I don't know about that. Unseen Diplomacy [0] uses similar tricks to simulate a much larger space than the size of the room. It requires a minimum area of 3m x 4m, which is within the size of many people's rooms (admittedly, I only managed to find this much space when I temporarily had no furniture in the room). It's quite an effective experience.
[0] http://store.steampowered.com/app/429830/Unseen_Diplomacy/
He mentions abstraction over detailism. Good. He mentions cheap battery powered HW, smartphones. Good. And then he mentions some totally unimportant artefacts, fooling our perception.
But he fails to explain the importance of latency and feedback over realism, and the difference in the resolution. The problems of too slow latency, the expected lawsuits, why VR didn't make it into the consumer world in the last 25 years. Technically we were at the very same level 20 years ago already. We just didn't have smartphones.
A VR sightfield is like in a Super Cinemascope movie, like 3:1. 600x200 is perfect, as long as the tracking feedback is fast enough. This is completely opposite to modern GPU hardware, gaming and rendering apps. All this is not needed. A hercules-like graphics card is good enough. High resolution is only needed in the center of field, for the corners light and color information is enough.
Those tricks are used commercially in the "Star Wars Experience" at Disneyland.[1][2] They use a custom-built real-world space which is much smaller than the virtual space the players think they're in.
This isn't going to work in your living room, unless you have a really big living room. But it could work in a classroom-sized room, or a storefront-sized room, or a back yard. You don't need a gymnasium-sized room.
To make this a mass market product, it needs to work without a custom space. The VR gear needs to be able to detect obstacles in the real world. It needs a depth camera. Not much range is needed, maybe 4m or so, enough to detect anything you could run into, trip over, or fall off. The second generation Kinect would probably work.
Real-world obstacles need to appear in the virtual world when necessary, even if it breaks the illusion. If there's something you could trip over in the back yard, that has to show up in the VR world. Worst case, the system dumps the VR world entirely and just gives the user an unmodified view of the real world. This isn't augmented reality, which is reality with a little VR added. It's VR with just enough real world added for safety.
The technology used for the Star Wars experience costs about $10,000 per player. That has to come way down without degrading the experience quality.
[1] https://disneyland.disney.go.com/attractions/downtown-disney... [2] http://www.businessinsider.com/star-wars-secrets-of-the-empi...