Marco della Cava

USA TODAY

SAN FRANCISCO — Oculus Rift may be one of the ultimate virtual reality toys. But the Facebook-owned company is not ignoring what analysts predict will be a far bigger business: augmented and mixed reality.

"We are definitely investing in it and researching," Oculus PC/VR chief Brendan Iribe told USA TODAY at the Game Developers Conference here. "I think you’ll first see VR blend into AR and MR (mixed reality), before you see HoloLens or MagicLeap become mainstream."

HoloLens is Microsoft's $3,000, developer-only untethered AR headset, while Magic Leap's AR product is shrouded in secrecy and some controversy.

The latest AR/VR report from industry advisors Digi-Capital anticipates a $108 billion industry by 2021, with AR taking longer to develop but contributing around 80% of the total.

Virtual reality goggles, which include HTC Vive and Sony PlayStationVR, close the user off from the real world and present an immersive three-dimensional graphics-powered world in its place.

Gamers are the biggest users of VR to date. Augmented reality also includes smartphone-based games such as PokemonGo, which layers creatures the camera's image of the real world.

Iribe says that he envisions that hardware, namely goggles and sensors, will continue to shrink in size and grow in sophistication. That ultimately will lead first to a closed VR goggle that will be able to use an on-board camera to bring an accurate representation of the real world around you inside the headset.

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"Those will be next steps we take towards AR," he says, describing a futuristic meeting where your long-distance counterpart appears fully scanned inside a meeting space that is a spot-on recreation of where you are sitting.

Iribe used to be Oculus' CEO before ex-Google and Xiaomi exec Hugo Barra was hired in January to run all Facebook VR. Iribe says that what he calls "the magic glasses" — sensor-packed AR/VR specs that look like reading glasses and provide both experiences— are still a ways off.

"That requires a lot of research and development and miniaturization of computers, batteries, displays and optics," he says. "We’re on a path to get there. (Facebook founder) Mark (Zuckerberg, who bought Oculus for nearly $3 billion) is absolutely committed and determined to get there."

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