Realistically, that's probably the best we are getting for a while. VR gaming has had a difficult time. The physical space requirements are immense and the gameplay types have been limited.
A lot of value could be had playing flat screen games this way. Imagine sitting on a plane with a controller in your lap, but it feels like you are sitting in a private loungeroom or some zen environment playing a game on a large TV.
I didn't expect them to show a first-person shooter, but there are so many possibilities for casual games that actual utilize VR/AR in some meaningful way.
The fact that what they came up with was "game in a rectangle, but this time floating in the air" makes me think that either there are major limitations to what the AR platform is capable of or that they're intentionally trying to tell people "gaming isn't a priority here".
A lot of value could be had playing flat screen games this way. Imagine sitting on a plane with a controller in your lap, but it feels like you are sitting in a private loungeroom or some zen environment playing a game on a large TV.