SAN JOSE—On stage at the annual Oculus Connect conference today, Facebook CEO Mark Zuckerberg announced a new piece of VR hardware that he hoped would provide a “sweet spot” between untracked mobile phone-powered VR like Samsung’s Gear VR and high-end tethered headsets like the Oculus Rift.

While stressing that “it’s still early,” Zuckerberg shared a short video showing a wireless headset that uses “inside-out tracking” from an internal camera to track the user’s position, without the need for an external camera or a connection to outside hardware. Zuckerberg called the computer vision necessary to get this kind of inside-out tracking “one of the toughest problems in computer science,” but said that Facebook was “making progress” on solving it, to the point where you could track the user within a millimeter.

“We have a demo, but we don’t have a product yet,” Zuckerberg said. “This is the kind of thing we believe will exist… a completely new category of virtual reality product.”