I'm working with Gear VR for a while now so I've decided to take a research on AR/VR history. Let's go backwards...
AR (Augmented Reality) is a newer term than VR.
The first functional AR system was called Virtual Fixtures and was presented at 1992 by Louis Rosenberg, an employee from U.S Air Force Research Laboratory.
The term AR was coined two years earlier by by Thomas P. Caudell, a former Boeing Researcher
The term VR (Virtual Reality) was coined by Jaron Lanier, in 1987, however, stereoscopic devices are far older than that. Before found their own company called VPL Research, Jaron Lanier, as several others, was part of an Atari team dedicated to VR created on 1982 and finished two years later.
If you consider VR out of HMD, so Myron Krueger is a remarkably name with several projects during the 70's. Krueger also coined the term Artificial Reality which was used for a while. I assume the term Artificial Reality as a group composed by AR+VR+CAVE+Holograms.
The first HMD (Head Mounted Display) plugged into a PC was created by Ivan Sutherland in 1968 and have an awesome name: The Sword of Damocles. As this device was partially see-through, it's also pointed as the first AR device. We can trace Ivan Sutherland to most Interaction Design and Computer Graphics technologies but that's not the objective of this post so let's proceed.
Some people argue about an Philco Experiment from 1961 called Headsight as the first motion track HMD. "The Philco HMD displayed actual video from a remotely mounted camera. The position of the camera was moved according to the tracked head movements, creating a sense of telepresence".
If you associate AR/VR to immersion, in 1955, Morton Heilig was the one talking about "The Cinema of the Future". An article about a sort of multi-sensorial device resulting in a prototype called the Sensorama in 1962. A sort of 4d Cinema.
Heilig also designed a HMD called "Telesphere Mask". This device never was builded but granted him a patent in 1960.
In 1939, a popular toy incorporates stereoscopic images on HMD. Nothing digital but close enough to deserve a place here. The toy was called View-Master. Mattel announced View-Master returns on top of Google Cardboard Technology. Not sure if this new version was released.
Before that, we need to look to Science Fiction. In that case, in 1935, Stanley G. Weinbaum writes "Pygmalion's Spectacles" on which he describes "a google-based virtual reality system with holographic recording of fictional experiences, including smell and touch".
At 1861, a polimath called Oliver Wendell Holmes creates a stereoscope using prismatic lenses. Not sure if Holmes stereoscope can be used as a wooden cardboard using today's mobile but definitely Holmes can't claim for a patent not only because some time has passed but also because he deliberately did not patent his invention.
I pointed you several inventions that can be pointed as the origin of VR/AR but the one that, for me, really looks the start of this concepts is the next one.
Sir David Brewster did not invent the stereoscope. Himself make it clear that Mr.Elliot, a "Teacher of Mathematics" had conceived the the Idea in 1823 and even builded a prototype in 1839 but Brewster put lenses on that and popularize his invention, the Brewster Stereoscope. Taking some help from Jules Duboscq, he produced 250.000 stereographs. Cards around the world were produced in order to be used. Sometime this device was also called stereopticon.
Before Brewster a name to be called is Charles Wheatstone who created the stereoscope using two images transposed by mirrors and in 1834 to demonstrate the importance of binocular depth perception. Whetstone's invention uses mirrors instead of lens.
That`s it, we can keep going back in time in order to see advances on optics and painting but I choose to stop here or this post can become infinite long.
I`ll create a section to discuss UX for VR/AR soon. Please, let me know if you have any particular interest on that.