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In January, Microsoft showed a couple of hundred journalists how it would create a version of Minecraft for its upcoming HoloLens augmented reality headset. It was compelling, but basic. Monday's demonstration at Microsoft's news conference before E3 shows a version that has come quite a way in terms of complexity, fit, and finish.

The early demo had a simple Minecraft castle hologram placed on a coffee table and bookshelf on the wall. A Microsoft staffer showed the goggle-wearing journalists in the room how to reach out and tap strategically placed TNT boxes to blast holes in the table and wall in the room. Behind the rubble were lava and caves that teased a Minecraft playing field beyond.

Mojang's 'Director of Fun' Lydia Winters speaks about 'Minecraft' during the Microsoft Xbox E3 press conference at the Galen Center on June 15, in Los Angeles. Photographer: Christian Petersen/Getty Images

In the demo on June 15 at the E3 video game convention in Los Angeles, Microsoft dove right in. The live presentation showed two players interacting in a single Minecraft world, with the HoloLens player controlling the action using voice commands. Even more interesting, the multiplayer game took place between one person wearing a HoloLens and another participant without one, using a tablet. While the tablet user moved about the world, the HoloLens wearer shifted the perspective, zooming in and out. He lifted the playing field up using his hands to reveal a level underneath the first one and marked it to guide her character to it. The other thing this demo had that the January one did not? Zombie pigmen.

Game designer Cliff Bleszinski—a co-creator of the Gears of War franchise, which got an update of its own at Microsoft's E3 event—put it succinctly:

HoloLens demo just stole the show. #XboxE3 — Cliff Bleszinski (@therealcliffyb) June 15, 2015

Others on Twitter were similarly enthralled. “Minecraft just went full Tony Stark,” wrote one person watching the event. Inside the room, the demo was met with vocal and widespread applause—though not quite as much as Microsoft's announcement that it would make the Xbox One backward compatible so users can play older games.

Microsoft says it'll reveal more about the HoloLens version of Minecraft at its Minecon event in London, which starts July 4. The company says Minecraft has more than 100 million registered players in 238 countries and is the best-selling PC game of all time. Microsoft Chief Executive Officer Satya Nadella told the New York Times in April that HoloLens was one of the big reasons the company ponied up $2.5 billion to acquire Minecraft creator Mojang. Now the rest of the world knows why Nadella was so psyched.

For more, read this QuickTake: Virtual Reality