Project Alloy differs from other AR in that it is an un-tethered, merged reality. This means you can wander around your space without worrying about tripping over the furniture. Of course you can stress about your furniture hiding zombies but that is another issue. 

Allloy combines compute, graphics, multiple RealSense modules, various sensors, and batteries into a completely self-contained device that offers a full six degrees of freedom. It does not require externally mounted sensors to define a virtual space but uses RealSense cameras to map the actual physical world you’re in.

The RealSense cameras and sensors used in Project Alloy offer full depth sensing. Your hand can be brought into the virtual world and accurately tracked. Intel’s Craig Raymond tracked his hand with  all five digits, complete with accurate bones and joint locations. This did not just prove he had opposible thumbs, Raymond could  place his hand to flip switches to open doors.

Where it fails is that the resolution is pretty rubbish, but Chipzilla still has time to sort that problem out. Intel wants to open source the Project Alloy hardware platform in the second half of 2017, to allow partners to create their own merged reality headsets.

Microsoft seems to be involved in that.  Top Virtual Vole Terry Myerson fold the assembled throngs that Windows Holographic Shell would be coming as an update to all Windows 10 PCs next year, and that Project Alloy would be supported. When paired with a compatible HMD, the Windows Holographic Shell can enable users to interact with not just 3D holographic applications, but 2D applications within the 3D world too.

There is one part of this story which Intel does not seem to have mentioned. The outfit is looking for a replacement for its falling PC chip sales. VR does have the cool factor but it is still a long way from being that product.