The question has been posed by Science Fiction authors numerous times, but it is a very important question for the future of humanity. Consider if you will that in the future humans may live in Virtual Reality, VR environments in off world colonies, perhaps on moons, planets, traveling space ships or orbiting stations.
But can human beings live in long-term VR environments full-time without going stir crazy? After all the current life-experience often has us going stir-crazy as it is, and some people are bored out of their minds. If people are put into a colony, travel will be limited and so too will space, but people are adaptable, can they cope if we make it so, will they need a virtual avatar like friend?
Now there will be a few problems for humans at first, some will not be pre-conditioned to accept this, and they will say; "I Want Out!" and so, too with the virtual friend. But, this does not mean it will not gain acceptance for humans to "try it" or do a test run and then allow them to tell others about it, creating a trend.
It seems a test project is needed first to work the bugs out, and analyze the psychological issues of the transition. One could say that the present "life experience" is nothing more than a virtual world that humans perceive a certain way due to their 5-organic sensors, and that the world would be different if they had fewer or additional sensors, thus, the world already is in a sort of augmented reality as it sits, the way it is seen by humans. Please consider this.