Augmented reality is Microsoft's future. See where it started
Back in January, Microsoft released video of a new product they are developing called HoloLens. HoloLens promises to change not only the way that people interact with computers but also how they interact with the space in their house.
(You don't have to watch the whole video, even the first minute or so will do)
At first glance, the visor setup appears to be similar to virtual reality units like Oculos Rift but they are quite different products. Oculous Rift is a virtual reality headset. It covers your eyes and ears and presents the user with a new virtual space.
HoloLens is augmented reality- a blending of the real world you see and virtual objects generated by a computer. Unlike holograms which are projections visible to anyone in a room, the augmented reality presented by HoloLens is only visible to the user when they wear the visor. It does not obstruct their vision so they can see the real space around them in addition to virtual objects which augment the reality of the space.
It may not be entirely clear what is going on in the above video so I've found an old video demonstrating the core features of augmented reality.
This video, recorded back in about 2004 by people working at various universities shows the basic functions and capabilities of augmented reality.
Here much of what appears as pure magic in Microsoft's demo is made a little more clear. Unlike in HoloLens, which can render objects in space based on understanding the physical layout of the room, this demonstration can only create objects when the computer camera "sees" the printed symbols- you may notice that some objects blink out when the symbol is no longer visible to the camera.
All of the core features of HoloLens are present. Objects can not only be directly interacted with but different other virtual items can be used to interact in new and interesting ways. For example, at about 1:15, you see the user flicking a card that can alter the size and other characteristics of the virtual teapot.
It's kind of like the silent film version of AR to HoloLens's Technicolor marvel.
With more advanced AR, one can see customized content or information in their normal field of vision. Imagine street signs in a foreign country automatically changing to a language you're familiar with through the augmented windshield of your rental car?