Augmented reality, for the uninitiated, is when virtual objects are placed in real-world settings as if they're part of the environment. With Niantic's Pokémon GO, those objects are Pokémon, critters large and small hovering about the user's surroundings.

The problem is it isn't perfect. While companies have managed to polish the technology to make AR seem more realistic, some hiccups still occur that take users out of the illusion. For example, AR can grasp flat surfaces and planes, but identifying unstable terrain is more difficult. It also has limitations with moving objects in a scene, since it can't identify them all at the same time.

Niantic Shows Off Augmented Reality With Occlusion Technology

Niantic, however, has now demonstrated a new kind of AR that's more aware about its surroundings. The studio has just announced that it's planning to let third-party developers use its AR platform, which it calls Real World Platform and claims is improving all the time. To prove that, it released a demo video showcasing a technique called "occlusion."

Using machine learning technology from a company called Matrix Mill, which Niantic has just acquired, it was able to create a neural network that can obscure virtual images behind real-world objects in real time. That essentially means Pikachu can hide behind walking legs in a scene, or pots and park benches, instead of just being superimposed all the time.

Don't Expect To See It Anytime Soon

It should be noted, however, that what Niantic has showed is still technically an experimental proof-of-concept, meaning it's far from mainstream implementation. CEO John Hanke said as much during a meeting at its San Francisco headquarters on June 27, as The Verge reports. Even still, it strongly indicates what the next generation of AR is going to look like, and it's certainly a promising first look on how games such as Pokémon GO or the upcoming Harry Potter: Wizards Unite could be made more dynamic with AR technology that's more aware of moving objects within a scene.

Because it's currently in the experimental stage, there's no telling when it could arrive on commercial devices, but by getting third-party developers involved, Niantic clearly wants its Real World Platform to be as robust as possible, so apps could be born out of it. It's also interesting to question how Niantic's AR advancement plays into its broader plans for the Pokémon franchise, given that the hype has largely wanted down years after it first launched. In any case, this should make any AR developer giddy for the what's possible.