Epic Games founder and CEO Tim Sweeney has designed Unreal Engine 4 technology to work across all platforms, including the emerging virtual reality (VR) and augmented reality (AR) markets. With the company offering its game engine technology for free (with a 5 percent royalty fee on for-profit games), there are new companies using UE4 in both VR and AR. I caught up with Sweeney to discuss how VR and AR will change the game in this exclusive interview.

How do you see VR impacting the types of games people will play in the future?

New genres will immerge from VR. It’s not completely clear what they’ll be. If we look at the transition from PC and console gaming to mobile gaming, we saw the input paradigm of having a touch screen really changed things. Some genres of games that worked really well on a PC and console didn’t work very well on touch screens, and some genres of games just worked magically on touch screen and emerged and took on a new life. We’ll see the same thing with VR. It’s not clear exactly what the genres will be, but the driving factors will be immersion, direct interaction within the spatial world that you feel like a participant in.

Do you feel VR and AR will eventually merge?

Let’s start out by defining terms. VR is an experience where you’re sitting and looking at computer graphics and with a wide field of view and the world behind you is always entirely occluded. Augmented reality is an experience where you see computer generated images intermixed with the real world behind you with some sort of alpha channel to control the blending between the two, which ideally is a perpetual phenomenon. So you can have foreground objects that are computer-generated and occlude background objects that are real, but temporarily it might just be like a single variable LCD for eyes which enables it to go from 100 percent blacking out to 100 percent letting the world through. So from that point of view, augmented reality is an absolute superset of virtual reality.

Everything you can do in VR you can do in AR, but you can do a lot more in AR. If we judge it that way it’s fairly natural to conclude that a very long-term gestation of the industry is augmented reality, but that’s really hard to get right. The products that are being shown publically are fairly limited in field of view and fairly bulky, bulky enough to the point that you don’t want to walk around with this augmented reality device on your head in the supermarket and interact with it like you might interact with a smartphone. So clearly the revolution that is beginning here is starting with VR. The VR hardware is available now. It’s polished.  It’s sufficiently high quality to get going.

The smartphone still hasn’t replaced people playing console or PC games. Do you feel down the road VR or AR will eliminate that 2D screen experience for gaming?

Right now we’re going to see a coexistence between PC and console gaming, smartphone gaming and VR, but I believe ultimately everything will become AR. If you look at smartphone versus PC right now there are strengths and weaknesses. The PC has much higher graphics capabilities and the ability to offer much more immersive and physically realistic game experiences. It comes from the horsepower of the hardware, but the smartphone is far more convenient and it’s in your pocket.

But when you’re working with it you have a pretty tiny field of view. With augmented reality you’re going to have the best of all of these different worlds. You’re going to have a better display system that is far better than any PC or console today, and you’re going to have a portable device experience that is far more convenient than even the smartphone because if you’re always wearing these augmented reality glasses, it’s always on. You can always interact with it.

Has Unreal Engine 4 been designed for augmented reality?

Oh, absolutely. We work on all the major announced VR devices and we work on a lot of undisclosed things too. We aim to provide the engine of choice for development on every one of these future-forward looking devices. I think augmented reality is going to be even more demanding than VR with its requirements and graphical fidelity, fast engine response times, and high-end capabilities. In VR you see nothing but computer imagery and you can tolerate something short of physical realism in some cases, but in augmented reality you’re mixing objects in with the real world. Your brain isn’t going to tolerate anything short of photorealism, however stylized it might be.

Today a developer can create a game with Unreal Engine 4 and have it play across mobile, console, and PC. In the VR space do you see that also working across AR and VR?

They’re essentially the same medium. Any VR game you build has to be completely immersive. You have to run in AR and play in the same way. There will be some augmented reality apps that might not completely translate to VR just because if your AR game is still scanning the contents of your room around you and adding detailed objects in on top of that, your VR experience might not be able to replicate that exactly. But I think you will see a broadside of many platforms that you can target simultaneously.

You’ll be able to build one game in AR and VR and eventually have that run as a traditional PC in console game. The long-term trend is everything is ultimately going to be designed almost exclusively for these four platforms when they reach a large enough user base. In the first three years, having that transition is important so you can build a game and ship it to the whole audience and not be confined solely to the VR audience. If you can double or triple or quadruple your potential customer reach, then that enables developers to spend more on their development.

Facebook is a social media giant. What opportunities does VR open up for the way people interact?

The potential for social connections in those immersive environments seem far more real and visceral than ever before, which depends on cameras and a bunch of new technology that’s in earlier stages than the VR hardware itself. Social interaction on computers and smartphones today is you typing or speaking to some person looking at a crappy screen with some stuff streaming over the Internet. It’s very indirect and unlike actually interacting with somebody.

When you bring that to VR you have a whole new dimension, where it can feel like you are really there with the person and really interacting with them. It’s hard to predict what that will do to games, but I think it will be very substantial and entirely different in its impact than with the multiplayer PC game heritage, where you have a shared experience but it doesn’t really feel like you are there with the person.

What are your thoughts on Windows 10?

Windows 10 I going to lead the way for gaming because it’s finally an awesome operating system. We’ve gone through some rough times with Microsoft over the past decade as they’ve gone from mediocre graphical system upgrades to shareable ones, but Windows 10 brings Windows back to the forefront. It’s awesome and it puts PC gaming in a much more important position in the industry than it was in the Windows 8 era.