Every time virtual-reality company Oculus brings a prototype of its Rift headset to a show, it takes another big step forward. And the prototype at this year's CES may be the biggest leap yet.

Last January, Oculus arrived at its first CES with a degree of uncertainty. It hadn't yet released the developer-only Rift headset it Kickstarted in the previous fall. In fact, few outside the company had even seen it. Programmer John Carmack had brought an early prototype to videogame show E3 that summer, but since then there'd been radio silence as Oculus' bare-bones staff worked heads-down on the developer unit. Last year's CES was in many ways Oculus' coming-out party. As it turned out, plenty of people attended: the Rift snagged "Best of CES" awards from everyone and their mother (including WIRED, though our mothers weren't involved in the voting).

Since then, Oculus has continually improved and refined the Rift en route to a consumer release later this year. The display has been kicked up to 1080p; the form factor has become sleeker. Perhaps most importantly for adoption, potential latency has been greatly reduced, alleviating much of the "simulator sickness" that can accompany wearing VR headsets. And now, with another CES upon us, others are getting in on the act; Sony announced a new head-mounted display for movie viewing and games. It should be noted, though, that this is unlikely to be a direct competitor to the Rift — Sony's unit gives wearers a 45-degree field of vision, compared to the Rift's staggering 110 degrees.

Oculus unveiled even more this morning. There's a new demo, courtesy of Epic Games. There's a new AMOLED screen. There's low persistence, a display technology that mitigates motion blur and "smearing," both of which can contribute to user discomfort. For the first time, Rift is capable of positional tracking, which allows users to lean and move within the game environment by simply moving their head. And there's a new prototype — known as "Crystal Cove" — that incorporates it all, getting latency down to around 30 milliseconds (on its way to the sub-20 threshold that Oculus considers the holy grail).

"We'll need some seat belts for people. You want to stand up, you want to walk around." — Oculus CEO Brendan IribeThe new demo is visually similar to a previous demo that Oculus used throughout 2013 to show off the Rift's immersive 360-degree playspace. Both were designed by Epic Games, and both occur within the universe of "Elemental," Epic's Unreal 4 game engine demo. The new demo places the user inside the same stone cave, facing the same horned lava-god/monster being as in the previous demo (bear with us here). This time, users play a top-down tower-defense scenario while the horned lava-god/monster guy watches. Like the two previous demos, the visual effects are plentiful.

Unlike the two previous demos, however, it monitors the user's head movements in real space, and it's able to translate those movements into not just orientation changes — looking up, down, or behind you — but also as actual motion, which previously was possible only by using a game controller in conjunction with the Rift. It utilizes an "outside-in" system: an externally mounted camera tracks small LED lights on the prototype's faceplate, adding three "degrees of freedom" (forward/backward, left/right, and up/down) to the Rift's tracking ability. Up until now, developers and early Oculus adopters have only been able to accomplish this by taping a Razer Hydra motion controller to the side of their Rift headsets. Now, though, leaning down while playing the demo brings you closer to the tower-defense game, and lets you watch the armies you control firing turrets and launching minions. It's the first look at an untethered VR experience.

"We'll need some seat belts for people," says Oculus CEO Brendan Iribe. "You want to stand up, you want to walk around."

The demo also highlights the display's low persistence. In previous prototypes, turning your head quickly caused your surroundings to blur, an effect caused by the device registering new movement before the frame had a chance to update. Iribe describes it as "the wrong image being stuck to your face." That's effectively gone now.

"In the past," Iribe says, "people would have to stop moving to stare at something. With low persistence, you can continue to stare at an object or read text while you're moving your head."

A second demo allows users to play EVE: Valkyrie, a space dogfighting game that's part of the EVE: Online universe. Oculus brought the demo to E3 last year on its non-HD prototypes, but the company has updated it with the new feature set and the 1080p screen.

Of course, Oculus being Oculus, how the Crystal Cove prototype accomplishes low persistence and 6-DOF tracking are subject to change.

"This is just a feature prototype," Iribe says. "It's not at all representative of the final consumer look and feel. Once we feel like something is good enough and we're confident we'll be able to ship it with the consumer product, we feel good about announcing it. We still may change how it's done, but we feel great about the positional tracking system. It's been a year in the works, we've tried multiple different approaches, and this delivered the experience we were looking for."

Even the display is subject to change. That's why Oculus won't even cop to the vendor it's using for the screen. "We first showed HD without committing to what exactly it would be," Iribe says. "It's at least going to be 1080p, but we don’t know what screen we're going to use, what size. We didn’t even know the resolution."

Someday, all of those questions will be answered. Until then, there's CES.