Intel has been showing off Project Alloy, a self-contained headset that combines augmented reality with virtual reality. My first thought was "isn't anything that isn't virtual reality just augmented reality by default?" Well, the answer seems to be yes and no. It seems that alloy will use built in cameras to bring real life objects and people into the virtual world. The demonstration video above doesn't wow as much as offer promise (especially in the commercial at the end), but ultimately I could see these kinds of projects solving the isolating problems that virtual reality could cause. Also, it is interesting that they are designing a self-contained headset that does not rely on an external computer. Which is probably why there is such low quality in the demonstration video when real objects come into view. At least you can finally see your hands in VR. To me, this seems more like what Virtual Reality should be - a virtual simulation that can bring your real body and those around you into the simulation. Saying it is merged with augmented reality is a bit of a stretch for some, i am sure. But probably an important distinction to make.