You can finally walk around in virtual reality.

Oculus still doesn't want you to walk around. But it will let you. And that's a big deal.

The latest version of the Oculus Rift is a prototype called Crescent Bay, following the naming convention of Crystal Cove, the prototype it announced at CES 2014. Crescent Bay is upgraded in a few obvious ways: the screen looks notably better than the current DK2 development kit, a pair of built-in headphones now incentivizes adding decent 3D audio, and there are sensors all the way around the headset, not just the front, so you can turn around without worrying about the external camera losing track of where you are. (For the unfamiliar, this is what allows the DK2 to tell you when you're leaning and ducking.) But the most interesting thing is how much that tracker has improved.

There's a sense of natural, if constrained, motion

The DK2 let you shift around in your seat a bit, and it genuinely was an improvement over the first-generation system, which only tracked the tilt of your head. For today's Crescent Bay demo, though, you're ushered into a cubicle with a foam pad a few feet long and wide, a camera mounted on the wall in front of you at roughly the distance a Kinect might be. You can't get much of a sense of the room from the picture above (they were controlling photography pretty tightly), but it was a gray, dystopian booth that, barring the terrible hotel carpet, wouldn't look out of place in THX-1138 or an episode of Black Mirror. Inside its foam square, you are free. You can kneel. You can walk. You can do more of the things that will trick your body into thinking it's actually in virtual reality, not just a pair of goggles. As much as I like the DK2, I haven't really been satisfied with it since I got to actually walk around in a booth with VR sensors. You're still very cognizant of your limits in Crescent Bay, but there's a sense of natural, if constrained, motion.

The experiences Oculus showed off reflect this. Most prominently, Epic Games has created a new demo called Showdown. It has the feel of a Call of Duty trailer — you're walking through an urban skirmish, kneeling to look at the underside of a car as it flips through the air, ducking to avoid slow-motion bullets, stepping forward to meet a giant robot at the end of the street. A cityscape let me walk right up to the edge and stare down to the street several stories below, increasing the sense of vertigo. But there are also a series of whimsical demos that show off what the Rift can do in calmer scenes. One of my favorite bits was a little cityscape that looked much like the latest Sim City. You're just staring at a town from above, but you can lean down and put your eye right up against the window of tiny houses or walk around the side to see miniature firefighters putting out a blaze. It genuinely feels more like looking at a dollhouse than examining an image through a 2D screen.

Oculus won't talk about the Rift's specs, but everything feels better

Oculus still, however, doesn't think it's ready to get consumers to walk around or even stand up in VR. According to product VP Nate Mitchell, it's still encouraging developers to create stationary games and is selling the Rift as a "seated experience," something CEO Brendan Iribe has been consistently adamant about. At the most basic level, the company isn't even sure how to stop people from running into things, a very real problem that scuppered VR entertainment systems in the '90s.

Mitchell wouldn't tell me anything about the specs — the company is intentionally deemphasizing them in order to focus on the more nebulous quality of "immersion." He would say that the screen was higher-resolution than the current DK2, but it's not the screen from a Galaxy Note 4, the phone inside Samsung's Gear VR mobile headset. He also says that some improved optics help the screen look better, independent of the resolution. Either way, images in Crescent Bay are grainy, but it's not nearly as distracting as the terrible screen of the first development kit or even the improved DK2. The built-in headphones are serviceable and convenient, even if the demos didn't use 360-degree sound as well as some other projects I've seen. I barely noticed lag or latency. And the whole headset seemed to fit a bit easier on my head, though it's hard to tell how ergonomically sound something is when you're wearing it for less than 10 minutes. The experience is definitely getting closer to what Oculus wants it to be: so seamless that the technology disappears.

When is a consumer edition coming out? Seriously, who knows

My biggest remaining quibble is something Oculus isn't actually worried about: field of view. Crescent Bay feels about the same as the DK2, which is to say that while you can see just fine, there's still a bit of a window around the edges of your vision. Mitchell says that the consumer version of the Rift could have a slightly larger or smaller field of view than the current prototype, and expanding it significantly isn't worth the stress it would put on computers to render good graphics at an acceptable framerate.

Mitchell also wouldn't tell me whether this will be the last prototype before the consumer edition. It's entirely possible, he says, that an advanced prototype will come out just before the final consumer version. But he says that the overall level of immersion will be similar. While he wouldn't say more than that, it sounds like Oculus has roughly nailed down the experience it wants out of the Rift, and it's now a matter of upgrading and tweaking the tech to make it better. And when will that consumer version come out? He won't rule out 2014, and he won't confirm 2015, though that's when it's been rumored for.

Crescent Bay is by no means everything we should hope for out of virtual reality. For one thing, there's no sign of the controller that sources said could be revealed at Oculus Connect, and once you're done looking around, nobody has come up with a really good way of interacting with VR experiences. Nor is there a "killer app," a thing that people will genuinely buy VR to use, rather than look for once they've bought a headset out of curiosity. In the long term, this isn't a huge step. But in the short term, it's a welcome leap that inspires confidence in what Oculus might be putting out... whenever that actually might be happening.

Updated Sep. 22nd, 10:15ET: Photo added.