The first time filmmaker Jon Favreau tried virtual reality, it wasn’t exactly a pleasant experience. "I came here and one of the things they showed me was TheBlu, which was very overwhelming to me," he says. We’re talking in the offices of Wevr, the Venice, California-based studio that developed that experience — one that sends users to a sunken ship in the murky ocean depths. "I'm not a roller-coaster guy, so the intensity was a bit much for me. It took me three tries to get through it."

It’s not the kind of reaction you’d necessarily expect from the director that led Tony Stark to the big screen with the first two Iron Man films, or has brawned his way through comedic roles in movies like Swingers and The Wolf of Wall Street. But that jarring initial encounter lit a spark, Favreau says, leading him to the idea for a massive, interactive VR fantasy world, one that is taking its first baby steps toward reality with Wevr’s newest title: Gnomes & Goblins.

Coming to the HTC Vive on September 8th as a free download (an Oculus version will be coming later this year), Gnomes & Goblins is currently referred to as a "preview", and that’s a fair characterization. It sets the viewer down in the middle of a magical, mystical forest, abuzz with fireflies and glowing candles. And while many VR experiences often try to transpose traditional narrative or gaming conventions into the space, a few moments into Gnomes I realized that Favreau, Wevr, and co-publisher Reality One had something different in mind.

Traditional narrative and gaming conventions are thrown out the window

As I slowly poked around the forest, I realized the trees around me were actually the camouflaged home of some creature; small doors, hatches, and makeshift bridges connecting them into a sort of miniature Ewok village. The doors opened to reveal finely detailed living rooms and food storehouses, while the sticks and acorns scattered across the ground could all be picked and thrown with a click of a Vive controller’s button. The only objective, it seemed, was to just experience the environment. That’s when I noticed a creature scurrying around: one of the tiny, titular goblins running through the tall grass, trying to gather food.

Over the course of the next few minutes, I saw the goblin trying unsuccessfully to pull a piece of fruit down from one of the trees, and leapt up to grab it myself. He scurried off in terror, only to slowly emerge from the grass behind me. He hesitated, pulling back if I made any quick movements, his wide eyes tracking me. Slowly, I handed the goblin the fruit, and feeling like I’d made some sort of tiny friend, watched as he disappeared back into the grass with his prize. Moments later, he emerged with something in return: a tiny hand bell.

It was a minor interaction, and one that wouldn’t necessarily have been that engaging if being played out on a screen. But connecting with the character in a room-scale VR environment, with the goblin reacting to my own physicality in real time, conjured a sense of emotional immediacy that was undeniable. In that sense, the piece serves as a proof of concept for a specific kind of experience — one that’s simply about hanging out in a stylized environment and building a two-way relationship with a character. "Jon wanted to make a world that was this epic Tolkien, Zelda-esque, huge world," says creative director Jake Rowell, who previously directed TheBlu. "We were just like, ‘Okay, for the first one, we've got to bring it down to one location: Goblin Forest. And then we've got to bring it down to one part of the Goblin Forest. We've got to just try to get the basic core things that you're looking for."

The key to that was the interaction with the goblin character. If a viewer doesn’t feel like they’re legitimately engaging with the character in terms of body language, movement, and eye contact, the illusion simply doesn’t hold. "One of the very first tests that we did was very simple: a sphere with eyes on it. Our instinct was, let's start with an eye connection," explains Wevr CEO Neville Spiteri. "And what was remarkable is that even from that very, very early test, when it was essentially just a gray sphere with two eyeballs on it, you felt that there was something real there. And your mind got tricked into thinking that, ‘Wait a minute. This is not like a regular video game. I can actually walk around this character. And he's watching and following me.’"

"It should be an immersive, simulated environment."

While neither Favreau nor the Wevr team were eager to share when new installments are coming or what they may look like, it’s clear the intended scale of the overall project is massive. "The idea for the build that I came in and talked to these guys about was very expansive," says Favreau, but moving forward he wants players to be able to develop ongoing relationships with gnomes and goblin characters that will change and evolve over time. "It should be an immersive, simulated environment, that if you like this tone, and you like this aesthetic, will give you lots to do, and lots of creatures to meet — and hopefully we’ll refine the AI to the point that it really feels like you're dealing with organic characters."

It’s a lofty goal that sounds hopelessly futuristic on its face — one part Ready Player One and one part The Matrix — but it’s the exact kind of VR evolution that minds like John Gaeta at Industrial Light & Magic xLab are also outlining for the medium. One that will allow viewers to jump inside fictional worlds, and build their own stories and personal narratives with the relationships they build and the decisions they make.

But if that’s the ultimate ambition, the Gnomes & Goblins preview represents just the tiniest of first steps — and an effort to determine if Favreau and the Wevr team are even pulling on the right thread to begin with. "For us, it was also very important to test our hypothesis about whether people are going to react to the things that we're finding powerful about presence and about the experience," explains Spiteri. "We’re putting it out there, really early on, just to get some feedback."

"If people like it, then we charge ahead," Favreau says. "But right now, it's too new of a medium to have too much certainty about the direction we're going in. You’ve got to check the compass a little bit, and that encompasses the audience."