A group of MPs from the Digital, Culture, Media and Sport (DCMS) Committee will look into the impact of virtual reality on the future of sport, entertainment and news.
It will also examine the addictive nature of some technology and how it affects user engagement with social media and video games, particularly among young people.
A recent report by the Gambling Commission raised concerns young people were being exposed to gambling through video game loot boxes, which involve a player paying money for an item that is only revealed after purchase.
The DCMS committee cited an Ofcom report from August that suggests people in the UK now check their smartphones every 12 minutes and one in five now spend more than 40 hours a week online as a sign of the growing impact of technology.
Committee chairman Damian Collins said the influence that technology now had over daily life was a key factor in launching the inquiry.
“The way we interact with cutting-edge technologies is life-changing for our generation and generations to come,” he said.
“We have the opportunity now to shape that development, setting an agenda that benefits our economy and how we spend our leisure time, while ensuring the right safeguards are built in.
“We’re seeing industries emerge that offer enormous potential for growth such as eSports and gaming where the UK is rightly regarded as a world leader in production.
“We’ll be looking at what action is needed to ensure we remain a key player.”
He added: “Technology such as virtual reality and augmented reality is already an important asset to the film industry, simulated training and gaming.
“We want to understand more about its potential and the future impact it could have on society.
“The development of ‘deep fake’ augmented reality films is already a cause for concern because of their potentially disruptive impact in spreading disinformation.”
The committee said it will look at what skills are needed to ensure the UK remains a key player in gaming, virtual and augmented reality, as well as the future of eSports and the need for ethics and regulation in the industry.
Concerns over the links between gaming and gambling will also be examined, the committee said.
“During our recent inquiries, the committee has heard repeated concerns about the impact to society of the increasing amounts of time that people spend immersed in online worlds, and the potentially addictive nature of social media and gaming,” Mr Collins said.
“We want to explore these concerns during this inquiry and consider what the right response should be in setting public policy for the future.”