The drive for genuine immersion is propelling Extended Reality (XR)—covering Virtual, Augmented, and Mixed Reality—past the constraints of conventional computing. This progress is powered by a surge in multimodal data (spatial, biometric, and behavioral) and made possible by a new generation of intelligent, purpose-built hardware. This paper thoroughly explores how data and smart hardware co-evolve to shape future immersive environments. It breaks down the entire data workflow, from capturing multiple data types and processing them at the edge, to AI-powered rendering and secure data storage. The discussion highlights how custom chips, neuromorphic processors, and advanced sensors are tackling challenges of latency, bandwidth, and computation. The paper also investigates the importance of edge and fog computing for enabling real-time responsiveness and personalization. In addition to technical aspects, it examines critical ethical, security, and privacy issues that arise from handling sensitive biometric and behavioral information. The concluding section looks ahead to developments like brain-computer interfaces, real-time photorealistic rendering, and AI-generated content, and sets out a research agenda for developing immersive experiences that are scalable, ethical, and transformative.