Meta Platforms (META.O) CEO Mark Zuckerberg unveiled the Quest 3, the company’s next-generation mixed reality headset, on Thursday as the business prepares for Apple to disrupt a market Meta has controlled.

Zuckerberg said on Instagram before Meta’s annual gaming conference that the $499 headset will be 40% thinner than the company’s previous headset and feature color mixed reality, blends AR/VR features. Meta also stated it would cut the prices of its Quest 2 headsets and update their performance to improve user experience.

Zuckerberg said the Quest 3’s Qualcomm chipset will double the Quest 2’s graphical performance. He promised more insights at the company’s AR/VR conference on Sept. 27.

According to Bloomberg, Zuckerberg’s revelation came less than a week before Apple (AAPL.O) launched its first high-end mixed reality device for approximately $3,000.

According to IDC, Meta’s Quest 2 and Quest Pro devices comprised approximately 80% of the 8.8 million virtual reality headsets sold in 2022.

ByteDance’s Pico gadget came in second with a 10% market share.

Despite its dominance, Meta has struggled to sell its immersive “metaverse” concept of interconnected virtual worlds and expand its device market beyond gamers.

According to Reuters, eight of the top 10 Quest Store apps were games.

The AR/VR headset market fell 54.4% year over year in the first quarter after a pandemic-related surge in interest.

In the most recent quarter, Meta’s Reality Labs revenue, which includes headset sales, fell 50%.

That puts Meta far behind the unit’s planned trajectory. In 2018, a Meta executive anticipated that the metaverse would reach 100 million hardware units within a decade, half of which would be Meta devices.

“Between now and the end of the year, there will be a slowness,” said IDC virtual reality market research manager Jitesh Ubrani. Gaming has dominated VR so far. Gaming will continue to dominate use cases.”

Sony’s PS5 console leads the game business, threatening Meta. In February, Sony released the PS VR2, a second-generation gaming headset with developer support.

Meta announced Quest 3 during its annual gaming presentation, revealing new methods to kill vampires and outwit deadly robots.

After upping the price of its entry-level Quest 2 128 GB in July 2022, Meta lowered the pricing of most of its Quest headsets in March to boost demand.

The Meta Quest Pro, launched at $1,500, now costs $1,000, while the Quest 2’s 256 GB version is $430, down from $500.

On Thursday, the business said it would decrease Quest 2 costs again starting June 4, with the entry-level gadget returning to $300 and the 256-GB version to $350.

Zuckerberg has posted videos of himself fencing with Olympic medalists and punching mixed martial arts opponents using Meta devices to attract a wider audience.

He beat U.S. antitrust officials to purchase VR fitness app Supernatural’s developer. Government lawyers showed that Meta officials had identified fitness as a method to extend VR use beyond its current fan base of largely young male gamers during the trial.

Zuckerberg partnered with Microsoft to bring Teams and Outlook to Quest headsets to sell them as virtual offices.