What Is Virtual Reality?

Mind-bending immersion into a digital, three-dimensional simulation is just one $400 headset away.

Written by Brooke Becher
Published on Aug. 16, 2023
What Is Virtual Reality?
Image: Shutterstock / Built In

Virtual reality is a computer-generated simulation that allows users to interact and explore an immersive, three-dimensional environment. The technology’s most recognizable component — head-mounted displays — are built with motion-tracking technology and sensors that can read a user’s every move, then respond accordingly with virtual feedback. The idea is to trick the brain with virtual stimuli, creating the perception that a user is fully present in a non-physical world.  

Virtual Reality Definition

Virtual reality (VR) is a computer-generated, simulated experience that allows users to interact with an immersive, three-dimensional environment by way of pose tracking and near-eye displays.

With VR, people are looking for new ways to explore, educate and escape.

“You put on the headset and it feels like you are in a completely different location,” Bharani Rajakumar, founder and CEO of virtual reality training platform Transfr, told Built In. “It's designed to simulate as many senses as possible, such as vision, hearing, touch — even smell — to create a convincing experience.”

While VR tech remains a work in progress, experts say it’s expanding beyond gaming applications — and on the brink of mainstream adoption.


Take a look at how easy it is to get lost in virtual reality. | Video: Vox

How Does Virtual Reality Work?

When it comes to VR, the first step is convincing a user they are not where they think they are. That’s accomplished by doubling up the number of screens, then overriding their field of view with a head-mounted display. (The typical screen experience, like on a television or smartphone, is a passive, two-dimensional experience that our brains interpret as a flat image.)

A typical virtual reality headset has two screens built within a pair of high-tech goggles, each projecting a slightly different, mirrored version of the same scene. This mimics our eyes’ natural stereoscopic abilities that help us perceive depth. 

The VR headset combines near-eye display and pose tracking, which enables users to control in-virtual-reality actions with their own real-world movements. Gyroscopic sensors, accelerators and magnetometers help detect orientation and position while the screens play back the scene accordingly. This allows users to not only look around but move around with up to six degrees of freedom (6DOF) in simulated spaces.

For further immersion, headsets include built-in headphones or external audio connectors that output spatial audio in sync with the scene.

Headsets are typically accompanied with other input devices, or motion controllers, for full-body tracking. These come in the form of mice, joysticks, tracking balls, suits and data gloves, depending on the sophistication of a system. Accessories can include omnidirectional treadmills and smelling devices.

The actual believability of a virtual reality system can depend on how well these components are executed in its software. Expansive fields of view, quick frame rates, high-resolution graphics and how well they can pull off object interaction can be crucial to creating a truly immersive experience.

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Types of Virtual Reality

Not all virtual reality systems are created equal. Here are three types of virtual reality that simulate environments to different degrees:


In a non-immersive virtual reality, users can control characters or activities in a 3D world using a computer screen with keyboards, joysticks or controllers, but the environment itself is not directly interacting with the user. Non-immersive experiences, like video games, allow a user to exist within a digital space without displacing them from their physical surroundings.



Semi-immersive virtual reality systems place a user in a 3D environment without incorporating any physical movement. Heavily focusing on the visual element, this type of simulation uses a computer screen and, in some cases, a headset to blend both non-immersive and fully immersive elements. Flight simulators that train airline and military pilots as well as virtual tours used by architects and real estate agents are some real-world use cases of this tech.


Fully Immersive

Fully immersive virtual reality systems place users in a computer-generated environment that is perceived as real. Equipped with powerful computers, head-mounted displays and indicators fitted with sensors, users can interact with the environment as it occurs around them. This type of virtual reality incorporates as many senses as possible, and therefore, requires the most thorough process of data collection in comparison to other systems.

“Top tier virtual reality experiences incorporate haptics,” said Douglas Sonders, the co-founder of eXpanded eXistence, a startup developing an AI-based surgical management flow tool. “This is when a user wears technology that allows something in the virtual world to ‘touch’ them.”

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VR vs. AR

While virtual reality is designed to transport a user somewhere else entirely, augmented reality (AR) overlays digital elements — like images, animations and sounds — on top of a physical environment, creating an interactive, two-dimensional experience. Both are part of a developing technology segment known as extended reality.

Augmented reality can be accessed via camera and GPS-equipped devices like smartphones, tablets and smart glasses. Photograph filters on Snapchat and Instagram are common applications of augmented reality. The technology became part of mainstream vernacular with the worldwide phenomenon that was Pokémon Go, a mobile game that had on-the-go players catch digital pocket monsters on their smartphone as they traveled from location to location.

“​​So with virtual reality, you feel like you are physically transported to a new space or location,” Rajakumar explained, “whereas with augmented reality you are still in the physical world sitting on your couch, but a digital object appears on your coffee table.”

The combination of both virtual reality and augmented reality result in a third technology known as mixed reality, where digital elements are superimposed over a simulated rendering of a real-world environment.

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Uses of Virtual Reality

Virtual reality isn’t solely reserved for goggled gamers bumping into furniture as they sword-wield their way to save the princess. While gaming is at the frontier of virtual reality development, it turns out that there are a number of valuable use cases for total digital immersion.

“At first glance, virtual reality may seem like a fun toy, but it actually can be incredibly powerful for users,” Sonders said. “It has the ability to actually train the brain new skills by tricking the body into feeling like it is in the virtual environment.”

For example, professional race car drivers use VR headsets and racing rigs to train their muscle memories on real tracks ahead of a race — without the fear of crashing. The same goes for flight training.


Student engagement is in constant study across all levels of academia as teaching methods evolve in a digital age. One study found that immersing students in a virtual environment can form deeper cognitive associations with educational content, enhancing learning, recall and retention in students. Virtual reality may also aid in accomplishing classroom tasks and alleviate dropout rates.

“Imagine showing [students] a film about biology or space and letting them see and experience things in an immersive way that touches their imagination instead of just getting them to repeat stuff from a book,” said Vasily Petrenko, CEO and co-founder at virtual reality park company Another World. Virtual field trips could take entire classrooms to space or the tip of Mt. Everest, he added.



Virtual reality’s ability to set users in a simulated environment and lifelike scenarios without any real risk is ideal for training purposes across sectors. Active learning enables people to learn faster, retain more information for longer and fail less often. This means that emergency protocols, disaster preparedness, hazardous material spills and heights training can be safely taught with unlimited, risk-free attempts at a fraction of the cost.

And, in less extreme cases, companies are also using virtual reality to foster soft skills, such as inclusivity and empathy, in their company cultures. Those trained by virtual reality completed the course four times faster than their classroom counterparts at a confidence rate that was 40 percent higher, according to research conducted by PwC.


Architecture, Engineering, Construction

Applied to these fields, virtual reality offers designers to experience spaces before they’ve even broken ground. This tech can be used as a tool to create one-to-one replicas to better communicate ideas and nail down exact details from scale and lighting to detail components and materiality.



In medicine, virtual reality is already being used by surgeons to access 3D anatomical images for preoperative preparation and relay medical references and information mid-procedure, without infecting an operating room’s sterile field. Computer modeling and simulation guides the hands of next generation medical professionals by delivering low-risk testing environments as well as expanding the reach of hospital staff through complex telemedicine services.

Emma Ridderstad, co-founder of immersive learning platform Warpin, detailed how her company’s tech has assisted in patient care at children’s hospitals in Sweden.

“We created meditation simulations that take users to the serene Swedish countryside and beautiful coastlines to relax, decompress and admire the natural surroundings,” Ridderstad said, noting how the donated headsets have helped patients heal while affording parents a short break from lengthy hospital stays.



Researchers have been experimenting with virtual reality tech for therapeutic applications. To date, virtual reality has been used in tandem with other methods to treat psychiatric disorders from anxiety and PTSD to addiction and schizophrenia. Health tech startups have also explored pain management for patients with acute and chronic conditions.



Virtual reality systems have also been implemented to help show off real estate properties, walk potential guests through hotels and resorts before booking and make travel more accessible. Globally, the market was valued at $385 billion in 2022 and is expected to grow to $847 billion by 2028, according to Market Data Forecast.


Remote Collaboration

Remote work is here to stay. Still, that doesn’t mean all the shortcomings — especially as it relates to team bonding and collaboration — have been answered. Virtual reality may provide a way for coworkers to step into Zoom meetings, give presentations, conduct negotiations, share projects, collaborate and stream events in real time.

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Virtual Reality Examples

Meta Quest 2

A rebrand of the original ‘Oculus’ product series, the Meta Quest 2 is an all-in-one, standalone virtual reality headset, meaning that it does not require a console or personal computer to operate. Aside from being cordless and tangle-free, this device features sharp resolution displays and powerful processing speeds. It has also added outward-facing cameras that provide accurate 6DOF motion tracking and motion controls.


PlayStation VR2

The PlayStation VR2 is a tethered virtual reality system known for its stunning graphics and advanced tracking technology. Projecting high-resolution visuals on 4K HDR displays, the system brings a fully immersive experience to the consumer market by combining subtle headset vibrations, surround sound and sophisticated eye tracking with finger touch detection, haptic feedback and adaptive triggers from handheld input devices.


Valve Index VR Kit

Designed with PC gamers in mind, the Valve Index VR Kit is a tethered system that has wowed consumers with its finger-tracking controllers. These dual-knuckle controllers provide “a more natural, immersive feel” with a grip-molded handle that rests over the top of a user’s hand, a front trigger, circular control surface and a wrist strap.

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Future of Virtual Reality

Virtual reality is still in its infancy; however, the fact that these systems have already made it on the shelves of the commercial market shows promise for the next stage of their development. As demand increases, so does competition.


The Possibilities

Future trends indicate that virtual reality systems will become more affordable and more accessible. All classes of extended reality — virtual, augmented and mixed — will continue to develop side-by-side across various applications.

Head-mounted displays and other essentials will become more sleek and compact, eventually resembling a pair of everyday sunglasses or come in the form of high-tech contacts, Sonders said.

Multi-sensory experiences will become standard, thanks to advances in haptic feedback and wearable odor generators, and AI-enhanced, personalized interactions are to be expected. 

“In the future, it might be possible to have someone touch and feel something in virtual reality,” Petrenko said. “We’ve already seen some stuff with vibration jackets that will stimulate someone in a game, like a zombie shooter, where you will feel a scratch on your body.”


The Challenges

This advancement, however, is slow moving. Immersive devices are expensive, bulky and complex to set up and operate. And while there are technical hurdles, such as stalled latency rates and demanding bandwidth, consumer perception remains low. Only 25 percent of adults living in the United States own or have interacted with a virtual reality system, with 64 percent of the 72,000 respondents expressing no interest in owning a headset, ARtillery Intelligence reported.

“One of the main problems at the moment is that this technology isn’t available everywhere, but all that’s about to change,” Ridderstad said, noting Apple’s June 2023 announcement that the tech giant is entering the industry with its debut device, Vision Pro

Once businesses begin to invest in virtual reality, truly showcasing the added value that this technology can provide, that’s when these systems will start to break through to the mainstream. The sooner virtual reality is adopted as a method for communicating, educating and training rather than a novelty, she said, the sooner this technology will be adopted en masse for practical purposes.

One of those, amid the rise of AI and robotics, may be imparting human intelligence, like empathy and creativity, into machine learning algorithms and deep learning architectures that are likely to shape multiple modes of future tech.

Moving too fast could prove consequential.

“This technology, if used correctly, has the potential to change our society in the same way that the internet did, but if we don’t fix the problems that the internet brought with it, then these will follow us into the world of virtual reality,” Ridderstad said. “Rather than looking at immersive technology as a separate industry entirely, we must look at it as the evolution of the existing internet. Instead of being online on a two-dimensional screen, you are going to be on the inside and experiencing it from wherever you are.”


Frequently Asked Questions

Harvard computer scientist professor Ivan Sutherland and his student Bob Sproull created the first virtual reality system, named the Sword of Damocles, in 1968. It featured a head-mounted display, which suspended from the ceiling, and three-dimensional tracking capabilities. 

While a user’s eyes tell their brain that the body is in motion, their inner ear transmits that the body is actually static in a room. These conflicting signals can develop feelings of nausea that are linked to visual-induced motion sickness, coined cybersickness. 

Currently, there is no research that supports long-term damage to eyes when using virtual reality; however, the tech has been linked to eye strain and discomfort due to temporary muscle fatigue. Too much screen time in general is linked to myopia, an eye condition that results in blurry distance vision.

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