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So I guess they are making a number of smaller games to help show off the system, rather than anything fully fledged. And one of those games is a racer.

I wonder what showing games at E3 means. I would hope/guess it means a "Hey, we have some new games to show you on Morpheus, come find us on the conference floor after the show." Rather than spending much time on the conference on this subject, can't imagine that would be the best way to sell VR.