Erik Heinrich

Virtual reality technology is poised to take off for home entertainment and gaming as inexpensive headsets become commercially available from companies like Sony and Facebook's newly acquired Oculus VR. But at the same time, VR's computer-simulated environments are expected to transform key industries such as health sciences, financial services, and manufacturing in new and imaginative ways that experts say will improve our lives and the choices we make.

"Virtual reality transforms relationships that tend to be abstract to become visceral," says Jeremy Bailenson, director of Stanford University's Virtual Human Interaction Lab. "Our research has shown that making this cause and effect relationship perceptual, as opposed to theoretical, changes consumer and other behaviors more than other interventions."

VR can be an effective tool even where cause and effect are not obvious. In a collaboration with Stanford's Department of Anesthesia, Bailenson used the technology to place children with chronic regional pain syndrome (CRPS) -- a disease characterized by severe pain, swelling, and changes in the skin -- in virtual simulations that divert their brains from unpleasant physical therapy and treatment. The children use computer-generated doubles known as avatars, a fixture in VR environments, to perform a simple exercise like popping balloons, distracting them from processing pain signals.