Fresh off his blockbuster success with “The Jungle Book,” Jon Favreau is trying his hands at an entirely different medium. With “Gnomes & Goblins,” Favreau is pushing the boundaries of virtual reality storytelling, and laying the foundation for the creation of a magical world of immersion.

Every new medium needs a good metaphor. For virtual reality, a magical forest is as good a metaphor as it gets.

Favreau’s new virtual reality experience “Gnomes & Goblins,” which was released as a free preview for the HTC Vive virtual reality headset a few days ago, puts viewers in the middle of such a forest. The Vive is a high-end headset with a premium price tag ($800 for the device alone, and another $1000 or more for the computer necessary to run it), which offers users the ability to move about within a space of up to 10 by 10 feet. It’s what’s being called a room-scale experience, and in this instance it puts participants right into a small clearing between a few trees that turn out to be anything but ordinary.

But before one even gets to unearth all the mysteries, there’s an immediate sense of attention to detail, down to the scenery’s earthy, warm colors, the reflection of the moonlight on the leaves of grass and bushes, and small will-o’-the-wisp flying through the periphery of one’s field of vision. (“Gnomes & Goblins” offers both a daytime and a nighttime mode. For this review, Variety got to see a demonstration of the forest at night.)

Taking a step closer to one of the surrounding trees, one discovers small doors and windows, which can be opened with the help of the Vive’s two handheld controllers that are used to simulate hands within the experience. Behind those doors and windows, tiny rooms lit with candles are outfitted with miniature furniture. Stairways leading to second and third floors, with suspension bridges stringing the trees together.

At first, there is no sign of the tiny inhabitants who have made these trees their home, and there’s no task or puzzle that would suggest the need to do anything. Instead, the viewer is free to explore this world on their own terms. The will-o’-the-wisps also help to guide one’s attention, pointing out various objects to look at and places to explore.

But then, a tiny goblin appears. Timid, yet curious, he tries to keep his distance, looking at the viewer and responding to their motions. Extend your hand towards the goblin, and he will move out the way. Move your head or change your position in the room, and his eyes will follow you around.

Eventually, he continues to do what goblins do, which apparently involves a lot of fruit and acorn gathering. One peach in particular has gotten his attention; the goblin is trying hard to pluck it off a tree, but in the process drops it on the floor. Collect it and hand it over to him, and you’re rewarded with not only a bit of a bond, but also a gift that helps to unlock some truly astonishing “Alice in Wonderland”-like magic.

“Gnomes & Goblins,” which was created by Favreau, has been developed by Venice, California-based virtual reality studio WEVR in cooperation with Reality One, with Jake Rowell as creative director and Andrew R. Jones as animation director. During a recent interview, the team told Variety that the team was inspired by both early Disney movies and video games like “Zelda.”

The influence of both video games and the world of animated movies also means that it’s not quite clear whether “Gnomes & Goblins” is either. There are elements of both a story and a game in the experience. At the same time, there’s enough breathing room to make it feel more like a place to visit, or a world that’s in the process of being built.

And it is definitely a process. Favreau and WEVR plan to add to “Gnomes & Goblins” over time, and want to use the preview release to gather feedback from the community to plot their future course.

In many ways, that’s actually fitting for a magical forest. You don’t know what adventures lie ahead of you. What’s clear, even with this early preview, is that “Gnomes & Goblins” is going to be exciting. In fact, the title is so impressive that it will quickly become one of the handful of experiences any HTC Vive owner will use to show off the world of virtual reality to their friends and family.

After all, what’s better to show the power of VR than magic?

VR Review: Jon Favreau’s ‘Gnomes & Goblins’

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