The concept of a "virtual" reality has existed for decades and has nebulous origins, but the first technological steps can be pinpointed to Ivan Sutherland's head-mounted display (HMD); the device, lovingly-dubbed the Sword of Damocles for its massive size and imposing demeanor, was built in 1968 and placed the user into wireframe rooms. The term itself, "Virtual Reality," didn't even popularly exist until 1985.
Since Sutherland's pioneering innovations, the industry has had disorienting cycles of ups-and-downs for Augmented & Virtual Reality tech. There were holes in the yet-unfolding plot: Missing technology (we'd only just moved from tubes to transistors), a smaller pool of talent, and the interest and funding were primarily in medical or military-industrial fields.
The equipment that was purpose-built for those fields made tremendous technological leaps, but would by-and-large never be faced with a consumer. And, as with many technologies that started in the military, much of the early VR/AR equipment was classified.
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