To understand why this matters, watch the video below. The first half shows off Standard AR, where all the virtual objects that populate the scene appear in front of everything else.

The big deal is in the second half, where Pikachu goes in front of some people, but behind others, giving the illusion that Pikachu is actually part of the scene, not on top of the scene.

Not sure how this was done, but this is a bit of a holy grail for AR, especially if the scene analysis and object “occlusion” can be done in real time. As is, this is a proof-of-concept, but that’s not nothing.