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Seems like I can't get it to work properly either, since the current projection method is dependent on the aspect ratio of the video, and the added alpha image ends up changing the aspect ratio of the video. I'll take a look into it when I have time. Maybe implementing a second video track just for alpha would actually be a better solution after all, lol.

Thanks for the update! :)

I might try not changing the aspect ratio of the video and just compositing the alpha matte in some area of the video that isn't normally seen but it'd likely be at half-res or less, but oh well, it is what it is!

 Alternatively,  i wonder if it's possible to offer support for videos that contain an alpha channel?

perhaps for videos encoded with any of these codecs that offer alpha channel support?
https://pixelbakery.com/recipes/video-image-formats

H.265, VP9 and so on..? 

Might be easier than implementing a second video track :D

I don't think the Quest's hardware decoders support alpha channels, though.

ah that's too bad! :(