I guess it uses magic ... or gps ... or something. And it's probably expensive.

As you can tell I've done my home work on this. And by doing my homework I mean I watched this video and made all kinds of crazy assumptions!

Watch the video for yourself here and make your own assumptions ... it's fun!

From the website

Augmented Reality Cinema is a conceptual app that automagically recognizes the location of the user and then plays a scene from a movie that took place in that exact same location.