Oculus VR’s Santa Cruz was originally revealed at Oculus Connect 3, San Jose, last year. Today the company offered an update on the all-in-one head-mounted display (HMD), and a year in development has brought about some big changes. While the underlying technology appears on-par with the debut a year ago, the HMD itself has benefited from significant change.

The Santa Cruz HMD – now known as Project Santa Cruz – is essentially a redesigned version of last year’s cobbled-together HMD. It’s no longer an Oculus Rift with a micro-computer attached to the rear, and instead a HMD in it’s own right: it’s lightweight, soft to the touch and of a much better build quality. It’s also surprisingly small. In the first touch and use, the Santa Cruz HMD feels lighter and smaller than the Oculus Rift.

This is of course a big deal, as Project Santa Cruz involves mounting all of the compute power within the frontend of the HMD, alongside the tracking cameras. Maintaining comfort through balance would be difficult, but here Oculus VR has pitched the compute power to a standard which, although inferior to a high-end PC, is more than capable of outdoing any of the current mobile HMDs. Oculus VR aren’t being drawn on specification just yet, but did reveal to VRFocus that the current internal processing power is higher than most smartphones currently on the market.

This was evident in the first of two software demonstrations available. Featuring Bogo, a character that appears very similar to some of the aliens that appear in Oculus Rift launch title Farlands, the player can interact with the creature by offering fruit, stroking its head and playing fetch with a stick. Movement is of course encouraged and the tracking holds up perfectly well with both fast and deliberate forward, backwards and sidesteps. This demonstration was obviously designed to showcase the Santa Cruz HMD’s six degrees of freedom (6 DoF) tracking as Bogo would freely move around the player in all directions.

Of course, one of the biggest new additions on this front is the motion-controllers. Offering the same 6 DoF tracking as the HMD itself, the controllers sit somewhere between Oculus Touch and the motion-controller launched for the Samsung Gear VR earlier this year. A touchpad is accompanied by Home and Back buttons, while a trigger and grip button are positioned for index and fore fingers. The same Constellation tracking seen on Oculus Touch controllers is in place, and while they won’t be tracked when behind the player due to the HMD-mounted cameras, the volume in which they can be tracked remains impressive.

Much like the HMD itself, the motion-controllers are of a decent build quality. Lighter than Oculus Touch and ergonomically designed to fit comfortably within a normal holding position, they currently operate using regular AA batteries. VRFocus was informed that the controllers are in fact less far into development than the HMD and will likely see significant changes prior to launch, but even at this stage they appear to be comfortable and perfectly capable of delivering a high quality immersive experience.

One year on, Project Santa Cruz has answered a lot of questions about the future of the technology, but has also posed many more. Oculus VR has suggested that Project Santa Cruz will act as a third pillar between mobile and high-end VR, but how will that pillar be supported? How will it be priced? And, with HMD sales still not setting the world on fire, how can the company avoid cannibalising their own sales next to the Oculus Rift? It may be yet another Oculus Connect until those questions are answered, but right now the hardware is looking ready to take up the challenge of heading towards a consumer market.