Alphabet's (GOOGL) - Get Report Google officially entered the virtual reality fray back in June 2014 with Cardboard, its simple viewer made of cardboard designed to encase a smartphone. Millions of them are now in use around the globe, considering the low $15 to $25 cost.
But now Google is getting much more serious about virtual reality.
In early November, Google launched a new $80 headset, the Daydream View, designed to work with Google's Pixel and Pixel XL smartphones, and connect to upcoming Daydream-compatible phones from Samsung (SSNLF) , HTC, ZTE, Huawei, Xiaomi, Alcatel, Asus, LG and Motorola. These phones have been designed to accurately replicate head movement (which is critical in VR). View is the first of several new headsets that will be released by Google for the Daydream platform.
Andrew Nartker, product manager of Daydream and Google VR at Google, said the company is still very committed to Cardboard as the most accessible way for people to get an introduction to VR, since it works with iOS and Android on almost every phone.
"Cardboard has inspired much of the philosophy of Daydream, being mobile, approachable and for everyone," Nartker said. "But, Daydream is very different. A lot of things add up to make the entire experience feel far more immersive."
View is comprised of a foam and fabric body (available in gray, white and red) that's extremely lightweight and rests comfortably on your head. Unlike Cardboard, which you have to hold up to your eyes, View is a true headset that allows users to immerse themselves in 360-degree video and virtual reality content for the four or five hours the Pixel phones will last. The device comes with a small remote that can be stored in the headset, allowing for intuitive controls in VR and storage in the real world.
Superdata Research expects virtual reality software and services will grow from just $513 million in revenue this year to over $18.7 billion in 2020. And mobile VR devices like Cardboard, View and Samsung Gear VR will play a key role in introducing consumers to this new technology.
Tommy Palm, a former game designer at King Digital Entertainment and CEO of developer Resolution Games, said the Daydream's motion controller adds a new level of interactivity and immersion that enables more control than you'd get with Cardboard.
"Daydream won't only be significant for gaming, but also in productivity, education and other types of entertainment," Palm said.
Stephanie Llamas, head of VR/AR strategy at SuperData, said Google likely won't see an immediate return on its VR investment.
"It's more to both cultivate relationships with promising developers and gain brand recognition in relation to VR," Llamas said. "As VR grows, they will be known as a key stakeholder, and as they grow their connections, they can produce the best content possible."
Superdata forecasts View sales will grow from over 450,000 units this year to sales of over 14 million by 2020.
Google designed its new headset specifically for longer, more comfortable use. It is a lot lighter than similar devices in market, and made from breathable fabric. Nartker said it's more like a clothing accessory than a gadget.
"With our motion controller you can really engage with the environment around you in a natural way," Nartker said. "We've also built the core software to be more performant, low latency, and optimized for Daydream-ready devices."
Google will have 50 apps available for Daydream by the end of this year, and Cardboard apps also work on the platform. Google has partnered with Warner Bros. Pictures and developer Framestore to offer a free downloadable interactive experience based on Fantastic Beasts and Where to Find Them, in which the controller acts as a spell-casting wand.
Google is signing exclusive deals with game makers to entice consumers to invest in Daydream. CCP Games' space combat shooter Gunjack 2 and Resolution Games' carnival games collection WonderGlade are two such examples.
Google has also taken popular services like YouTube, Street View, Google Photos and Google Arts & Culture and adapted them for Daydream. YouTube lets users watch any video in a more immersive way, and there are hundreds of thousands of 360-degree and VR videos available. Street View offers curated 360-degree tours from interesting places in over 70 countries. And Google Arts & Culture offers 360-degree works of art from the world's top museums.
With Sony's (SNE) - Get Report $500 PlayStation VR now available at retail alongside HTC's $800 Vive and Facebook's (FB) - Get Report $600 Oculus Rift, there are already plenty of high-end options for early adopters who want to enter more immersive VR experiences today. And Microsoft (MSFT) - Get Report has partnered with Dell, Acer, Asus, HP and Lenovo to introduce a line of $300 VR devices to the world in early 2017, which will work on lower-end PCs, further reducing the cost of investment.
Google's smartphone strategy will likely play a key role in letting gamers and everyday consumers get a first taste of the "presence" that virtual reality opens up.