This has been bothering me a bit. Well, not really bothering, but I am curious. These two concepts, augmented reality and alternate reality, seem to overlap so much that these days it's hard to say which is which. I was actually asked about this just yesterday and I really couldn't say for sure what's the difference. I did give my own opinion. The discussion was initially sparked by a news article about a treasure-hunting location-based game, which was referred to as augmented reality.
This is a tough one. There are no clear-cut definitions. The distinction I make between the two is largely based on the meaning of the words augmented and alternate. Augmented reality enhances reality or our perception of reality with additional information. I do admit this is based on the impression that the first augmented reality applications left on me. I mean the ones that use AR tags which viewed through e.g. a mobile phone show a 3D model where the tag is. Generally, I see augmented reality as something that overlays the real world with additional information. Augmented reality vision is perhaps the clearest example. The primary content of such applications is reality itself. The overall experience of using the application revolves around reality. Admittedly it gets really fuzzy really fast.
Alternate reality on the other hand is something of a replacement reality. These are mostly games that have their own game world which is linked with reality, most commonly by location. Shadow Cities, that mobile game where players battle for influence on a map overlaid on top of the real world is a pretty solid example of an alternate reality game. The game content is primarily virtual and the overall experiences revolves around the virtual component, i.e. the game that is being played. In this case reality enhances the gameplay experience more than the other way around. Players of alternate reality games are not driven by needs based on reality but on needs provided by the game. Again, this gets fuzzy and does it quickly.
Ultimately it's not a big deal. It's just nice to be specific. It is also clear that these two terms do not overlap entirely but they do so a lot. For the record, I would say that a location-based treasure hunt game is alternate reality, not augmented. Bonus question: is geocaching alternate or augmented reality? That is a tough indeed...
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