Real Time Race has been developing a system that places players side-by-side with the drivers in real races.
The firm's technology would map the circuit just before the race so the virtual track would match up to the one on TV.
The video recording of the track would then be manipulated by the gamer during live coverage.
This data would then be streamed to the player's computer or straight to a television via the internet.
"We can put you in your own car, within real TV coverage of a real race, and in real time against the professionals," said Chris Leigh, the company's head.
To make this possible, ahead of the race, a car with a mounted five headed-camera would need to do a lap to film a 360 degree picture of each part of the track.
Unlike current video manipulation, which rotates the picture, this system allows users to move to places where the camera has not been but still offer a video footage experience.
Roderick Kennedy, the technical officer at Real Time Race, said this gave drivers an immersive driving experience.
"Our data gathering system can generate an image from anywhere on the track so you can drive freely around the track."
GPS sensors help pinpoint a car's position to within a few centimetres, while a rotating drum fires off 64 lasers. The returning light tells the system the distance to objects.
It works like a radar, except this system can map 1.3 million points a second and produce a high-resolution 3D model which the video is "mapped" on to.
Software compiles all this information to recreate the racing environment, including details such as photo-realistic curves that glint in the sun.
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