Immersion is the factor in which the user is engrossed in the world you presented to them. The more believable the world, the more immersed the user will be, and the more successful the message the experience is trying to convey. The successful developer will try to achieve the highest level of immersion possible.
The human mind will always try to make sense of what it's seeing; that is true for all human interactions. This fact is particularly interesting for virtual interaction because what the human mind is trying to make sense of is not physically there. The more elaborate the lie, the easier the mind will believe it. So the art of immersion is the art of telling the perfect lie to the mind. And as all good liars will say, if they were honest for that moment, the way to tell the perfect lie is to mix it with the truth. By that definition, augmented reality is the perfect way of telling a lie.
By mixing the virtual content with the real world, the user feels connected to the content presented in a way most other virtual medias fall short of. Watching a user interact with augmented reality content for the first time is always wonderful. Often, we can see that the user forgets for a moment that they are watching the virtual content through the screen of their device and try to grab it with their hands as if to check it's not really there. It happens almost consistently and certainly subconsciously. This is indicative of how much the user is immersed in the action.
What adds to the immersion as well is the way the user can interact with the augmented reality content. The user can view the content from almost all angles. They can walk around it, come close to it, and walk away from it. The fact that it stays consistent with the world around them, maintains the connection between the user and the content. If the experience is mixed with the right audio and/or video content, it can be something that brings a smile on the user's face.
Interactivity can even come in the form of a game structure that allows the user to directly affect the content being displayed. Interactivity of this kind can be very entertaining for the user and a fresh way of playing a game.