I think you need a combination of arcade and home gaming to pull it off. The arcade just to set up the basics of the system, and a set of games avalible for the average person. Home gaming however is what can make this affordable, and take on a mainstream roll.
Let's say Nintendo does it first, but you have these small black and white goggles and a few buttons, and it doesn't work all that well. It however make everything else look out of date.
Sega gets involved next, with its "Game Gear" that feautres an adjustable visor, and two seperate controls for the game. One a traditional joystick, and the other a glove. It is still considered very basic, but its range of games, as well as the interaction makes it outsellf everything else.
The important thing occurs once Nintendo and Sega start fighting over the VR market. As the "cool" games tend to be geared towards VR, and a SNES costs a little less then a VR console parents buy their kids the VR more often then not.
Once Sony gets into the picture everything takes a step up. Better equipment, more pixels, and surprisingly the home market finds a company that makes nothing but VR games. By the time the PS3 rolls around it is almost the norm to see people walk about their house running into things as they fight dragons, and robot assassins.