CCP Games is investing heavily in virtual reality, and the "Disc Arena" tech demo the company showed Fanfest attendees in Iceland last year turned into something called Project Arena as development continued.

"This is in active development, we have people actively developing it right now, but we don't have any announcements on an official title," Morgan Godat, executive producer of CCP's VR Labs, told Polygon. Project Arena is a working title, and they company isn't 100 percent sure it will see release in anything resembling its current form.

"We're currently just checking out the VR landscape and the touch controllers we're demoing on today haven't even been released to the public yet," Godat said. "That's the environment we're working in."

The good news is the game has already turned into something that shows the promise of physical, virtual reality sports.

Here's how it works

We tried two game modes, one of which allowed you to use your wrist-mounted shield to knock a virtual disc back and forth as it arced around a red net with a narrow yellow ring. If you hit the net, you lost a point. If you hit the ring, the disc sped up as it approached your opponent. If you hit your opponent, you gain a point.

The second game mode also gave you a shield along with the ability to shift that shield into a disc to fling at your opponent while deflecting their attacks. Both modes were easy to learn, but after a few volleys I learned how much control I had over the disc and began to try new things in order to hit my opponent. The company released an enhanced reality trailer to show off the game in action.

While the demos being shown in Iceland feature two stations, so you can square off against someone in the same room, the team knows that's not a realistic goal for most people's homes. The game is being designed to work well online.

"That's part of the benefit of the way we designed it," Godat said. "You noticed that you're fighting your opponent at a distance, that's not accidental. There's a reason this isn't a hand-to-hand combat game or a boxing game where you expect instantaneous feedback."

The discs being volleyed between the players take time to get to the other side of the board, giving you a bit of time to react while allowing some wiggle room for latency. The fact that the game appears as a stylized world and your goal is to deflect a moving target removes some of the dissonance that can take place when you interact with items that look real in the virtual world but actually carry no weight.

"No one really knows what it feels like to hit a flying fireball that bounces off the walls," Godat explained, "but if you were making something that feels real like with a metal sword in your hand people expect to feel the clang when you hit a shield. We've tried to steer clear of those elements just because you can, the field is wide open."

Your brain doesn't expect your virtual shield or disc to "feel" a certain way, because it's so clearly not real. This, counter-intuitively, makes the experience feel more real when you're inside the game, to the extent that I had to fight a small bit of panic every time I deflected the enemy's disc. It felt like an actual threat, and it took me a few minutes before I felt comfortable enough to smash it back at the person on the other side of the room.

A spectator sport

The demos are also being shown on external screens that show the action from a third-person camera, allowing other people to view the action. That wasn't an accident, the game has been designed in such a way that's it's easy, and fun, to watch.

"It was 100 percent important," Godat said. "Our original game mode was more complex and it was hard to watch, it was hard to follow."

They found that they had to find a middle ground between something that was enjoyable for the players, as well as other people watching the two combatants. "[The original version] was fun as hell to play, you could get into it, there were multiple layers, and depth and all kinds of projectiles going everywhere, but when you're watching someone throw 15 projectiles it was like someone juggling, and then imagine two people juggle-fighting," Godat explained.

"I didn't even know what I was looking at anymore. Whereas the core of sport is a focal point that the entire audience can look at and learn in the beginning and start to learn what the other subtle elements that are happening around it that make the sport so complex. But that ball moving down the field towards the goal, the one or two projectiles ... and the anticipation of the action are what's important," he continued.

The arena is also arranged so the player can face one direction; shots can bounce off the wall behind you but they won't do damage coming from the back. The allows the player to always be facing "forward," so they don't have to worry about anyone spinning 360 degrees and getting tangled up in the cabling.

This decision also means that the game could potentially work on all three major VR platforms, since they the Vive, Rift and PlayStation VR will all support standing VR along with the small amount of room-scale movement necessary to play the game effectively.

"It's amazing to feel how accurate it is, we're kind of hoping this becomes an eSport, but it's more of an eSport sport, because it's an actual sport, so it's kind of like a VR sport," CCP CEO Hilmar Pétursson told the crowd at Fanfest.