The Oculus Quest, a $399 standalone virtual reality headset that’s shipping next spring, was only announced yesterday. But it’s making its third appearance at the annual Oculus Connect conference, after appearing under the codename Santa Cruz in 2016 and 2017. We tried Santa Cruz both years and came away impressed, but the demos were tightly controlled and run on non-consumer hardware. This year, Oculus is showing off a nearly finished headset in more complex scenarios — including a multiplayer shooter staged in a 4,000-square-foot arena. And although plenty of questions remain around the Oculus Quest’s capabilities, it still seems like an exciting step forward for VR.

The Oculus Quest blends elements from the $199 Oculus Go, a casual self-contained headset released earlier this year, and the $399 Oculus Rift, the PC-tethered headset that launched in 2016. Its distinguishing feature is inside-out tracking, which detects user motion with four headset-mounted cameras. By comparison, the Rift uses external cameras to offer the same full tracking through space, and the Oculus Go only tracks your head angle. Oculus product VP Nate Mitchell says Quest is designed for people who are excited about high-end VR gaming but don’t have a Rift-ready gaming PC. It also, obviously, could appeal to any Rift owner who’s tired of all the wires.

Grid View Photo by Adi Robertson / The Verge

Photo by Adi Robertson / The Verge

Photo by Adi Robertson / The Verge

Photo by Adi Robertson / The Verge

Photo by Adi Robertson / The Verge

Photo by Adi Robertson / The Verge

Photo by Adi Robertson / The Verge

Photo by Adi Robertson / The Verge

The headset’s black fabric-and-plastic design looks a lot like the Rift, but it features a rounded and camera-studded front that looks a bit messier than the Rift’s sleek, flat version. Its controllers mirror the existing Oculus Touch, with an analog stick, a few face buttons, and a pair of triggers on the underside. The LED tracking strip now loops above your hand, though — so it’s easier for the cameras to keep in view. Mitchell says that Oculus might make minor cosmetic or functional changes to the device we saw, but that it’s “very representative” of the final product.

The Oculus Quest uses the same optics as the Oculus Go, including a 1600 x 1440 display for each eye, while adding a Rift-like distance slider for the lenses. Like the Oculus Go, its strap has small built-in speakers that serve as very functional headphone substitutes, controlled by a volume rocker on the headset’s underside.

Some Rift games feel completely new with Oculus Quest

But once you’re in VR, its upgrades become very clear. Wireless room-scale tracking can make some existing Rift games feel like completely different experiences. In the devilishly creative first-person shooter Superhot VR, it was easier to pull off Matrix-like slow-motion dodges or completely move around enemies, opening up new options in its puzzle-like combat. On the other hand, Oculus Rift games are often designed to let users stand in one place, no matter how much space they’ve got — so the main benefit is easy setup and less danger of tripping.

As we’ve said before, Oculus’ inside-out tracking system seems to match the Rift’s tracking abilities. And we’ve now seen it perform in a few different scenarios, including a dark, spooky room for the horror game Face Your Fears 2 — although in each case, Oculus made sure there were no blank walls that might confuse the sensors. The headset can theoretically track space as long as it’s got clear visual reference points, but we don’t know the exact limits of its computer vision system. You can “map” a room and do things like overlay virtual objects on furniture, and as with the Oculus Rift, you can draw a guardian barrier around the edges of your play space.

Oculus’ competitor HTC has already enabled wireless room-scale tracking with its Vive headset. The Oculus Quest is much cheaper and more convenient — the Vive’s wireless adapter alone costs $300, and you still need a PC and two Lighthouse tracking towers. It also sacrifices some performance by using a mobile chipset instead of a PC graphics card, though. The headset will ship with popular Rift titles like Robo Recall, but Mitchell says it would struggle running the most graphically intensive games, like the semi-photorealistic space game Lone Echo. “If you have a PC that can power Rift and you’re excited about games, Rift is absolutely the best place to be,” he says.

Oculus won’t enable ‘arena-scale’ VR yet, but it’s an exciting possibility

One elaborate experimental demo, however, shows off an experience the Rift couldn’t deliver. Oculus set up a sizable stage littered with physical boxes, then put six players into Oculus Quest headsets, which overlaid it with a cartoonish Wild West scenario based on the 2016 VR title Dead and Buried. (Oculus says it an internal team at the company built the custom demo for this year’s Connect conference.) Boxes became crates, and players became animated skeletons, who could move between cover effortlessly while firing six-shooters at each other. It created a fascinating sensation of being able to actually touch and lean on virtual objects, and you could enable a crude mixed reality mode to see the “real world” as an impressionistic black-and-white image.

Again, this isn’t completely new — “hyperreality” company The Void, which brought its Star Wars-themed experience to Connect, overlays physical objects with virtual ones. The Oculus Quest just makes it seem incredibly easy, doing away with The Void’s heavy backpack PCs.

Oculus Quest won’t support this arena-scale tracking or the mixed reality mode at launch; it’s from what Mitchell calls the Oculus “Innovation Center.” In any case, most people can’t build their own custom battle stage, so you’d be more likely to see this in a theme park or arcade. But it’s a good example of how Oculus could combine exciting features we’ve seen on other headsets — like wireless tracking or “merged reality” overlays — in a cheap and user-friendly package.

What exactly is inside the Oculus Quest? How long will the battery last? Is it comfortable for sessions longer than 10 minutes? And will its 50-game catalog be strong enough to entice early buyers, when you can get thousands of VR games elsewhere? We can’t answer any of these questions. We can report that Oculus seems on track to deliver a long-awaited headset — and that we’d really like to try that Dead and Buried demo again.

Update 10/1, 5:34PM ET: Clarified that the Dead and Buried Quest demo at Oculus Connect was built internally by Oculus.