After a year of rumours and speculation, Microsoft has finally confirmed that it is developing its very own augmented reality (AR) head-mounted display (HMD) that could compete with the likes of the Oculus Rift and Project Morpheus. That HMD is the Microsoft HoloLens, which runs with Windows Holographic and it appears to be fully compatible with the company’s Xbox One console.

The company’s Alex Kipman made the announcement at a Windows 10 Briefing at its headquarters in Redmond, Washington. “We’re not talking about putting you into virtual worlds. Virtual reality might not be for everyone, we’re dreaming beyond virtual worlds.” The device is based on holograms, with videogames playing a key role. In a short video, a player was seen using Minecraft by bringing its world into the living room as a 3D hologram. Kipman spoke about using real holograms to become a part of every day life, assisting in work and more. He even encouraged Oculus VR to come and work with Microsoft making these holograms.

In the image above the hologram functions are on display, with one user wearing the kit to see a Roman Colosseum which another can also see through a tablet. An Xbox One is also on in the background and is display an image on a TV captured by the Kinect motion-sensing camera. The HMD is wireless. No release details have been confirmed at this point in time.

Microsoft has had its name tied to virtual and augmented reality for a long time. The reveal of Sony Computer Entertainment’s (SCE) Project Morpheus HMD at the 2014 Games Developer Conference (GDC) promoted Head of Xbox Phil Spencer to state that it had been working with the technology for a ‘while’. More rumours spread when VR HMD company FOVE became involved with Microsoft and, most recently, VRFocus and TechSpy reported that several developers were working with an Xbox HMD that could be revealed later on in 2015. With this news, Oculus, Sony, Samsung and Mircosoft are all now major players in the VR space.

VRFocus will continue to follow Microsoft’s VR HMD, reporting back with any further updates on the kit.