Oculus shows off final Rift virtual reality headset, partners with Microsoft's Xbox

The virtual reality company, which is owned by Facebook, says it plans to offer consumers a wide range of games and experiences when it goes on sale next year, including some for Xbox One.

Oculus VR CEO Brendan Iribe shows off the consumer version of the Rift virtual reality headset at an event in San Francisco, Calif. on Thursday, June 11. James Martin/CNET

Oculus VR, one of the biggest virtual reality companies, is nearly ready to launch its flagship headset for consumers.

The company, which was bought by Facebook last year for $2 billion, said Thursday it plans to launch its Rift headset early next year. But in a twist, the company also said it's planning a partnership with Microsoft that will tie the Xbox One game console to Oculus' device.

The final version of the Rift, which was detailed for the first time, will come with a controller designed for the Xbox One video game console, Oculus said. The device will also include a camera to track your body as it shifts, whether you're sitting down or standing and moving around the room. Those movements are then interpreted in a game to make you feel as though you're in the game world.

Oculus is also working on pair of hand controllers, called Oculus Touch, that resemble small joysticks with looping rings around the base. That hardware is being designed to bring more realistic hand motions to virtual-reality worlds that will let people interact with the environment.

"VR allows us to experience anything anywhere, it is that powerful," said Brendan Iribe, head of Oculus. He said that developers will be able to do unique things using the company's hand controllers and that its partnership with the Xbox sets Oculus apart from other companies that make headsets. "We're on a single mission: VR."

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Through a partnership with Microsoft, Xbox owners will be able to stream Xbox One games to the Oculus Rift so long as it's connected to a Windows 10 PC. James Martin/CNET

The reveal of its final consumer version is sure to help bolster Oculus' efforts to grab the attention of consumers, who until now have only seen prototypes and demonstration videos of the headset. Yet the company has declined to say how much the headset will cost, with executives hinting late last month that it may cost around $1,500 when bundled with a PC costing $1,000 or less.

Consumers won't have to wait long for new games, however. The partnership with Microsoft will bring the entire catalog of Xbox One games, including the upcoming sci-fi shooter Halo 5: Guardians, to the Rift through streaming technology built into Windows 10, Microsoft's next upgrade for its software to power computers, due out July 29.

Xbox games will not be made for the Rift, however. They will instead play on a virtual screen, simulating a theater. The headset will only work with Windows at launch, and both companies said they have no immediate plans to plug the Rift directly into an Xbox video game console.

Phil Spencer, head of Microsoft's Xbox group, said Microsoft will continue to focus on its own Hololens headset technology , which was announced in January. Still, Microsoft is working with the top VR companies in the industry, with plans to make the upcoming version of Windows as appealing as possible. "Oculus had such a head start," he said. "It's good for Windows, and it's good for Xbox."

The promise of virtual reality, and the companies behind it, could be transformative. Put a headset on your head, and suddenly the screen and headphones transport you to a computer-generated world, be that an epic space battle, the forest floor while a giant walks overhead or a massive tower filled with mysteries to solve.

Right now, Oculus' focus is on gaming, as creating virtual worlds to inhabit is similar to what game developers do everyday. But the company is dabbling in computer-generated films with its in-house production division, Oculus Story Studio, and bringing real-world captured video to the Rift that could transport you to far away places on Earth or even elsewhere in the solar system.

Mark Zuckerberg, Facebook's CEO, has said he believes VR has the potential to even change the way we interact with computers, and the way we communicate with one another. "With Oculus," he said in a conference call last October, "we're making a long-term bet on the future of computing."

The consumer version of Oculus' Rift headset will go on presale later this year before it arrives at retail next spring. James Martin/CNET

Oculus isn't the only company making this effort, of course. PlayStation maker Sony has said it's planning to release a VR headset, codenamed Morpheus, made for its video game console next year. Valve, the game maker that developed the celebrated Half-Life and Portal adventure games, said in March it has teamed up with smartphone maker HTC to offer its own headset, called Vive. That device will be launching in time for the holidays.

Each has offered a different take on virtual reality. Sony is focusing primarily on its PlayStation, potentially limiting its reach and support from developers. Valve, meanwhile, has developed specialized lasers and controllers that are shaped like wands to let users control games by moving their bodies in the real world. This has led game developers to create titles that ask players to move around a room.

Despite all the attention, VR likely won't be purchased by mainstream consumers at its start, analysts warn. That's why companies like Valve and Oculus have focused on gamers, who are both voracious consumers and a natural audience for virtual experiences. "It's mass-market in terms of what gamers will be after for 2016," said Brian Blau, an analyst at Gartner.

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Oculus founder Palmer Luckey took the stage Thursday to show off Oculus Touch, the company's in-progress touch controllers. James Martin/CNET

While it works on its experimental controllers, Oculus has said it plans to focus first on games that can be played sitting down, with a controller containing familiar buttons and joysticks that is held by both your hands.

Those game titles right now include Eve: Valkyrie, a space shooting game that puts players in the cockpit during massive, Star Wars-style aerial combat, and Chronos, a third-person adventure game that marks one of the first VR experiences designed from an aerial point of view and not looking through someone else's eyes. Oculus says it plans to put $10 million toward fostering the develop of VR games among the independent developer community.

Whether Oculus' showcase today is enough to convince consumers to put money down for the consumer Rift when it goes on presale later this year remains unclear without a specific price tag.

"Things have come so far so fast," Luckey said to close out the press conference. If you'd shown a video of this event a few years ago, it would have seemed like science fiction, he added. "But this isn't science fiction, it's reality."

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