Microsoft is taking a big step forward with its plan to conquer virtual reality (MSFT, FB)

Cheap VR headsets, priced at around $300, are coming to Windows 10 later this year.
Microsoft just announced those headsets will support apps and games from the Steam platform, which will greatly expand selection. Plus, Microsoft says it's working on "Halo" content for virtual reality.
The VR headsets will work with less powerful computers, potentially expanding the market.

Microsoft thinks Windows 10 could become the platform of choice for virtual reality, ensuring the operating system stays relevant for years to come.

In a move that could help make that vision a reality, the software giant on Monday is announcing that it's teaming up with with Valve — the company behind the massively popular Steam digital game store and a major player in the virtual reality industry. As part of the agreement, the super-cheap VR headsets that are designed to be used with Windows 10 PCs that are slated to hit store shelves this holiday season will be able to run VR games listed on Steam.

The deal could be a winner for all sides. For Microsoft and its hardware partners, the agreement could help them sell more headsets and Windows computers by giving buyers of the new VR gadgets a far wider selection of games to play.

Prior to this deal, Microsoft had said that the new headsets would only be able to run apps and games that are offered through its Windows Store. Unfortunately, the Windows Store has a relatively sparse selection. By contrast, Steam offers many standout VR games, including "Rick & Morty: Virtual Rick-ality," and "Star Trek: Bridge Crew." It will also soon include "Fallout 4 VR."

Meanwhile, for Valve, the deal offers an opportunity to expand the market for its VR games. Right now, the only headset that's able to play those games is HTC's Vive, a premium headset developed in conjunction with Valve to rival Facebook's Oculus Rift, but whose $599 price has limited sales.

With their sub-$300 prices, the new headsets could expand the market, bringing in new VR players. By opening up its VR games to those headsets, Valve will gets access to the new customers.

And, if that's not enough, Microsoft also says that it's bringing "experiences" based on its blockbuster "Halo" franchise into virtual reality with Windows 10 in the future.

But wait, there's more

But beyond promoting the inexpensive headsets and teaming up with Valve, Microsoft is taking another step that could broaden the market even further. The company is also announcing that the new headsets will be able to be used with computers that have integrated graphics hardware. In such computers, the graphics capabilities are typically built into the computer's main processing chip.

What's significant about the announcement is that integrated graphics processors are typically found on lower-end or mid-range PCs, and they generally struggle to handle more complex games. By contrast, Vive and Rift will only work with higher-end PCs that have what are called discrete graphics cards. Those cards are typically powerful and pricey processors that are separate from a computer's main CPU.

By designing the new headsets to work with less expensive PCs, Microsoft and its partners could open VR to consumers who would never be able to afford a Rift- or Vive-compatible PC.

Microsoft is also promising that the new headsets will be more accessible than their high-end rivals by being as close to plug-and-play as possible. Unlike Rift or Vive, which require extra cameras or sensors to track your head movements in three dimensions, the new headsets won't need any other accessories to be able to do the same thing.

HTC Vive

I had the chance last week to try "Minecraft" on a near-final version of Acer's $299 VR headset that was connected to a laptop with integrated graphics. It wasn't as immersive an experience as when the headset was connected to a more jacked-up gaming PC; the frame rate was choppier, and the refresh rate was slower. But the overall effect wasn't bad, especially for a PC close to the same caliber you'd find in many US classrooms.

I also had the chance to get some hands-on time with Microsoft's new motion controllers, which are slated to ship later this year as well. You put one in each hand, and use them to point at things in virtual reality. Triggers on the bottom of the controllers let you "grip" virtual objects. They don't feel as solidly built as Oculus' controllers but they work well.

You'll be able to buy the controllers in a bundle with Acer's headset for $399. Microsoft has not said if it will offer the controllers separately or how much it would charge for them if it does.

Rick and Morty: Virtual Rick-Ality

Ultimately, Microsoft's intent is clear. It's hoping to be the company that expands the market for VR by promoting cheap headsets that offer access to lots of games and apps, work with a wide variety of PCs, and are easy to set up. Whether Microsoft achieves that goal — with Apple, Google, and Facebook all ramping up the competition — remains to be seen.

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