Virtual reality was for decades something that existed solely in the realm of science fiction. I remember watching The Matrix as a child and being blown away by the very idea of a virtual world.

Beyond a few visionaries, most believed virtual reality to be a frivolous pursuit, and rightly so, as the technology could never justify the idea.

The very thought that we could produce a reality that even came close to mimicking actuality was a pipe­dream.

Yet 2016 could be the year that virtual reality becomes not just viable but profitable. We could be taking the first tentative steps into the vast and uncharted territory between humans and their machines.

The great psychonaut Terence McKenna once said that virtual reality grants “the possibility of walking into the constructs of the imagination”. The world of reality is constrained but the possibilities of the imagination are endless. It is this enthusiasm that industry heavyweights including Facebook, Sony and HTC are hoping will come to fruition.

The hotly anticipated Oculus Rift has just made its commercial launch, with shipping to begin later this year. Sony’s aptly­named ‘Project Morpheus’ and the HTC ‘Vive’ are not far behind, with their official launches set to take place in 2016.

Reports are emerging that Google has decided to join the party as well, with CEO Sundar Puchai moving a key deputy to oversee the development of a dedicated virtual reality division.

The Oculus Rift, the mainstay of virtual reality headsets, was the brainchild of Palmer Luckey, a Californian hardware engineer and self­confessed virtual reality evangelist. He was frustrated at the inadequacy of head­mounted displays back in 2011 and began tinkering in his garage, eventually creating a crude prototype of what would become the Oculus Rift.

Following a hugely successful Kickstarter campaign in 2011 that raised $2.4 million, Facebook acquired Oculus Rift for a staggering $2.2 billion in 2014.

At a glance, the Oculus Rift doesn’t look like much; a headset with a screen on the inside. However actually using this technology, even only as I did with an extremely simple demo, is undoubtedly compelling if not merely for its potential.

As I put the headset on, I certainly had limited expectations. How transformative could this headset really be? I thought as I strapped it on in the confines of my brother’s bedroom.

I was instantly transported and found myself looking around a rather basic room containing little more than a desk and some other bland furniture.

However it quickly became somewhat unnerving as I heard music playing and then turned around to notice a faceless gentleman playing the piano behind me.

This foreboding and fear­inducing moment was so unexpected that despite the knowledge that it was a simulation, the immersion alone was awe­inspiring.

This simple encounter was enough to have me boarding the hype train and tingling with anticipation for the technology’s potential. Kyle Mantesso, a software engineer with NAB Labs and my brother, is another who is well and truly on board with virtual reality. Among a growing number of other eager entrepreneurs, he is attempting to develop a new business using virtual reality. ‘360 Reality’ aims to use the Oculus Rift to allow potential buyers to inspect yet­ to ­be ­built houses and apartments.

He points out that while virtual reality is currently pinning its economic hopes in the gaming and entertainment sectors, entrepreneurs like himself are starting to experiment.

“We’re seeing people and businesses innovate and use virtual reality in all sorts of ways. Virtual travel in foreign countries, charity and communication. The health and science sectors are using it for training.”

The most significant step in virtual reality technology is not necessarily visual fidelity but rather the improved tracking and software capabilities of modern devices like the Oculus Rift. The average consumer is able to create and publish software content that can be used anywhere with the headset.

According to former Senior Vice President of EA and current publisher with Oculus Rift, David De Martini, the returns of brute hardware strength are quickly diminishing.

“We don’t need things to look even better; we need the experience to fundamentally change, and the Oculus platform is a fundamental change to how people will experience games.”

Gaming has traditionally been played through a controller on a 2­D screen. One entrepreneurial Melbourne startup, Zero Latency, has used virtual reality technology to do exactly as De Martini predicted and fundamentally change how people experience games.

Zero Latency, which launched midway through 2015, makes interesting use of virtual reality technology by combining it with real world space.

The game taps into the hugely popular ‘zombie horror’ theme and uses an empty warehouse combined with an Oculus Rift headset to transport the player into the midst a zombie invasion.

“Essentially we’re taking the computer from your desk and putting it on your back, combining it with the headset to create a virtual space inside our warehouse.”

Scott Vandelkaar is the creator of Zero Latency and the huge success of his start­up is indicative of how quickly the industry is growing.

“With the rift launching this year we are all excited to see how consumers take to it, it seems like all the major players are dropping their gear this year… we have big plans for more games, not just shooters but more broadly, things like puzzle games.”

This fervent enthusiasm hasn’t convinced everyone however, as some remain sceptical. The virtual reality cynics like to point out that history is littered with the corpses of discarded ideas and devices. Nintendo’s failed 1995 launch of the ‘Virtual Boy’ headset is just one example.

Vandelkaar also points out that there are still flaws in the hardware itself.

“There’s a lot of issues we’ve discovered with VR and all the major companies are doing their best to address them but the number one problem is going to be people hurting themselves in their own homes.”

Motion sickness has been a thorn in the side for virtual reality pundits. Many, if not most, people will experience motion sickness when using virtual reality headsets, however Vandelkaar points out that this usually only occurs when the player is sitting at a desk.

“Playing a first person shooter, you just can’t move around or you’ll get really sick… in Zero Latency though you get to walk around naturally and it feels extremely normal, it’s great for immersion too because your body is completely at ease and it becomes extremely convincing.”

Despite concerns about motion sickness, the numbers are starting to come in and they are undoubtedly compelling. Virtual reality is set to make $510 million in 2016 and predicted to take as much as $20 billion worldwide by 2020 according to Forbes. It is little wonder then that industry powerhouses like Facebook and Google are beginning to take virtual reality seriously.

Given the promise of future investment and a now hugely enthusiastic consumer base it is pretty clear that virtual reality technology will continue to develop and improve.

This begs the rather irresistible question that, in the future, is it possible mankind will be able to create a virtual world that is indistinguishable from reality?

Long before the advent of modern virtual reality, scientists and philosophers, harking right back to Plato’s shadows in a cave have been asking whether our current reality is merely a ‘simulation’.

The simulation hypothesis has been developed by Swedish philosopher Nick Bostrom and purports that we have empirical evidence which could suggest we are existing in a simulacrum.

Without getting caught up in the semantics of what is a very complicated idea, Bostrom argues that if it is physically possible to create life­like simulations it is very likely we are already living inside of one.

Consider firstly that if humans do reach a point of technological advancement where simulations are easily created, it is not unreasonable to predict that they may soon vastly outnumber legitimate organisms.

Then it begs the question of what makes us believe we are a part of the small minority of truly living beings in amongst a vast swathe of simulated realities.

Vandelkaar points to our technology timeline and how quickly it is advancing. The notion of a simulated reality that even 15 years ago – when The Matrix first infiltrated the zeitgeist – seemed impossible is creeping ever closer to viability.

“The saying goes that if it’s possible to create a virtual world where you truly feel like you’re in another place, what are the chances we’re the first ones to it?”

Before we all get too caught up in the inevitable existential angst these types of questions provoke, Kyle rightly points out that simulated reality is light years beyond an Oculus Rift headset.

“Think about how more vastly complicated it is to replicate all 5 senses, combining them to form a single experience and to a point that it is indistinguishable from reality. Audio and visual is one thing but real simulation requires the manipulation of the brain, a far more complex endeavour.”

Whether we’re already living in The Matrix or truly are the first daring pioneers to colonise the vastness of the imagination, virtual reality is here to stay and has potential to be a transformative technological breakthrough for mankind.