Both augmented and virtual reality (AR & VR), operate via a head worn display (HWD). The miniature display can be many things such as a LCD, OLED, LCoS, or even a line source of diodes scanned across the field. But they are typically small. The idea is to collimate the light from the display such that the eye sees the magnified display at a distance out in front. Very similar to looking at a slide through an eyepiece. You place the slide (or object) in the front focal plane of the eyepiece and you can see a magnified image of that object.
The difference between AR and VR is that AR allows you to see the real world while superimposing text or graphics in front of it (medical procedures, assembly aid and so forth). VR is closed off to the real world and you are immersed in a virtual environment (watching movies or playing games etc.)
There are many different ways to design one of these. The important thing that drives the complexity and size of the HWD is the required field of view. If you just want a small field that’s about 10 degrees square, it’s fairly straight forward. But driving up the Field to 60 degrees or more can be a challenge. The human eye can see about 120 x 120 degrees (horizontal and vertical). A 65” TV at 10’ distance will be about 28 degrees. So you can see how important field of view is in a HWD.
One important design consideration is that your eye must be located at the exit pupil of the optical relay. You want the light from every field point to get into your eye all the time. Since your eye rotates about 12 mm behind the cornea, the pupil rotates as you move your eye around. Think of it like a 5” diameter circle on the outside of a basketball. Rotate the ball about it’s center and watch the circle move around as it pivots about the center of the ball. The circle is your pupil and the ball is your eye. So when you rotate your eye to look at the corner of the field, your pupil moves over and up. So if the exit pupil of the optical relay isn’t large enough to cover this motion, then the light from the other side of the field will not get into your eye and that part of the image will disappear.
Then there is eye relief. What is the distance between your eye and the nearest optical element of the display? Is it large enough for a user to wear glasses?
Designing head worn displays is a real challenge, especially since users want something light weight and compact. There are many, many different design forms and approaches out there. But in summary, the challenges are field of view, eyebox size, form factor (size and weight), and optical fidelity (image quality).