The "Thief in the Shadows" demo begins inside Smaug's golden chamber under the Lonely Mountain, and you're given a few minutes to look around and enjoy the view before the great beast himself shows up. This is The Hobbit in virtual reality.
I was invited to kneel down when the demo began, in order to get up close and personal with a chest of gold and dwarven helmet, and the illusion of the world didn't break down even when I moved close to these items. My nose almost brushed the ground as I inspected the golden coins.
Then he showed up.
It's one thing to see Smaug on the big screen, and it's quite another to be in a room as he stalks around, teasing you and talking about whether or not to let you go. This is what virtual reality offers that goes over and above watching something on a flat screen; it was clear that this was a massive animal, and sharing the same physical space with it was an intimidating situation in which to find oneself.
Smaug knocks over a column while looking for you, and I had to fight the urge to jump back as it slammed into the ground next to me. The demo ends after he cooks you alive with a great blast of fiery breath, which is likewise something of an unfortunate feeling.
The demo was shown on a Crescent Bay system, which is the prototype of the Oculus Rift consumer version. The visuals were impressive, although we were told the system that was running the demo was built with "beastly" equipment.
This is more of a showpiece for what's possible in virtual reality than a game or experience you're going to play with at home, but it also shows how scenes from narrative films can be adapted to virtual reality. I felt like I was exploring my surroundings as much as just watching something, even though the camera is locked in place.
This was a collaboration between Epic Games and Weta Digital. We'll have more details about how it was put together in a future story.