Crouched on all fours, I crawled forward to peer through a window cut in a sheet of cardboard and into the living room of a friendly-looking monster. Minutes into a demo of a new prototype VR headset from Oculus, the benefits of not being tethered to a PC as I would be with the company’s flagship Rift were becoming apparent.

Oculus is experimenting with a cordless design because it is seen as necessary to make virtual reality appealing to the masses.

Mark Zuckerberg, CEO of Facebook, which bought Oculus in 2014, unveiled the “Santa Cruz” prototype Thursday. Speaking at the annual Oculus Connect developer conference in San Jose, California, he said the “stand-alone” design would fit between expensive headsets like the Rift, which tether to an expensive PC, and cheap ones like Samsung’s Gear VR, which are based around a phone, limiting their power.

Mark Zuckerberg showed a short video of someone trying out a new prototype VR headset during an event in San Jose, California, Thursday.

The most notable feature of the Santa Cruz’s design is the way it uses four cameras to watch the world around you and track your position in space. In my short demo, I could walk around a staged living room to explore a colorful cardboard virtual world. The headset warned me when I got close to a wall.

The Rift headset can also track your position, but it doesn’t afford such freedom. Not only does the PC cord tie you down, but the Rift requires a special sensor to be placed on a desk or shelf in front of you. HTC’s Vive headset has a similar design. The low-cost Gear VR and Google’s forthcoming Daydream headset can’t track your head position at all, limiting you to just turning your head in place.

Santa Cruz is a modified version of the Rift headset, with a compact lump of extra electronics on the back of its strap. Oculus won’t detail what exactly is inside, but one of the team members working on the device said the components are similar to those found in a smartphone.

Zuckerberg yesterday repeated his prediction that virtual reality will become a phenomenon on par with the smartphone, and spoke of one day seeing a billion people regularly using the technology.

Max Cohen, vice president of mobile for Oculus, told MIT Technology Review that the Santa Cruz design shows a possible path to that end. “We think the stand-alone is a sweet spot that gets you most of the way to one billion,” he said.

Intel and Qualcomm have recently showed off cord-free headsets of their own, although they appear to be less polished, and demos made available so far have been limited (see “High-End, Cordless VR Headsets Are Nearing Reality”). Cohen says it is likely the entire industry will converge on stand-alone, also known as all-in-one, headset designs.

Cohen declined to say anything about when Santa Cruz might develop into a product. When Zuckerberg first introduced the prototype on stage, he signaled that it won’t be soon. “It’s still early,” he said. “I don’t want to get your hopes up too much. We have a demo. We don’t have a product yet.”