Cyber-physical smart city integration of digitalcomponents into the real world will offer a variety of possibilitiesto enrich our daily life. A digital-physical hybrid world makes itpossible to optimize our energy use and to offer morecomfortable traffic management. However, we still need to investigate how to interact with a hybrid world. Augmentedreality and virtual reality techniques offer promising ways forinteracting with a digital-physical hybrid world, but our currentunderstanding of how to use them in the real world isinsufficient. In this paper, we present an overview of two case studies. One is avirtual reality system, the other is an augmented reality system. From our experiences with the case studies, we found thatmaintaining the reality is an important factor in designing asuccessful interaction within a digital-physical hybrid world. We also present a possible future scenario allowing seamlessintegration of a real world and a fictional world for designing adigital-physical hybrid world. We discuss how reality also plays animportant role in analyzing the scenario to create a successfuldesign. The result shows that analyzing people's sense of reality isan important design tool for designing a future dailyenvironment that seamlessly integrates fictional and real worlds.