At an event in New York City today, Microsoft announced that it has partnered with Dell, Lenovo, Acer, and HP to create a line of virtual reality headsets that will take advantage of Windows 10 VR and holographic capabilities. The headsets are meant to be affordable and will start at $299.We don’t know much about the headsets themselves, but we do know that they feature inside-out tracking sensors. What this means is that unlike the other VR headsets on the market (Oculus Rift, HTC Vive, and PlayStation VR), external cameras and laser systems won’t be needed to track the movements of a user’s head. This is similar to Oculus’ Santa Cruz prototype which also has inside-out tracking. Unlike the Santa Cruz device, Microsoft’s new headsets appear to be wired and not self-contained. However, this isn’t to say that the final versions won’t be untethered.These headsets will be compatible with the upcoming Windows 10 Creator’s update. This update will let consumers use Microsoft applications within a virtual world. This is very similar to Microsoft’s HoloLens technology, although instead of being Augmented Reality, it is Virtual Reality. At the event, we saw a 3D version of MS Paint being used in VR. The Creator’s update is set to launch next year.As of now, Microsoft has made no announcement about whether or not these VR headsets would be compatible with Project Scorpio. Microsoft has partnered with Oculus Rift (who were mysteriously absent from this event) but that doesn’t mean that it won’t also have these headsets also be compatible with next year’s next-gen(ish) console. With Sony’s PSVR priced at $400, Microsoft has the potential to undercut its competitor by making the cheaper $300 headsets work on Scorpio. It is obviously too early to say what will happen, but the possibility exists — especially since Scorpio is a Windows compatible device.