Oculus is working with Xiaomi on a self-contained $200 headset shipping in 2018, Bloomberg Technology reports. The device’s prototype will reportedly be called “Pacific,” loosely following Oculus’ California-centric naming conventions. It’s supposed to look like a “more compact” version of the Rift, and it will be a fully standalone device, not connected to a PC or phone. Bloomberg says it’s lighter than Oculus and Samsung’s Gear VR mobile headset, and will have more powerful graphics, courtesy of a Qualcomm Snapdragon mobile chip. However, it won’t have positional tracking, which will create a major feature gap between it and higher-end headsets — including Google’s standalone Daydream devices, which were announced earlier this year.

The Xiaomi partnership could be similar to Facebook-owned Oculus’ previous partnership with Samsung on the Gear VR. However, according to Bloomberg, the new headset will also have a custom version for the Chinese market, with Xiaomi branding and some Xiaomi software. Facebook (which Oculus promotes as a sign-in method) is banned in China, and Chinese VR headsets tend to have their own app ecosystems, so this would let Oculus tap a huge market that it might otherwise have trouble entering. Xiaomi has already produced multiple smartphone-based VR headsets, and Facebook’s VP of virtual reality Hugo Barra came over from Xiaomi earlier this year.

A step slightly backwards for Oculus

The device Bloomberg describes sounds markedly different from Santa Cruz, the standalone prototype that Oculus showed off at last year’s Connect event. Santa Cruz included several cameras that allowed inside-out tracking, giving it similar capabilities to the Oculus Rift. Inside-out tracking is still a somewhat finicky technology, and Oculus may have decided that pursuing it in the short term is less important than getting a very cheap self-contained headset out the door. (For reference, the Gear VR costs $129, and requires a Samsung phone.)

Other companies have made different calls: full tracking is a major draw for Google’s standalone Daydream headsets built by HTC and Lenovo, which it announced earlier this year. It’s a bit disappointing to see Oculus take what looks like a step backwards from its earlier tech, although the feature is supposed to be coming in a future generation of the product. As for when we’ll see Pacific, Bloomberg writes that Oculus will start briefing developers on it in October, the month of Oculus Connect 4, so it’s possible they’ll be unveiled at the event, which is held in San Jose on October 11th and 12th.