The difference between virtual reality and extended reality is:

VIRTUAL REALITY

Virtual reality refers to a totally artificial or computer simulated environment, where nothing is actually real, or including the viewers own environment or whereabouts. It is typically 360 degrees in nature, so that no matter where the individual looks, they see the virtual world. To enter such a virtual reality, or VR, generally requires virtual reality headgear and some kind of device, be it smartphone, tablet, computer or gaming equipment.

EXTENDED REALITY

Extended Reality, or XR, is an emerging umbrella term for different types of computer aided realities. VR, therefore, is a category under XR. Along with VR, there is Augmented Reality, or AR, where a viewer is able to interact with computer simulations overlaying the real world, such in games like Pokemon Go. Typically AR is something you might find on a smartphone or tablet.

XR can also include Mixed Reality, or MR, another type of AR, where the real and virtual words actually interact with one another in a realtime fashion.