Whereas virtual reality replaces your physical world with a simulated one, augmented reality complements it with added holographic overlays. And unlike the constrained atmosphere required to enter VR, HoloLens is designed to be a free-roaming experience -- there are no wires to get tangled in or dangling cords to distract you. The headset, which runs Windows 10 and is cosmetically similar to the unit developers will be receiving come Q1 next year (at a cost of $3,000), sports a clean design and is battery-operated (Microsoft isn't ready to comment on just how long a charge will last). It's also relatively easy to put on and adjust once you're given the initial tutorial and have had your eyes measured for interpupillary distance -- the latter of which was required to properly set up each demo.

There is no "wow" factor when engaging with HoloLens, not even when playing Microsoft's Project XRay game, one of three demos the company had arranged for the showcase. And that's not necessarily a bad thing. Because the experience takes place in the real world, it's not confusing for your brain to accept and navigate -- it truly is a "mixed reality." Even the tap gesture, which requires users to hold one finger upright and "click" the air to select, is easy enough to grasp and replicate.

All of the holographic action -- in this instance, metallic, insect-like enemies pouring out of the walls and shooting lasers -- takes place in a small widescreen window hovering just in front of you; your peripheral vision is left intact. Looking to the far left or far right, however, can very easily break the AR-illusion.

'Project XRay' looks like more fun to play in this photo than in the actual demo.

The gameplay in Project XRay is somewhat frantic, due in part to the insects' rapid movement around the room. This, in turn, had the unfortunate effect of shifting the holographic window, which continually dipped lower as I dodged and twisted, making it harder to find and destroy the enemy bugs. It's a problem remedied easily enough by tightening the headset using an adjustable wheel on back. I, however, opted for a looser, more comfortable fit, so mea culpa.

Though you can rely on voice- and gesture-control to manipulate most HoloLens apps, Project XRay makes use of an Xbox One controller, the triggers of which are mapped to the player's weapons. It's a stark contrast to the "wearable" wrist-mounted laser cannon, overlaid on a physical, wand-like controller, the company showed off during the game's initial reveal. That this playable demo of Project XRay relies on an Xbox One controller doesn't detract from the gameplay, but it is another example of how Microsoft is managing expectations for its AR tech: publicly showcasing its massive potential and privately demonstrating its more practical reality.

Certainly, Microsoft's enhanced and tightly controlled presentations at E3 and its BUILD developer conference haven't helped matters much. Those HoloLens demos paint an ambitious and far-reaching future portrait of how AR will integrate into our lives and not necessarily how the limited tech functions at present, as we've noted when playing HoloLens versions of Minecraft and Halo 5.

Project XRay might not be the killer gaming app to sell Microsoft's AR tech to developers, but there is an, admittedly, less exciting software that should do the trick: HoloStudio. The app is a more accurate representation of what HoloLens can do as a tool and indicative of what early partners are likely doing with the headset. HoloStudio is, quite literally, a creative toolbox that should appeal to designers seeking to build 3D models in a physical space and retail brands that want to offer "virtual" product tours at luxury showrooms.

After scanning the surrounding area, HoloStudio begins by allowing the user to pin their toolbox to the room, filled with all the drawing tools one might find in a scaled-down version of Photoshop, and then proceed to select or create a holographic object. For the purpose of this demo, Microsoft pre-loaded three holo-objects, so no actual 3D sculpting was involved. One object, a wooden placard, was used to let users get a sense of how a 3D-printed object might look in a physical space. That portion of the demo even offered the ability to upload the design to OneDrive or send it directly to a 3D printer.

The others showcased more rudimentary aspects of HoloStudio: An X-wing starfighter floating in the middle of the room was paired with the painting tool, allowing me to walk around and tilt my head to select portions of it, and tap to paint. And a cartoony underwater scene made use of HoloLens' many voice commands, giving me the ability to make the 3D model "life size," "resize" it, or even "copy" and paste certain objects.

Microsoft is managing expectations for its AR tech by publicly showcasing its massive potential and privately demonstrating its more practical reality.

Again, it's not the most thrilling use case for HoloLens, but it is an honest portrayal of how the tech can be applied and a sufficient lure for interested developers. The same can be said for the virtual showroom demo which offered a device tour of a luxury watch. While it was interesting enough to walk around the watch and even "lean in" to hear it tick, it was the HoloLens presentation editor that had the most appeal.

In that editing mode, developers using HoloLens for product demos can build presentations, restructure them in real-time and even check a "heat map" that highlights exactly where a user was focusing their gaze and then adjust things accordingly.

'HoloStudio' offers designers a virtual toolbox for 3D modeling.

There's another key aspect of HoloLens that should help sell the tech, making good on its mixed reality promise, but is, for the most part, uncelebrated and invisible: its audio. The headset features a "non-occluding" audio system that places speakers near, but not on the user's ears, making it possible to comfortably listen to HoloLens prompts and the real-world environment. Microsoft reps on hand wouldn't go into too much detail about the audio tech, but did note it's an indispensable part of the HoloLens experience, saying that it's used to guide users' spatial attention.

Microsoft knows it needs to court developer support for HoloLens, and this extended New York showcase should go a long way towards achieving that goal. Without an ecosystem of apps, HoloLens is, at best, nothing more than collectible fodder for the earliest of adopters and, at worst, a failed sea change for consumer and enterprise technology. It's why the company's been so aggressive in hosting a competition to award development kits to academic institutions -- for which it received seven times the anticipated applications. It's even recently begun a program to greenlight great HoloLens app ideas from inspired individuals who lack the know-how to develop. At present, a rep says over 4,000 "Share Your Idea" apps have been submitted.

With talk of an eventual consumer release far on the horizon, it's clear Microsoft's taking the necessary steps to ensure its AR tech grows up with developers and gets ready to mix with the real world in all the right ways.