without the need for hand controls, the wearer interacts with the HoloLens through gaze, voice, and hand gestures.

Development editions are set to ship March 30th, for a hefty $3,000 each. Moreover, they are offered for developers only, as Microsoft strives to build a diverse community of developers to help “build the future of holographic computing.”

Magic Leap

Of all AR startups, Magic Leap has generated the most headlines, and the most cash.

With backing from no less than Google, Legendary Entertainment, Warner Brothers, Fidelity, and J.P, Morgan, Magic Leap is well lubricated with the capital it needs to advance to the forefront of AR technology. Having raised more than $827M in funding, Magic Leap’s post-money validation, according to Forbes, could top $3.7 billion.

That’s all very exciting, but what, exactly, is Magic Leap?

Few know for sure, and they aren’t talking. The product is being developed in stealth mode. This much we know from the carefully controlled information the company has released, and from the handful of people who have been invited to demos: Magic Leap is capable of doing things other VR/AR companies can only dream of.

Rather than employing a viewer, a visor, or a headset to hold the display, Magic Leap projects 3D images directly into the user’s eyes, giving the effect that the generated images are a natural part of the physical environment. In fact, the company claims that with their unique mixed-reality experience, projected images will be indistinguishable from reality. That’s rich.

VR vs. AR – Which Technology Will Succeed?

One can only surmise that strap-on displays, some made of cardboard, represent a technology in its infancy. Better, more-practical hardware must surely be on the way. It must, if VR and AR are to become more than a novelty. Certainly, new applications that have yet to be thought of lie just over the horizon, along with yet unfathomed technology to power them. Based on even current military and medical uses for VR and AR, one would not be grasping to expect that brainwave-driven full color interactive 3D holographic experiences are soon coming to a store near you.

In the meantime, there is money to be made.

According to a Digi-Capital report, the forecast for AR/VR could exceed $120B in revenue by 2020. Of that, AR is expected to take the biggest piece of the pie at around $120B in revenue, with VR pulling in $30B. Breaking the numbers down further, the report projects earnings in the AR space to fall as follows, from greatest earnings to least:

  1. AR hardware
  2. aCommerce
  3. AR data
  4. AR voice
  5. AR film and TV
  6. Enterprise AR
  7. AR Adspend
  8. AR consumer
  9. AR games
  10. AR theme parks

VR’s $30B is expected to be yielded as follows:

  1. VR games
  2. VR hardware
  3. VR films
  4. VR theme parks
  5. VR niche markets

With so many industries standing to benefit from either VR or AR or both, the ground is ripe for startups to do their thing, and for the investors that fund them. According to UploadVR, more than $765M has been invested in VR and AR during the last 5 years.

TechCrunch has another take, suggesting that investment in VR and AR in 2016 will target three core growth areas: hardware, content, and software/infrastructure/tools. Furthermore, TechCrunch suggests that there just might be more investment opportunities in the VR/AR space than investors at this point. If that is so, then there may never be a better time to invest in VR/AR than now.

AppReal – Your VR/AR Experts

AppReal is a virtual reality company specializing in VR and augmented reality development solutions. Whether you need programming assistance with your own VR/AR project, custom development, or complete VR and AR production, we have the technology to make your vision a reality.

Augmented reality and virtual reality represent exciting investment opportunities. Contact us today to learn how we can help you.


  • Virtual Reality

  • Posted by Yariv Levski

  • Virtual Reality

  • Posted by Yariv Levski

  • Virtual Reality

  • Posted by Yariv Levski

2 responses to “Augmented Reality (AR) vs. Virtual Reality (VR) – Differences and Similarities”

  1. Priyanka Patel says:

    This is a great way to explain the difference between AR and VR. Most top tech companies are also working on something called Mixed Reality. I came across some MR solutions on http://wowso.me/ Need more understanding about this new technology which is supposed to be a mix of AR and VR.

  2. Caroline Lewis says:

    VR is usually delivered to the user via head-mounted or controller, that connects people to the virtual reality and allows them to actually navigate and control these actions in an environment that is meant to simulate the real world.
    AR is used more and more in mobile devices like smartphones, laptops or tablets to change digital images and the real world with graphic intersect and interact.
    Both Virtual and Augmented realities have great potential and as new technologies will be implemented very soon.

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