The application explains the relationship between the primary image, the peripheral image, and a depth camera that tracks the position of the user. The peripheral image is derived from the primary one, with corrective distortion applied based on the user's perspective, the topography of the room, and even the color of the walls and upholstery. A projector is tasked with displaying the peripheral image, which will have a lower resolution than the primary one.
Rather than being the focus of the user's attention, the peripheral image is designed to provide environmental awareness. As I've discovered using triple-screen surround gaming configs, even limited peripheral vision can enhance the gaming experience greatly. The lower-resolution image shouldn't be an issue, since the player's attention will be focused on the primary display.
Source: The Tech Report