A near-eye display for an augmented reality display system couples a self-emitting microdisplay to a transmissive waveguide through an input coupler. Light from the self-emitting microdisplay propagates along the waveguide and through an output coupler for generating a virtual image that is visible together with a real-world scene through the waveguide within an eyebox located in front of the output coupler. A light sensor detects light levels within different portions of the real world scene visible within the eyebox. Drive electronics control the light output from individual pixels of the self-emitting microdisplay to preserve desired local contrast values between the virtual image and the real-world scene.