Oculus has debuted the consumer version of its Rift headset, due to go on sale next year, and announced a partnership with Microsoft that will see the virtual reality headset work with Xbox One games.
The company also unveiled its new controllers, Oculus Touch, for use with the virtual reality environment.
Chief executive Brendan Iribe unveiled the headset, which has a custom display and optics system, with two OLED screens that offer a wide field of view.
“Since the inception of Atari and Apple some 40 years ago we’ve been on this journey of incredible breakthrough and progress,” he said.
“We’ve been immersed in this world of gaming. But there’s been something missing… it’s always been trapped behind a 2D display.
“With this device, you’re going to finally be able to teleport to new worlds. You’re going to be immersed in games. You’re going to experience games as you’ve always dreamed of experiencing them. Oculus Rift is going to deliver the magic of presence, the feeling of really being there.
An external sensor can be placed on the desk, plugged into the rear of your computer. The tracking system is more precise, with low latency. Its ear phones are removable to allow players to use their own.
“This is the beginning and it really delivers the magic of presence,” he said.
Mr Iribe said including a gamepad in this version of the Rift was important, before announcing it would ship with a wireless Xbox controller. That will allow developers to create games with something familiar, that they know all players will have.
The Rift will also include Oculus Touch controllers, wireless input devices that will enable players to interact with the virtual reality environment.
"One of the first things people do is they reach out into this virtual world," Oculus founder Palmer Luckey said. "We wanted to create an input device that allows people to reach out."
Oculus has been working on the headset for a number of years, with development kits available since 2013. Facebook bought Oculus in a $2 billion deal in 2014.
Taking to the stage to talk about the potential for Oculus, Microsoft's Phil Spencer said the headset would unlock potential for game developers everywhere, and announced it would natively work with Windows 10.
“We believe we will be able to create state of the art VR experiences on Rift on top of Windows,” he said.
Rift owners will be able to stream Xbox One games to the Rift through Windows 10, using the same technology that will allow Windows 10 PC or tablet owners to do the same.
More details about Oculus Rift will be announced at the upcoming E3 exhibition in Los Angeles, which kicks off on June 16th.
Additional reporting: Bloomberg