CEO Mark Zuckerberg unveiled the new hardware at the Oculus Connect conference in San Jose, California, on Wednesday.
Facebook’s founder Mark Zuckerberg said the device would offer the types of VR experiences that previously required a device to be connected to a high-powered PC. It will be released in spring 2019, priced at $399.
The latest VR headset from Oculus combines the mobility of its standalone, $199 Oculus Go with some of the power of its Oculus Rift, which must be tethered to a computer to work.
The Quest has some improvements over the Go, including better position tracking through four wide-angle cameras.
At an event in San Jose, Mr Zuckerberg said he was well behind his target of getting “one billion people” using VR.
He joked to attendees that he had achieved less than 1% of that goal, which he set at this event last year.
Industry analysts have warned of declining sales of virtual reality devices.
Facebook, however, announced several content deals with the NBA, YouTube and an exclusive VR series based on the Star Wars franchise, produced by British special effects studio, ILMxLab.
The Oculus Quest works with two hand controllers, and in-built sensors mean the wearer has six degrees of freedom. That’s a term given to how much a person is able to physically move within the virtual reality world. As well as moving your head to look up and down, and turn left and right, having six degrees means it’s possible to move back and forward, as well as higher or lower. In gaming, six degrees of freedom gives the ability to, for example, lean over ledges or crouch behind objects.
Facebook said the Oculus Quest can also track the room around you, allowing you to walk around as much as 400 square feet of space – as long as there are no objects in your way.
The firm will continue to sell its PC-connected Oculus Rift, saying that device will further “push the limits of what’s possible”.