AR is great for stuff you want to do in the real world. Fighting monsters or other players in a large scale physical environment? That's gonna be where AR shines. Think Everquest in the real world. Or Larry Niven's Dream Park.
Want to do stuff that is "impossible" in the real world, like fly in space, superhero stuff, or even fly/drive real vehicles that don't exist anymore or are too unsafe? Then you're looking at either VR or high fidelity physical constructs with the complexity of a full-motion commercial aircraft simulator with AR added on top. VR gets you most of that experience at a fraction of the cost.
HTC can put 100+ gamers around the world in a virtual spitfire cockpit, at a cost of maybe $3000 per player (PC, VR gear, joystick and/or other cockpit enhancements) using VR technology, with the cost absorbed by the players. Using AR technology, it could cost upwards of a million bucks per player for the physical environment, with the costs paid for by HTC.
Think about the costs involved for the motion-sim rides at amusement parks. AR would enhance those rides quite a bit, but in the end people are standing in line for up to an hour for a 5-10 minute ride with 30 other people in seats bolted to a hydraulically manipulated platform with a big TV screen up front. It's passive entertainment at this point, no real participant interaction at all. Maybe AR will permit some participation but that's a long way away. The Dream Park books are a vision of where it could go, but the physical infrastructure behind real AR gaming is going to be hugely expensive. VR brings with it full player participation in impossible or extremely dangerous environments, at a fraction of the cost. And the VR physical environment is as simple or complex as the player desires (or can afford) without costing HTC anything extra.