AR lets you bring virtual experiences into a more ad hoc setting. You can't really play a VR game while waiting for the bus but you could be feeding your AR pet.
I briefly played the HoloLens AR game where you have to shoot at robotic bugs that crawl out from your walls.[1] The fact that I could duck behind my office partition was awesome. The fact that when I blew a hole in my wall I could see the "studs" behind it was similarly cool.
In an ideal world, I could trace out my house and play up and down the stairs. Or go to a field or forest and play in a whole other world.
It's predictable that big players will want to control every aspect of AR because it gets them complete attention while device is on. Facebook has already pounced. I'm more interested in VR/AR that is in service of user and that means open source.
But that's not to say that fully immersive experiences have no future. I just don't think VR will fully take off until it's available in a small form-factor, and likely combined with AR in the same device.
I, personally, see VR as being much more exciting than AR, from an entertainment and capabilities perspective. I don't want to be limited to my small living room or whatever setting I'm in. When I'm in the real world outside of my house, I can't imagine what AR would bring that wouldn't be completely utilitarian, like replacing my phone/watch with a virtual device, holochat calls, maybe add more trees, etc. But, I'm also not very imaginative.
What do you see in the future with AR?