In 1961, the first minicomputer, called the PDP-1, arrived at the MIT Electrical Engineering Department. It was a revolutionary machine but, as with all things that are truly new and different, no one really knew what to do with it. Lacking any better ideas, a few of the proto-hackers in residence decided to build a game. That's how Spacewar! was born.

Today, the creation of the Spacewar! is considered a seminal event in computer history. Because it was a game, it encouraged experimentation. Hackers try to figure out how to, say, add gravity or accurate constellations of stars and by doing so would push the capabilities of the machine and themselves.

Tech investor Chris Dixon has said that the next big thing always starts out being dismissed as a toy. Yet it's because so many technologies start out as toys that we are able to experiment with and improve them. As virtual reality becomes increasingly viable, this human-machine co-evolution will only accelerate because, to create a new future, we first have to imagine it.

From Spacewar! To Real War

Growing up in Australia, Pete Morrison always thought he'd be a plumber like his father. His mother, however, had other plans. She noticed his interest in computers and how, from a young age, he spent hours tinkering on the family's primitive Commodore 64 and pushed him to go to college. Lacking funds to do so, Pete entered the Army to finance his education.

As a Signal Corps Officer, he put his technical skills to good use, but much like the MIT geeks four decades earlier, he soon found himself preoccupied with video games. The military had commissioned a study of simulations at the Australian Defence Force Academy, where he was a student and Pete got involved with testing games. One was Operation Flashpoint, developed by some young geeks at a Prague based company called Bohemia Interactive.

"It quickly became clear that the game could be effective for training military personnel," Morrison told me. "Before Operation Flashpoint to train a soldier you had to go out into the field, which was expensive and time consuming. We realized that with this type of computer game, you could design training that would allow them to hone cognitive skills, which would make the in-the-field training that much more effective."

"Also," he continued, "because the game was so engaging we got a much deeper level of immersion, which made the training more effective and led the Australian Military to ramp up investments in video games as training tools."

The Simulation Economy

In the Industrial age, experimentation was expensive and unwieldy. Thomas Edison famously observed that if he tried 10,000 things that didn't work, he didn't see them as failures, but stepping stones to his next great invention. It was, of course, an ultimately effective process, but incredibly gruelling and time consuming.

Today, however, we increasingly live in a simulation economy where we can test things out in a virtual world of bits and avoid much of the mess of failing in the real world. Consider how today we battle test different business models and scenarios in Excel. That was much more cumbersome and time consuming when spreadsheets were on paper, so we rarely did it. Now, it's a routine activity that we do all the time.

As computers have become exponentially more powerful and software algorithms have become much more sophisticated, the usage of simulations have expanded. We use CAD software to design products and structures as well as high performance supercomputers to model weather and even invent advanced materials. When you can try out thousands of possibilities easily and cheaply, you are more likely to identify an optimal solution.

The next era of simulation will be powered by virtual reality and it is almost upon us. Just as Pete Morrison found that ordinary video games could improve tactics in the real world, virtual reality offers the possibility to take training to an entirely new level.

Enter Virtual Reality

In 2005, Morrison left the military and started working directly with Bohemia Interactive. Together, they launched a new company in 2007, Bohemia Interactive Simulations, to focus directly on the military business. In recent years, the firm has been increasingly focused on applying its expertise to virtual reality platforms like Oculus Rift and Magic Leap.

"The advantage of virtual reality is that we can potentially replace dome projection systems, which cost hundreds of thousands dollars, with a VR system that costs hundreds of dollars and achieve the same or greater level of immersion," Morrison says. "That can be a huge cost saver for militaries worldwide and revolutionize how we train soldiers"

Yet, like most technologies, virtual reality is quickly moving from high-end early adopters to more mainstream markets. Strivr, for example, got its start by designing virtual reality systems to train $20 million NFL quarterbacks. It now helps train employees at companies like Walmart, United Rentals and Jet Blue by simulating real-life work environments.

Training your employees in a classroom can help teach them basic principles and, in some cases, help build important skills. With virtual reality, however, you can put them in a realistic environment of say, a sales floor on Black Friday, a construction site or a $50 million airplane at a fraction of the cost. In some cases, training efficiency rates have increased by 40%.

How Humans And Technology Co-Evolve

In recent years, we have come to think of technology in opposition to humanity. We hear that robots are going to take our jobs, that tablets and smartphones are eroding our children's skills and so on. Yet we often fail to take note of the potential for machines to make us better, to enhance our skills and to make us smarter.

For example, as the digital age comes to an end, we need to invent new computing architectures, like quantum computing, to drive advancement forward. The problem is that, although the technology is progressing rapidly, very few people know how to program a quantum computer, which works fundamentally differently than classical machines.

It was with that in mind that IBM created Hello Quantum, a video game that helps teach the principles of quantum algorithms. "We thought, what better way for those unfamiliar with the principles of quantum mechanics to dip their toe into the topic than through a game? The puzzles are fun, so even those who don't necessarily plan to study quantum physics will come away with a better understanding of it." Talia Gershon at IBM Research says.

All too often, we see playing games as just "goofing off," in order to escape from the "real world." The truth is that, by allowing us to go beyond our immediate context, games allow us to learn skills that would be difficult, and in some cases impossible, for us to experience directly. That has the potential to enhance not only our skills, but our lives.