Legend has it that during the first manned balloon flight in 1783, someone remarked, "What good is it?" Benjamin Franklin, standing nearby, offered the famous riposte: "What good is a newborn baby?"

Newborns are about unrealized potential; so are new technologies. Franklin understood that aviation would change the world, though it took the arrival of airplanes to realize some of his predictions. Today it seems to be virtual reality's turn to take flight, perhaps to become as impactful as cinema and television. But the pioneers trying to tell stories in VR are grappling with the same question that confronted Ben Franklin that distant Wednesday in Paris: "What good is it?" Or, more precisely: "How do we use it?"

VR is proving to be as confounding as it is promising, presenting challenges unlike those of any other medium. Yet its opportunities make it all worthwhile to Hollywood, where some are just beginning to grapple with how -- or maybe whether -- to utilize the technology for entertainment. Directors from Alfonso Cuaron to James Cameron are exploring its possibilities; moguls Rupert Murdoch and Jeffrey Katzenberg were given demonstrations. Legendary Entertainment CEO Thomas Tull went so far as to take a small stake in Oculus VR, the current leader in the sector.

"It's a new form of entertainment. I think that's very exciting," says Jon Landau, Cameron's longtime producing partner. "I use the term 'discovery.' It's a medium where the participant is going on a path of discovery that is of their own choosing."

Virtual reality is a three-dimensional artificial environment that the user enters, as if stepping into another room -- or another universe. These artificial worlds are usually (but not always) created with computer graphics, and experienced through some combination of earphones, goggles and handheld game-controllers.

VR isn't new; it's been around for more than 20 years, maturing in military training, flight simulators and high-tech film production, mostly out of public view. But thanks to faster, smaller electronics, VR is now poised to break out as a mass entertainment medium.

Facebook believes in VR enough to be spending $2 billion to acquire Oculus, in a deal first announced in March. Sony is developing a rival system, Project Morpheus. Other companies are also jumping in. Thousands of developers and creatives are working on VR content, from small startups to major studios.

And according to a source within 20th Century Fox, the company is exploring VR marketing and supplemental content for its "Night at the Museum" and "Maze Runner" franchises and the Fox Searchlight Reese Witherspoon-starrer "Wild." The company that will create the content hasn't been chosen.

VR is clearly a fit for Fox's futuristic or fantasy franchises, including "X-Men," "Fantastic Four" and "Avatar." But "Wild" is a surer indicator of Fox's interest in the platform. The movie is a character-driven picture largely set outdoors; it shows that VR isn't just for high-tech adventures.

(Illustration by Grzegorz Domaradzki for Variety)

There have been attempts to commercialize VR before, notably the "Dactyl Nightmare" arcade game and the Nintendo Virtual Boy some 20 years ago. Neither caught on, but today's VR tech is vastly better. Checking into a world enabled by Oculus Rift's goggles (still being perfected) is the nearest thing to teleportation any of us is likely to experience. In moments, you're on a gentle boat trip through lush wetlands. Look up and see the sky. Turn around, and the reeds recede behind you. You can't dip your hands in the water -- yet -- but sight and sound will make you feel like you're far away.

"I think from a cinematic storytelling perspective, we may be right around -- or even before -- (the time) metaphorically, when the Lumiere brothers created 'Train Pulling Into La Ciotat Station' " (in 1895), says Eugene Chung, director of film & media for Oculus.

Another analogy for the current state of VR is TV circa 1938, when early experimental stations were being set up. At that time, there were no sitcoms or episodic dramas, and live sports were primitive, but the medium's potential was clear.

Public interest in VR was proven by the $2.5 million success of Oculus' own 2012 Kickstarter campaign. By early May of this year, it had sold about 70,000 of its developer kits, and its Oculus VR Share site has hundreds of experiences -- like a budding YouTube for VR.

So far, since there is no commercial distribution for VR, most Rift experiences live either on the Oculus site or on developers' computers. Among the sample experiences making the rounds: a zombie-hunting videogame, courtside seats at a basketball game, a live boxing match, a CG trip to outer space.

Because VR was nurtured in gaming devices and simulators, videogames have seemed like the most natural fit for the medium. But many developers are already using it for live-action experiences and trying to find the best way to fit it to narrative storytelling. "The original motto of Oculus was, 'Step Into the Game,' " Chung says. "We've since modified it to letting people 'Experience the impossible.' "

In his message announcing the acquisition of Oculus, Facebook's Mark Zuckerberg wrote, "The incredible thing about the technology is that you feel like you're actually present in another place with other people."