1. An augmented reality system, comprising: a user-interaction region; an image sensor arranged to capture images of a user-controlled object in the user-interaction region; a display device which is at least partially transparent and arranged to combine a displayed virtual environment with a view of the user-interaction region, such that both the virtual environment and the object are concurrently visible to a viewing user on the display device; a processor arranged to receive the images and track movement of the object in the user-interaction region, calculate a corresponding movement within the virtual environment that is visually aligned with the movement of the object when viewed by the user on the display device, and control the display device to update the virtual environment based on the corresponding movement; and at least one of: the display device comprising a plurality of partitioned sections, the processor being further arranged to selectively control the display device to reduce the light emitted from at least one partition of the display device at a location coincident with a user's hand, such that at least one partition of the display device emits less light than at least one other partition of the display device and a portion of the user-interaction region corresponding to the at least one partition of the display device with reduced light emission is more visible through the display device than surrounding portions; or the processor being further arranged to selectively control the display device to render black pixels at locations in the virtual environment that are coincident with the user's hands.