For decades now, the futuristic dream interface for video games has been some sort of head-mounted display (HMD) that removes the world around you and projects an all-encompassing, head-tracked 3D environment across your entire field of vision. But this dream has been largely dead in the water since the mid-'90s, when everyone from Nintendo and Sega to Atari was prototyping or releasing ill-thought-out Virtual Reality headsets, even though the technology of the time was far from capable of fulfilling the VR promise.

Now, we may be finally be reaching the point where the display technology is finally catching up to our collective virtual reality dreams. At least that's the impression I walked away with after a state-of-the-art HMD slipped me into the world of Half-Life 2 at a Game Developers Conference demo last week.

The demonstration was put on by Forth Dimension Displays, a component maker that has managed to squeeze a functional, commercially viable 1080p monitor into a display area that measures a little less than an inch across diagonally (the company has also recently prototyped a similarly sized screen at QXGA resolutions of 2048x1536—the same pixel count as the new iPad squeezed onto a fraction of the size). By putting one of these HD displays a few inches in front of each eye, you can create an all-encompassing 3D effect that covers a roughly 100 degree field of vision in front of you (Forth Dimension also makes wider displays that can extend that vision field even further).

These screens are currently limited to high-end, specialty market purposes like professional camera viewfinders, advanced microscopy, and military simulation, but the Forth Dimension team has its eye on broader markets like architectural visualizations, virtual tourism, education and, yes, home gaming peripherals.

Getting inside Half-Life 2

To demonstrate that last possibility, the company threw together a rough prototype to demonstrate how its displays could transport players into the world of Half-Life 2. The HMD they were using was a little bulky, and was hooked up to a large cabinet full of whirring computer towers by a thick coil of cables. I also had to put on a heavy vest that helped power the display on my head. For a controller, I held a third-party PlayStation Move rifle whose guts had been replaced with those of a standard 3D mouse, letting me approximate aiming movements just by moving the rifle through the air.

The gameplay experience was far from perfect. While I could look around just by tilting my head and turn simply by physically shifting in place, I could only walk forward in the game by pressing a button on the rifle. Sidestepping incoming fire was out of the question, as was crouching or jumping (though these functions could have all been easily added on a more complex controller, or with a camera system like the Kinect). I also needed an attendant to make sure that I didn't get twisted up in cables as I turned in place, which quickly got a little tiring thanks to the heavy vest.

Still, the visual experience was like nothing I'd experienced before. The 3D image projected in front of me created an all-encompassing world with real depth and fidelity, making me feel like I was actually inside the world of Half-Life 2. The image was sharp and headache-free in a way that watching a 3D image on a screen never seems to be, and, when combined with surprisingly tight head tracking, made me almost forget I was actually in a drafty hotel suite. When an enemy started firing at me, I was able to glance over to where the shots had come from, naturally move my gun in that direction, and fire without having to worry about fiddling with any thumb sticks. It felt like the future.

Turning it into a product

The folks from Forth Dimension were quick to point out that they threw together this rudimentary demo in about three weeks, completely with commercially available, off-the shelf parts, including a totally standard version of Half-Life 2. "All the bits we've got here you can get today," Forth Dimension Sales VP Robert Hoffman said. "All we've done is put them together."

The company is currently talking with a number of "high-end peripheral companies" about putting all the parts together into a consumer PC gaming peripheral, which could be on store shelves "in about a year" after a deal gets signed. Forth Dimension estimates the initial cost for such a product would likely be $1,500 to $2,000, necessarily limiting the market to extremely hardcore gamers at first. Considering that similar military training setups cost roughly $20,000 just a few years ago, though, that price will likely start coming down as production starts scaling up.

While the experience of being inside Valve's first-person shooter was definitely unique, I'm not sure it would be worth that initial asking price, or even the $800 price Sony is asking for a similar, lower-resolution Personal 3D Viewer coming in March (that unit lacks crucial head-tracking capabilities, though). Still, when I took off that display, I was more convinced than ever that we're finally on the technological cusp of a commercially viable virtual-reality environment for home use. Now we just need someone to turn it into a product.