We are in a world where high-end consumer virtual reality devices are shipping to people around the globe, but Microsoft is already preparing for the next era of computing.

HoloLens is one of Microsoft’s new key products, and the company has a lot to say about what it means for the future and for its business. HoloLens is a computer that you wear on your face. It has a screen that mixes together what you see in the real world with digital images. It uses a variety of sensors and cameras to sense where walls and objects are, and then developers can build apps that can interact with those real objects. Microsoft thinks this tech could get developers invested in its Azure cloud platform and that it could usher in a new generation of mobile. But this kind of talk can feel a little premature considering Facebook’s Oculus VR only just released the consumer version of the Rift VR headset in March. Meanwhile, Microsoft only just started selling a $3,000 development kit for the HoloLens — a final product is still likely years away.

But Microsoft sees far more potential in AR as opposed to VR, and it’s not alone. Tech adviser Digi-Capital thinks AR and VR will generate a combined $120 billion in spending by 2020 — but AR will make up $90 billion of that. That kind of money has a lot of industry observers suggesting that AR is going to quickly supplant VR, and Microsoft is playing that up.

Beyond gaming

Oculus as well as HTC, which is launching the Vive VR headset this week, are positioning their devices as primarily gaming machines today. In the past, Oculus executives have acknowledged that this is about appealing to the people most likely to come in as early adopters. Microsoft, however, is not doing that with its headset.

“HoloLens is redefining what mobile experiences can be,” Microsoft corporate vice president of apps and services Thom Gruhler told GamesBeat. “We absolutely see that this will have the potential to be a scaled consumer device. I’m not saying we’ll make it to market by any particular date, but we do think this is more than just a unique gaming platform.”

Most of the current excitement for augmented reality is about its potential as a productivity tool. Using a HoloLens enables people to see data about their world and their work floating in the air and surrounding them — without removing them from their real-world environment. That could change the way doctors, manufacturing employees, and nearly everyone else works. So by pointing out that HoloLens isn’t a gaming platform, Microsoft is pointing out that VR has a narrow focus that limits its appeal to a number of important markets.

“We think there’s real — and this is true industry-wide, but also certainly at Microsoft — R&D commitment to saying that AR can change how compute is done, how we interact with information, and how our experiences with screenless, room-to-room mobile experiences can apply across the board,” said Gruhler. “Not just for gaming, but for enterprise and in the home and so on.”

Today, using VR is an isolating experience. You have to cover your vision and your hearing, and that’s not ideal for most professional or even personal situations. Despite that, we are seeing some VR tools popping up for professionals. These include the Virtual Desktop app that gives you a giant virtual version of your PC inside of a simulation. We tried that out for an entire work day, and it’s easy to see how this could serve certain industries. At the same time, it’s not something that wouldn’t also work in AR.

“The key difference for me in AR is that you’re not taken away from the world you’re in,” said Gruhler. “VR is beautiful for gaming, potentially for education applications, but when you’re in AR, you’re able to be in the world you’re in. That has huge potential for enterprise in particular and probably across the board. So I think we will drift more toward AR.

“The unique thing about the mixed-reality paradigm is that you can reach out and engage with the content you see and have a clickable experience just using your hand and your holographic projection. That, to me, starts to open up what I would call new paradigms for how information is built to be consumed.”

More devices connected by the cloud

Over the last 30 years, we’ve transitioned from text-based computing to graphical user interfaces, from mouse and keyboard to touchscreens on mobile phones. But AR could introduce a new alternative to those physical buttons and screen presses.

“We actually might be doing holographic touch,” said Gruhler. “That’s going to be a relatively big shift in the way compute is done and the UI is done.”

But that doesn’t mean Microsoft is expecting HoloLens to completely replace desktop or even smartphones. Instead, the company is envisioning a future where the cloud enables people to seamlessly take their computing experience from one device to the other and from one room to the next without missing a beat.

“I think from a backend perspective, there’s some unique things we can do with data flow and machine learning that will probably be happening across all those platforms, whether it’s mouse and keyboard or screen touch or mixed or holographic touch,” said Gruhler. “The backend we’ll continue to build. But the frontend user experience can be a relatively big step change in terms of how we interact with information and build UX and UI.”

But games will still matter to HoloLens

While Microsoft is hesitant to position HoloLens as a “gaming platform,” it recognizes the importance of interactive entertainment. Gruhler says that he thinks a lot of what developers are learning today will translate to AR. He thinks that gaming is an important way to introduce people to the idea of a new way of interfacing with a computer.

“It’s something we feel very strongly about,” he said. “That’s why we’ve been pointing at Minecraft, which is our prize game platform — pointing developers at Minecraft to get out ahead of what a game developer at scale can do with something like HoloLens.”

It’s also not limited to Minecraft.

“We’re going to be working very closely with our third-party game publishers and developers and the broader gaming community to talk about what they can do and how they can think about this,” said Gruhler. “There’s no doubt that everyone in the gaming world is moving forward and investing their time to say, wait, can we shift here? Can we change the paradigm of our games or create new titles, whatever they might be?

“There will be successes and failures like any other new platform rollout. But for us, we want to commit to the gaming community that this is a platform for gaming experiences.”