Will Microsoft make a VR headset? That's the question on everyone's mind at GDC, particularly after chief rival Sony unveiled Project Morpheus earlier this week.

Phil Spencer, corporate vice president and head of Microsoft Studios, hinted during a "fireside" chat with Gamasutra's Kris Graft that a VR headset could very well be in the company's cards.

Spencer said virtual reality is "definitely something that we've been playing with for quite awhile," though it wasn't clear whether he was referring to tinkering with actual products or simply the idea of VR itself.

He cited Microsoft's research arm, a division that pumped out the Kinect and is "hugely important in helping us think about what's coming next." He called virtual reality a "cool technology," likely echoing many people's sentiments.

Phil Spencer
Even the fire was an illusion on a screen

Xbox's virtual future

Spencer gave kudos to Sony's Project Morpheus reveal, saying the company "did a good job in showing" the Tron-like headset during the conference.

Though he's checked out at VR headsets like Oculus Rift, Sony hasn't sent him a Morpheus yet, he joked.

With debate swirling around whether VR will ever be more than a novel peripheral, Spencer addressed the mainstream issue with a measured response.

"There's real [use] there," he said of VR, adding that while he doesn't see a need for every game to require a headset, for users who are stuck in a small space like a dorm room where a 60-inch plasma TV isn't practical, being able to stick a screen on their face may be just the ticket.

And he said that for certain immersive games, VR "can be really compelling." Spencer described "the big hump" as being middle and casual games, but with the tech still finding its legs, time will tell if big players like Sony and Microsoft (maybe) can bring VR out of the game conference halls and into consumers' homes.