The Meta Quest 3 VR headset will arrive in the autumn carrying a price tag of £500, Mark Zuckerberg revealed on Thursday.

Like the pricier Meta Quest Pro, the new headset supports mixed reality and colour passthrough. This means you’ll be able to see your surroundings in full-blown colour, compared with black and white on the older Quest 2. Plus, apps and games will be able to render their graphics on top of the outside world.

The Quest 3 packs a next-gen Snapdragon chip that will more than double the graphical performance of the Quest 2, according to Meta. Despite the leap in computing power, the new headset is 40% slimmer than its predecessor, the company said.

Meta has trimmed the fat by using “pancake optics”, which mean that the display can be physically smaller and sit closer to the lenses.

An earlier leak revealed that the new headset will not boast the face and eye tracking features available on the Quest Pro. As such, it won’t support foveated rendering, a feature that allows computing resources to be prioritised based on where you’re looking.

Meta has also redesigned the controllers that come with the Quest 3. This time round, the outer rings are gone so that they feel like “a natural extension of your hands” and take up less space, Meta said. They also borrow the TruTouch haptic feedback tech seen in the Touch Pro controllers. Hand tracking will be supported from the outset, so you can use your hands to type or interact with virtual objects.

The Meta Quest 3 will cost £500 with 128GB storage when it lands this autumn, with Meta promising an additional storage model as is the norm. Zuckerberg and co. will provide more details (and possibly even launch the device) at the Meta Connect event on September 27-28.

On the software side, Meta’s new headset will support the 500 games and apps already available on the Quest 2, along with new mixed-reality titles.

Meta previewed a bunch of new games as part of its VR gaming showcase on Thursday. The highlights included Asgard’s Wrath 2, a fantasy sequel that Meta claims can match the scope of blockbuster console and PC games. Sega is also set to release its first VR game; Samba De Amigo. Meanwhile, Ubisoft is bringing Assassin’s Creed Nexus to Meta’s headsets later this year.

There’s also good news for Meta Quest 2 owners that may not be ready to make the upgrade just yet. Meta said it will boost the 2020 headset’s computing and graphics performance by 26% and 19%, respectively, as part of an upcoming software update. The £1,000 Quest Pro is also getting an 11% bump.

The upgrade should result in smoother gameplay for the two headsets, with Meta also promising to enable Dynamic Resolution Scaling. This feature automatically adjusts the resolution a VR game is rendered in based on how much graphics power it’s sucking up.

In addition, the Meta Quest 2 price is being discounted to £300 for the 128GB model, and £350 for the 256GB version. The headsets currently cost £400 and £430, respectively, after Meta bumped up their prices last year citing a jump in manufacturing costs.

The timing of Meta’s announcements are notable. Apple is poised to unveil its mixed-reality headset on June 5 at its WWDC event. The high-end device is expected to be more of a competitor to the Quest Pro, given its rumoured $3,000 price (£2,390).

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Apple Inc. AAPL-Q is widely expected to announce a new headset that will blend video of the outside world with the virtual one at its annual software developer conference next week.

Apple chief executive Tim Cook and Meta Platforms Inc.’s META-Q CEO, Mark Zuckerberg, are jockeying to define how consumers will put to use a new generation of technology where real and digital worlds converge.

Mr. Zuckerberg has laid out a vision of the “metaverse,” a parallel digital universe where people will gather together to work and play, and has had products out for years.

Apple marketing chief Greg Joswiak, by contrast, recently called the metaverse “a word I’ll never use.” And Apple’s device so far is just a rumour. Apple’s presentations at its Worldwide Developers Conference start at 10 a.m. PDT (1700 GMT) in California on Monday. Until now, the company best known for iPhones has limited its augmented-reality efforts to technology that works on existing devices, for instance by enabling retailers’ apps to show virtual furniture in a customer’s living room.

“Meta and Apple are competing with each other. The difference is that Meta is doing it publicly, while Apple is doing it privately,” said Anshel Sag, principal analyst at Moor Insights & Strategy.

Analysts say that the Apple device, which Bloomberg has reported could cost near US$3,000 and look like a pair of ski goggles, is a placeholder of sorts. The Cupertino, California, company’s grand vision remains to produce a pair of transparent glasses that overlay digital information on the real world and can be worn all day, every day, those analysts say, but in the face of competition, it decided to launch its own goggles.

Apple declined to comment on its future plans and products.

The technology for Apple glasses remains years away, and in the meantime, Apple’s rivals such as Sony Group Corp. and Pico, which is owned by TikTok parent ByteDance, have released mixed-reality headsets that hint at what is possible by blending the real and virtual worlds. Meta Platforms this week announced its Quest 3 headset for US$500, after last year’s release of the Quest Pro, which sells for US$1,000.

Apple has been pushing augmented-reality features for its iPhones and iPads since 2017, but its mainstream uses have remained limited to mostly furniture-shopping apps and a handful of games.

Part of the reason Apple has kept its efforts private, analysts say, is that no one in Silicon Valley is quite sure how people will eventually use mixed– or augmented-reality technology, which industry insiders call “XR” for short. There is no “killer app” for the device yet.

So rather than target a mass-market price point, Apple appears to be readying a premium device that is aimed at showing software developers what is possible so they can come up with compelling apps.

“No one there believes this market is anywhere near ripe in the foreseeable future,” said Ben Bajarin, chief executive and principal analyst at Creative Strategies.

The biggest risk for Apple is putting its reputation for polished products on the line while engaging in a costly battle with Meta for dominance over a market that barely exists yet. Last year, Meta had 80 per cent of an overall market for augmented– and virtual-reality headsets that was just 8.8 million units, according to data from research firm IDC. By contrast, IDC estimates that Apple alone sold 226 million iPhones.

While Meta has products on the market, Apple has major advantages in defining the emerging field among software developers, said Jitesh Ubrani, a research manager who tracks the XR market at IDC. Apple has strong relationships with developers who want to access an installed base of 2 billion devices that spans Macs, Apple Watches, iPhones and more.

“They can leverage that ecosystem they’ve already built to keep users within their walled garden,” Ubrani said. “And Apple is in a much better position to give you an experience that works across devices than Meta is.”

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