The secretive Magic Leap likes to call its version of virtual reality "mixed reality" because its head-mounted display superimposes 3D computer-generated imagery over the real world.
One of the few people who has spoken publicly about a Magic Leap demo is the MIT Technology Review's Rachel Metz. Here is how she She described her experience:
"Logically, I know there isn't a hulking four-armed, twisty-horned blue monster clomping in circles in front of me, but it sure as hell looks like it… It's an early prototype of the company's so-called cinematic-reality technology, which makes it possible for me to believe that the muscular beast with the gruff expression and two sets of swinging arms is actually in the room with me, hovering about seven feet in front of my face."
Investors believe they are paying for an entirely different type of virtual reality, named "Mixed Reality Lightfield." Every other virtual reality and augmented reality company tricks the brain into believing it is seeing three-dimensional reality using stereoscopic photography principals. Images taken from slightly different positions, like the one below of the Brooklyn Bridge in 1901, create the illusion of depth when the observer looks through a viewer.
Virtual reality and 3D movies are simply this principal applied to full-motion video. Virtual reality systems based on stereoscopic principals, such as the Oculus Rift and the HTC Vive, can be built with existing smartphone and computer technologies.
Magic Leap projects a digital light field into the observer's eyes, stimulating cones and rods to react identically to the way they would if Metz's blue monster was really in the room with her. Magic Leap CEO Rony Abovitz calls this a neurologically true mixed reality. Magic Leap raised a dump truck load of money to fund its efforts to build a light-field chip using silicon photonics, something that has never been done. Last spring, Abovitz told the MIT Technology Review's EmTech audience that Magic Leap actually had to invent tools to build its light-field chip.
Chinese e-commerce and web portal company Alibaba led the round. Google Inc. and Qualcomm Ventures participated, as did entertainment company Warner Brothers. A complete list of returning and new investors can be found here.
There are three components to this emerging economy that draw strategic investments like this. Traditional entertainment companies like Warner Brothers invest to be at the forefront of an emerging market for virtual reality content. Networks like Google, Alibaba, and Facebook (Facebook did not invest in Magic Leap but spent $2 billion for Oculus) hope to deliver the content, and companies like Qualcomm look to make components for the hardware.
The consumer market for virtual reality is still a few years away. Oculus Rift and the HTC Vive development systems are only now becoming publicly available, and Magic Leap hasn't committed to a delivery date for its Mixed Reality Lightfield technology.