When Leap Motion first unveiled its gesture-based controller in May 2012, many were skeptical of its capabilities and questioned its need in the marketplace. Similarities were drawn to early smartwatches in that they didn't really serve a purpose or fill a need.

By the time its motion controller was shipping a year later, it was clear that Leap Motion would ultimately become a virtual reality accessory rather than a standalone PC accessory. The company admitted as much in August 2014 and today, it unveiled a virtual reality-minded hardware and software solution called Orion.

Orion is designed specifically for virtual reality (its sensor can even be embedded directly into headsets). Leap Motion co-founder and CEO Michael Buckwald told Engadget that untethered mobile VR solutions are most likely to adopt Orion as hands are the primary input method for such devices.

The new hardware is only half of the equation. On the software side, co-founder and CTO David Holz said they've taken what they learned over the past few years and really built something from the ground up. The result of all that hard work is that hand tracking is now massively better, we're told.

The publication vouched for Orion, noting that a new demo they tried was incredibly fast and smooth. Perhaps even more impressive is the fact that Orion can even track fingers it can't actually see – wizardry made possible by using "hints" of pixels around the knuckles to determine where the hidden fingers are located.

Even with improved tracking, gesture-based controllers like this still lack the ability to provide tactile feedback. When the goal of virtual reality is a sense of total immersion, not having that physical feedback could be a deal breaker for some.

Buckwald said Leap Motion is currently in talks with several OEMs and that we can expect to see its technology show up in select headsets by the end of the year.