Three years will have elapsed between the launch of the Oculus Rift and the expected 2019 arrival of Facebook's (NASDAQ:FB) next-generation headset, the Oculus Quest. So far, fewer than 2 million Oculus headsets have been sold, and the pace of sales seems to be slowing down rather than picking up. 

One problem is that VR tech hasn't advanced as much as you might expect in those years. Even after Quest hits the market, the Rift will still be the high-end device in the Oculus line, an unusual state of affairs in a tech industry that normally leaves 3-year-old equipment in the dust. The development of consumer-friendly virtual reality has hit its fair share of speed bumps, and Quest is certainly a step forward for the entire industry. However, it also shows the limitations VR may face for years to come. 

Oculus Quest front view.

Image source: Oculus.

Where Quest takes virtual reality

Oculus Quest's biggest advance is getting rid of the movement-limiting cords that have limited high-end VR headset users to date. Because all the hardware and software is contained within the device itself, users won't be tethered to a computer like they would be with a Rift or an HTV Vive. 

As part of that cord-free VR experience, Quest has moved the tracking hardware that "sees" where a headset and controllers are in space from sensors outside the headset to sensors built into it -- what the industry calls inside-out tracking. The headset will identify and map the real-world objects around the user, as well as determine how they are moving, in order to build the virtual world they see.

In theory, this means that Quest users will be able to move around freely, with the device able to warn them before they run into walls or coffee tables. Facebook says that Quest will enable Rift-quality experiences, implying that it will be fully immersive, not just a 360-degree video machine like the Oculus Go. However, there may be some factors holding back high-quality VR in Quest, and the inside-out tracking system could be one of them. 

Quest has some serious limitations

To be frank, there's no way a Quest headset can house the computing power of a PC today, much less at the $399 price that Facebook intends to charge. VR-quality graphics cards alone can cost more than $399, so the Quest was designed around Qualcomm's Snapdragon 835 chip. By the time the device is released, Snapdragon 835 will be over two years old, meaning Quest won't have the horsepower of an up-to-date PC, which will limit its graphics quality and even gameplay ability. 

To compensate for that, content producers likely will have to dial back their offerings for the Quest platform compared to what they deliver on a Rift or a Vive, giving users a lower quality experience. There's a reason Facebook will be keeping Rift in the lineup even after Quest is released, and it's because Rift will remain its best Oculus headset. 

The inside-out tracking feature of the Quest is also concerning when compared to the outside-in tracking of Rift or Vive. The four cameras on the headset won't capture a full 360-degree view, so if the user moves a controller behind them, the device could lose "sight" of it, leading to strange images for users. Microsoft's headsets use inside-out tracking technology, and the glitches they can produce are very noticeable in gameplay, as there are blind spots where controllers disappear from sight. Quest will need to solve that problem effectively, or consumers won't be impressed

A positive, if unimpressive, step forward

The Quest will be a significant step forward for the VR industry, both because it gets rid of clumsy wires, and because of its attractive $399 price. However, it won't be the best performing VR headset when it's launched. That could limit the device's upside, given that early adopters will already have better headsets, and new consumers may not be ready to jump into VR with both feet yet.

For now, VR will be limited by the size and power draw of the graphics chips that power the experience. Given that weakness, the Quest may be the best the VR industry can hope for right now. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.