Currently in the early BETA stages of development Valve has promised a demo at GDC 2016. What the Theater mode plans to do is allow the gamer to experience even traditional style games with an aspect of VR, completely immersing the gamer in the world of the game by the way of a large interactive screen that displays the traditional game.
This is the same method in which Netflix has approached the VR playing field. The Netflix VR app places you in a large room with an absolutely immense screen to watch your favorite movies and shows. We don’t have any solid indication of what appearance the Steam VR mode is going to take on yet, but we should expect something very similar to what Netflix has done. It would seem that this is the best option to offer VR in a situation where the software itself is not programmed to be interactive.