This scenario is more semantically complicated than the previous one because all the "virtual reality" elements are in fact computer-modified representations of real-world video. It's impossible to accurately describe this app using either "mixed reality" or "virtual reality."
When you look around and see a live, clear view of the room you're in, that's 360-degree video, not virtual reality. But what if you see live 360 video of a room you're not in - one on the other side of the world? What if that 360 video is not live, but essentially recorded or mapped as a virtual space? What if your experience of it is like you're tiny, like a mouse in a giant house, or like a giant in a tiny house? What if the lights are manipulated, or multiple rooms from different houses stitched together to create the illusion of the same house? It's impossible to differentiate at some point between 360 video and virtual reality.
Purists might say live, 360 video of, say, an office, is not VR. But what if you change the color of the furniture in software? What if the furniture is changed in software to animals? What if the walls are still there, but suddenly made out of bamboo? Where does the "real" end and the "virtual" begin?
Ultimately, the camera that shows you the "reality" to be augmented is merely a sensor. It can show you what you would see, along with virtual objects in the room, and everybody would be comfortable calling that mixed reality. But what if the app takes the motion and distance data and represents what it sees in a changed form. Instead of your own hands, for example, it could show robot hands in their place, synchronized to your actual movement. Is that MR or VR?
The next version of Apple maps will become a kind of VR experience. You'll be able to insert an iPhone into VR goggles and enter 3D maps mode. As you turn your head, you'll see what a city looks like as if you were Godzilla stomping through the streets. Categorically, what is that? (The 3D maps are "computer generated," but using photography.) It's not 360 photography.
The "blending" of virtual and augmented reality is made possible by two facts. First, all you need is a camera lashed to VR goggles in order to stream "reality" into a virtual reality scenario. Second, computers can augment, modify, tweak, change and distort video in real time to any degree desired by programmers. This leaves us word people confused about what to call something. "Video" and "computer generated" exist on a smooth spectrum. It's not one or the other.
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