Microsoft unveiled headgear on Wednesday that overlays holograms on the real world, in what it touted as the next generation of computing.

The US technology titan debuted its HoloLens capabilities built into its coming Windows 10 operating system and showed off goggles that let wearers use their hands to interact with virtual objects.

"Until now, we've immersed ourselves in the world of technology," Microsoft's Alex Kipman said introducing HoloLens at a press event at the firm's Washington state headquarters.

"But, what if we could take technology and immerse it in our world?"

Windows Holographic creates three-dimensional images in the real world, then lets people wearing the headgear reach out and manipulate virtual objects.

Kipman said he invited virtual reality innovators, including Facebook-owned Oculus VR, to explore adapting different applications for the goggles.

"Holograms can become part of our everyday life," he said.

Microsoft chief executive Satya Nadella touted HoloLens and Windows 10 as a "mind-blowing" experience that will open a new type of computing.

"Today is a big day for Windows," Nadella said as Microsoft provided a look at its latest operating system at its headquarters in Redmond, Washington.

"We want to move from people needing Windows, to choosing Windows, to loving Windows; that is our bold goal for Windows."

Industry tracker Forrester predicts that what it refers to as mixed-reality computing will catch on by the year 2020, and include Internet giants Apple and Google weighing in with holographic offerings.

Millions of people will likely buy HoloLens by the end of next year, especially if Microsoft targets entertainment and particularly games who are proven early-adapters of technology, according to Forrester.

"If successful, HoloLens will ultimately expand the way people interact with machines just as the mouse-based interface did in the 1990s, and touch interfaces did after the introduction of the iPhone in 2007," said Forrester analyst James McQuivey.

HoloLens also has the potential to radically improve how firm's operate when it comes to collaborating from afar, training employees, and tending to work outside offices, according to Forrester analyst J.P. Gownder.