Magic can be used for different tasks such as lighting fire, combat both offensive and defensive, exploration and maybe more.
First off is how casting would work. Depending on the type of magic you want to use, you would have to move your hands a certain way and move your fingers in the most basic ways as to not limit any VR users. This should be the only option, as voice recognition can be extremely weird as experienced in other games. Each time you use a movement correctly as well, you get a small glow from your hands and a “ting” sound. The color of the glow would vary depending on the spell you’re casting.
Second, the magic. Spells could be both elemental and, well, not elemental regarding the general type it is. Elemental could include fire, ice, earth, lightning, and other ones I don’t care to mention as of now. These can be used for combat and exploration. Fire spells, for example can be used to light campfires, torches, or even cook food. Lightning can be used for combat and can temporarily run across your weapon for an added lightning effect in combat once your weapon has been swung. With Earth maybe you can lift medium sized rocks off the ground and throw it at an enemy (not a Boulder, though. But maybe for an advanced level) and so on. However other types of magic could possibly be implemented in later stages if magic is going to be considered. Such examples would be like conjuring a weapon or shield. These spells would be weak at first, but the more you learn your movements, add on more movements, and keep using such spells they’ll advance to become stronger and stronger. That way, you’ll always have a sword, hammer, shield, axe, bow, or spear at your side. Perhaps during combat you can make a barrier that surrounds you entirely and reduces overall damage, or even learn to do more. Maybe you can use a magnetic sort of spell to lift up your weapon from places you can’t reach. Or maybe, you can conjure an orb of light overhead that lights up the general area around you. Magic in general can spice up the game, and add a new generation of mages and warriors to take down their foes.
Finally, advancement. Magic at it’s base form would be weak, especially the offense and defense kinds. The only way to level up/advance your magic skill (as mentioned earlier) would be to learn new hand movements to add on to the base spell or use the spell more often. This would mean the players would have to put a lot of effort into more learning magic, and experiment often.
Along with all these factors, there could possibly have potions be added that enhance such spells from a little stronger to extremely strong depending on the different contents the potion is made of.