Augmented reality (AR) vs. virtual reality (VR): A comprehensive comparison

What is augmented reality (AR), and how does it work?

Augmented reality (AR) is a technology that combines real, physical elements with the digital world. It “augments” (or enhances) your actual surroundings with digital components, like images, videos, or sounds. These digital elements create interactive and engaging experiences, often through mobile phones or tablets.

AR uses computer vision, depth tracking, and spatial mapping to show users content in the physical world. A well-known example of AR is the popular Pokémon Go mobile app game, where players can locate and capture virtual characters in the real world.

Augmented reality shouldn’t be confused with augmented intelligence, even though these terms sound similar. Augmented intelligence uses machine learning (ML) and deep learning to enhance human intelligence — so it isn’t as closely related to augmented reality as it may sound.

AR can be applied in numerous ways — not just in gaming and entertainment. Let’s take a look at the augmented reality applications below.

Augmented reality applications

Augmented reality can be used in several ways across various industries. Here’s how different sectors make use of augmented reality to streamline processes and enhance user experiences.

• Healthcare. Augmented reality is revolutionizing patient treatments and care in many ways. For example, AR has been combined with robot-assisted surgery (RAS) to allow surgeons to perform advanced, complex operations more accurately. In addition to that, AR has been widely used to educate patients about their treatments and upcoming procedures to ease their anxiety.
• Entertainment. The entertainment industry is one of the main sectors associated with AR. Companies use augmented reality in gaming, television, live events, theme parks, and interactive art installations. AR helps create immersive and interactive experiences for users, allowing them to actively participate in something instead of passively watching.
• Education. Augmented reality supports the education sector in several ways, from making learning more engaging to letting students interact with resources in new, innovative ways (e.g., through smart glasses).
• Marketing. Marketers use AR technology to drive sales and boost customer engagement. For example, they may use AR apps to create fun, interactive advertising campaigns (such as camera filters people can try from their own devices).
• Real estate. AR technology allows potential buyers to view and experience properties in new, innovative ways. For example, potential buyers or renters can go on virtual property tours using smartphones. AR can also help visualize where furniture and appliances could go, making homeware shopping more efficient and cost-effective.
• Automotive. AR technology also supports the design process in the automotive industry. By applying AR technology, designers can efficiently create and change virtual vehicle models. They can quickly make adjustments, saving companies time and money. Automotive companies can also purchase virtual prototypes of cars before investing money in the real thing.
• Manufacturing. AR is also an integral part of various manufacturing processes, from training to inventory management. By overlaying virtual objects onto physical ones, AR makes processes more efficient, safe, and productive. For example, quality control specialists may use AR to check products during manufacturing and quickly spot any issues or defects.
• Aerospace. AR technology plays a vital role in advancing the aerospace industry, from prototyping new equipment to minimizing human error. Additionally, augmented reality systems help make aircraft maintenance more efficient. For example, on-field technicians can use AR to get support from remote experts from anywhere.

Augmented reality examples

Let’s look at several recent examples of companies using augmented reality in creative ways.

• Meller’s AR Instagram filter. The team at Meller, a sunglasses retailer, has created an AR Instagram filter allowing people to virtually “try on” various sunglasses using their phone’s camera. The filter allows them to choose a model and see how it’d look on them without going in and trying them in-store. It’s an excellent way to boost online sales because glasses are typically something you’re reluctant to buy unless you try them on.
• IKEA studio app. The furniture store IKEA has recently started using AR tech to enhance their customer shopping experience. The IKEA Studio app uses sensory technology in iPhones to show customers how a piece of IKEA furniture would look in their homes. Customers can even redesign their entire space using the app — from adding new chairs to changing wall colors.

Now that we’ve covered augmented reality and looked at several examples, let’s focus on VR technology to better understand how it differs from AR.

What is virtual reality (VR), and how does it work?

Virtual reality (VR) uses advanced computer-generated technology to create an interactive virtual environment that replaces your real one. Users can explore and interact with a completely fictional world in a way that feels real to them based on their senses. For example, using a VR headset, people may see, hear, and even be able to touch various virtual objects through touch simulation and haptic sensations. While augmented reality enhances the real world with digital components, virtual reality blocks the user’s physical surroundings.

You have three types of VR — non-immersive, semi-immersive, and fully immersive. The latter offers the highest level of immersion, with the virtual world feeling very real to the user.

While virtual reality is often associated with gaming, it can be applied in many ways. Let’s look at some of the most interesting ones.

Virtual reality applications

Virtual reality is used across many industries — from manufacturing to recruitment. Here’s how the key industries integrate VR technologies into their processes.

• Healthcare. VR technology use in healthcare is growing, like in many other sectors. VR is already used in several ways — from medical training and patient education to improving surgical accuracy and efficiency. For example, surgical students can virtually explore the patient’s brain or body using a VR headset before performing a procedure.
• Automotive. VR plays an important role in the automotive industry, particularly in helping manufacturers improve vehicle safety. Using advanced VR technology, carmakers can identify possible causes of car crashes and change their prototypes accordingly before they go into production. Car manufacturing companies also use VR experiences to raise awareness of various issues (e.g., the dangers of teenage driving).
• Retail. Retail companies are using VR to make shopping experiences more immersive, fun, and engaging — and to stand out from competitors. Several home improvement retailers allow you to design virtual spaces using their products and then virtually enter and explore them. Fashion companies are also using VR to break away from competition, and you can even attend a virtual fashion show (the Metaverse Fashion Week).
• Marketing. VR is a unique component of marketing and advertising. Marketing agencies use it to create immersive brand experiences and present their products and services in new and innovative ways. Adopting VR technologies in marketing and advertising positions brands as pioneers in embracing cutting-edge innovation and helps them find new ways to connect with their audiences.
• Real estate. The real estate industry uses VR systems to transform the design process and provide immersive virtual property tours. For example, architects and designers can visualize and test their plans in virtual environments before physically implementing them in the real world. For real estate buyers, VR capabilities mean they can get to know a property without traveling to the location.
• Entertainment. Since its development, virtual reality has often been associated with gaming. But film, theater, and music companies are also embracing VR. For example, VR headsets allow people to attend live concerts, festivals, and theater productions virtually.
• Learning and development. Virtual reality is instrumental in high-risk training. For example, pilots may learn to fly via flight simulations, while surgeons may practice complex surgeries before performing them on a real person.

Virtual reality examples

Let’s look at some examples of virtual reality in the marketing, automotive, and education sectors.

• Marketing campaign for TOMS shoes. TOMS is a brand that donates a pair of shoes for every purchase. In 2021, they used VR to bring their brand mission to life. In-store shoppers could use a virtual reality chair to watch and experience one customer’s journey from California to Colombia to meet a child who received a donated pair of shoes.
• Safety training at Peugeot. Many global brands use VR for training — including the French car manufacturer Peugeot. Personnel at Peugeot train using VR headsets to make the training safer, more efficient, and more engaging. They watch interactive 360-degree videos with multiple-choice questions, which they answer by voice.
• The Learn Lab at Arizona State University. The university collaborated with Dreamscape, a virtual reality entertainment company, to create a VR lab experience. This VR experience allowed biology students to interact with various creatures in virtual wildlife sanctuaries and understand why these creatures were dying. Research showed that participating students were more engaged and got better grades.

Now that we’ve covered both technologies and looked at several examples, let’s compare AR and VR to understand their key differences.

The key differences between augmented reality and virtual reality

While the terms virtual and augmented reality are sometimes used interchangeably, they are not the same. Let’s compare the characteristics of augmented vs. virtual reality to see how they differ.

Mixed reality (MR): Combining AR and VR technologies

Mixed reality (MR or XR) is a hybrid technology that merges AR and VR elements. In mixed reality, the user can interact with the digital and physical elements in real time.

XR technology uses depth cameras, sensors, artificial intelligence (AI), and other components to create digitally enhanced experiences that combine digital content with the real world. MR tracks real object surfaces and boundaries, the user’s body positions and movements, objects and physical locations, and lighting and sound.

How did mixed reality develop? While VR and AR were exclusive concepts at first, over time, they’ve started merging into a new extended reality technology.

One of the key milestones in the development of mixed reality was the introduction of Microsoft HoloLens in 2015. This mixed-reality headset shows you computer-generated images (holograms) you can interact with using your voice or hands. It utilizes advanced optics and multiple sensors to display digital images and blend the real and virtual worlds.

Like VR and AR, mixed reality is used in various industries, including automotive, architecture, healthcare, and education.

A look into the future of VR and AR

As AR and VR technologies continue to evolve, we will see them becoming more prevalent in the future, with more interactive AR/VR experiences possible. We can also expect them to bring even more significant technological advancements across various sectors, improving how professionals across various industries perform their work.

The future of the AR/VR market also appears to be very lucrative. According to Statista, the projected revenue for the end of 2023 was US$8.57bn in the United States. With the revenue growing by approximately 14% yearly, the total revenue generated by companies selling AR and VR products is expected to reach US$14.24 billion by 2027.

While AR and VR will likely become more prevalent in most sectors, experts predict the biggest growth in discrete manufacturing, education, retail, and healthcare providers.

In the following section, let’s look at how AR and VR technologies contribute to the metaverse.

How VR and AR are shaping the future of the metaverse

Chances are you’ve heard of the metaverse — a hypothetical, immersive, and interactive future version of the internet. Metaverse is a relatively new concept, which started merely as science fiction.

However, in recent years, talks about this virtual environment have become more frequent, with many leaders in the digital space sharing their plans for this alternative virtual universe.

How does AR and VR relate to the metaverse? AR, VR, and other technologies (e.g., blockchain and AI) will be integral parts of this interconnected virtual world.

The metaverse will use VR technology to create immersive experiences and mimic face-to-face interactions. People will use VR headsets to enter computer-generated worlds and interact with each other. For example, they’ll be able to attend virtual meetings and grab a virtual coffee with friends using avatars.

AR technologies will also be incorporated into the metaverse. For example, people will use AR headsets with transparent displays to visualize and interact with digital objects in their real surroundings (e.g., seeing a friend as if they were in their living room).

Learn more about how the metaverse works, its pros and cons, and how to access it yourself.