Mixed-reality start-up, Magic Leap, has revealed that it is working on a virtual retinal display headset, which is to impose images and interactive video into the real world.

The initial demos of the technology, which were released last year with YouTube marketing videos, promised phenomenal experiences ahead.

Investors reacted with enthusiasm, pouring $1.4 billion into the company and raising its value to $4.5 billion.

After the initial demo was released earlier this year, Magic Leap explained that its technology will use ‘light-field’ technology that mimics the brain’s visual perception to create objects and people looking very real, just as in the real world.

These ‘virtual’ objects and people could also interact with their virtual world seamlessly, the company claimed.

It was reported, however, that the original demos were done using basic special effects from Hollywood, not the actual demos of the technology.

In an interview with The Information, employees revealed that the technology demonstrated to investors requires big and expensive prototypes, and the first commercial headsets wouldn’t make use of the majority of that technology.

Rony Abovitz, CEO, Magic Leap also revealed in an interview with Brand Channel, that the company is also working on building software including cloud and internet services, a unique user interface and experience, and customised operating system components with connections to existing platforms.

The Florida-based company has indicated it is ready to begin testing its product, with a recent job posting which stated: “This position involves collecting data with Magic Leap devices in real world locations.”

In comparison to the company’s device is Microsoft’s HoloLens,  an augmented reality headset, which is already available to consumers.

Although Microsoft is seen to be noticeably ahead of Magic Leap, with HoloLens now available in a developer kit form for $3,000, Abovitz has shrugged off the tech giant’s supposed head-start.his competitors lead in the market.

“If we’re Coke and they’re Pepsi, it’s actually good, because you need people creating a market for soda,” the Magic Leap CEO told The Information.

“They validated us and increased the number of investors banging on the door.”