For a look at the (possible) movies of the future, see this:
Virtual Space - the movies of the future
I'll have to read more when I have time, but it sounds like he's describing Augmented Reality which is already an up-and-coming thing in gaming. Your smartphone with built-in camera and position sensors becomes a window or periscope or binoculars you hold up to see virtual elemtns superimposed on the real world view in front of you. Steve Barnes and one of my favorite authors, Larry Niven, wrote about this decades ago in their sci-fi book "The California Voodoo Game", where it was basically LARPing with augmented reality goggles in a built environment. Moer recently this past Christmas, you could buy a little toy plastic gun-like device, to which you strap your ipod or iphone, adn with a downloaded app, have a "ray guyn" thast you could use to see and shoot virtual targets and monstes in the world around you. The implementation is still kind of rudimentary. They are even working on a vesion of this for my favorite old role-playing game; "Traveller".
But I think there's a break between what could work for gaming,a nd what works for passive media like movies.
1: when you go to see a movie, you're looking to get a specific vision created by a specific director, who has made all the creative decisions, along with the DOP and editor, for precisely-selected framing and lighting and everything else. WHile initially exciting, because it's new, making yourself the "director" and walkign around in the virtual space of the movie takes most of that away and erplaces it with a different aesthetic. Frankly, for some audiences, that's too much work, and they don't have the artistic knowledge to navigate the experience well from the start, so they might get frustrated at having to back up the plot and look at it again from another angle. For others, this would be loads of fun. i can imagine this rapidly getting a following in adult entertainment, for example. And that's likely where people will see it first anyhow, since that industry is more forward-thinking about adopting new technologies.
2. I think this is a technology better suited to game-movie hybrids. Like, you play the detective, walking into a crime scene. There, the ability to rove in a nonlinear way is an asset to the puzzle-solving fun. But would this be effective for a romantic comedy or other drama? Those things work because an elaborate set-up drives you to a specific time and place and payoff.
I would not say it will never happen. I'm saying there are reasons people like things the way they are.
An interesting reply, with many good points. The reference in the essay to the film "A Christmas Carol" should have been "Scrooge" 1951, starring Alastair Sim with George Cole as the young Scrooge.
I don't mind what applications of VS happen first, as long as someone starts work on it soon!