Last year while traveling through Belgium to give a talk at WebDox, I had the pleasure of meeting fellow media pioneer Nonny De La Peña, who is defining the field of immersive journalism as a PhD student at the IMAP program at USC.
She later invited me down to campus to try out her semi famous project Hunger in LA, which has been shown at many venues around the world including Sundance Film Festival.  I had tried things like the Oculus Rift before, but the difference with Hunger is that it was built within the MXR lab at USC (which coincidentally gave rise to the Oculus Rift) and the headset has a mast on it that can be tracked by cameras, allowing you to walk around a virtual space.
oculus
Despite the characters being crudely rendered, with no collision detection on them (you can walk right through the characters in Hunger, as if you were a ghost) the feeling of presence the virtual interface offers is uncanny.  I found myself avoiding the virtual characters.  Walking into them, or standing unnaturally close felt uncomfortable. I ended up feeling tremendous emotions, way beyond anything I had ever felt from a video game before.
Hunger Screenshot
I was trying to figure out why this is, and I beleive it is because the HMD and the tracking software that allows you to walk around freely removes all abstraction from exploring a virtual space.  When you remove abstraction, you become emotionally available in a way that you otherwise wouldn’t be had you been viewing the content through a mouse / keyboard / gamepad, etc.
This is extremely exciting to me because it hints at a platform that may actually give rise to the next major media format to come after film, some sort of hybrid that can offer the emotional complexity we get from classic film making, but with the agency we are accustomed to in video games, resulting in something new that is greater than the sum of its parts.
Much like the touch interface of iOS devices removed a layer of abstration allowing computing to become that much more accessible (like when a child can just pick up an iPad and get it, vs having to learn the hand / eye coordination of using a mouse and keyboard), VR takes it one step further, completely redefining the definition of what a “screen” is along with the interface to that “screen”.
A few obstacles remain technologically and socially of course.  The main one being of how to make this new platform mass accessible / installable.  The beauty of the abstraction in the gamepad / TV format is that it neatly fits into almost any living room.  If I need to actually walk / move around to enjoy something, smaller spaces may not work.  And even when the space is large enough to accomodate movement, how do you simulate the mass amounts of agency within games like GTA 5, where you can board and pilot any number of vehicles across a vast virtual space.
A couple of products have sprung up trying to solve this issue of Agency, finding the balance of abstraction to allow something that can work in any sized space while maintaining a decent sensation of immersion. Most notably the Virtuix Omni:

Many other headsets have popped up over the past few months, including the Avegant Glyph, Sulon Cortex, True Player Gear as well as headsets from Sony and Microsoft.  
VR is here to stay and I for one, am extremely excited to see where the industry goes next, and how this unlocks the next generation of interactive storytelling.