HTC planted its flag in the premium virtual reality market this week at CES with its announcement of the Vive Pro, a higher-resolution version of the original Vive headset with built-in headphones and a wireless adapter for cordless play. The Vive Pro is a natural next step for HTC and its partner Valve, and the new features make perfect sense this many years into the product’s lifespan.

None of those individual features will revolutionize the VR market. But together, they could notably impact HTC’s primary competitor, the Facebook-owned Oculus.

HTC and Valve have competed with Oculus and its Rift headset pretty much since the dawn of modern VR. For the last few years, both platforms have aggressively vied for market share in the high-end space — which, so far, has catered to owners of powerful gaming PCs.

But over the years, Oculus has diversified its product lineup. It worked with Samsung to launch the cheap, phone-powered Gear VR, even before the Rift’s release. At last year’s Connect conference, the company announced a standalone Gear VR counterpart called Oculus Go, and a prototype codenamed Santa Cruz, a self-contained headset that doesn’t require external tracking.

The Vive Pro, however, raises an important question: if HTC is overwhelmingly focused on the high-end VR market, will Oculus’ multi-tier approach spread the company too thin? If Santa Cruz goes to market, Oculus will have four consumer headsets, a business strategy that at times has been difficult to parse. The Oculus Go and Gear VR are very similar, but from what we’ve seen, Santa Cruz fits nebulously between lower-end mobile VR and high-end tethered headsets like the Rift or Vive. Oculus declined to comment specifically on the Vive Pro.

Oculus isn’t positioning Santa Cruz as a successor to the Rift, but as an adjacent device that combines the Rift’s sophisticated hand and head tracking with the freedom of the standalone Go. Oculus chief Hugo Barra says users will have “very similar experiences to what they get on Rift,” but without all the cumbersome setup and restrictions of physical movement. It uses Oculus Touch-like motion controllers, but tracks motion with internal cameras, so you don’t need something like the Rift’s USB cameras or the Vive’s laser towers.

At Connect, Barra told The Verge that Oculus won’t prioritize one platform over another, and that he’s not too worried about fragmentation. He says that for now, people who want the most high-end gaming experiences can tether to a PC with the Rift, and people who want the lowest price can get the Samsung Gear VR or Oculus Go. Santa Cruz exists somewhere in the middle.

“Obviously, ultimately, we want every product that one builds in VR to enable this full freedom of movement with hand presence. That’s obviously where we’re pointing at in the future,” Barra said. “But there’s just so many amazing things that can be enabled with the mobile VR content category that we’re doubling down on that as well.”

This might be a smart, strategic long-term play, but the Vive Pro threatens to complicate it. The Vive Pro still requires a PC and those inconvenient tracking beacons, but wireless room-scale VR offers one of Santa Cruz’s key features without its performance compromise. If Oculus releases a new Rift to compete directly with the Vive, developers might have no reason to build for apps and games for a Santa Cruz-like device at all.

The Vive Pro doesn’t necessarily threaten Oculus’ overall position. “Is there a feature spec war? Always. And is HTC ahead this week? Sure,” says Brian Blau, an industry analyst with research firm Gartner. “But I don’t think that means that the competitive landscape has really changed that much. Even though HTC might be ahead right now, you have to think that Oculus will respond. By the end of the year, we might be having a conversation about the opposite situation.”

But Santa Cruz’s future is much less clear. So far, HTC has focused on pushing big high-fidelity games and industrial applications where a PC makes the most sense. The company scrapped its plans to develop a standalone Google Daydream headset, and although it announced a standalone headset called the Vive Focus, it’s only being released in China so far.

Instead, with the Vive Pro, HTC makes a convincing argument for Vive as VR gaming’s default platform. Oculus has doled out a lot of Facebook’s money for Rift-exclusive games, but if HTC makes the Vive attractive enough for high-end gaming, developers might decide that this money isn’t worth limiting their potential audience.

Oculus has a clear vision for wireless VR headsets that enable everything from gaming to film to social networking. But it hasn’t showed us a strong plan for getting there. Meanwhile, HTC’s more measured focus on PC-powered VR could push Oculus into tough choices about where to put its money and developer recruitment efforts.

“Rather than spreading themselves thin, I think it is important for Oculus to differentiate between the models they release. The collective goal is for all VR to be untethered and wireless — but after that I think the challenge is to clearly present a difference between their models at the higher end,” explains Ben Arnold, an industry analyst for market research firm NPD Group. “A big part of who wins will be determined by how compelling the content is... I believe hardware matters, but as these platforms mature, the platforms will be the draw. Consumers will decide which hardware form factor is best for them.”

Facebook has no shortage of money, and Oculus could just keep building different headsets until one platform breaks into the mainstream. No headset has won the VR platform wars yet, and we don’t know whether it will appeal primarily to gamers who are used to shelling out lots of money for hardware, or people who want lower-end headsets for video and other applications.

We also don’t know what a consumer version of Santa Cruz will look like. Oculus could end up blending its wired and wireless categories — with a version of Santa Cruz that could be optionally plugged into a PC, for example, or a Rift with a wireless adapter and inside-out tracking, which would take the Vive Pro’s added convenience one step further.

VR is a medium with big potential, and nowhere is that more clear than here at CES each and every year, where we get to see how the technology is being pushed to new and exciting ends. But right now, VR is also a very small market. Now that HTC has made its play with the Vive Pro, Oculus may have to choose between holding out for the broad market it sees on the horizon, or getting the largest possible audience right now.