Google Unveils Daydream VR Ecosystem; Announces Headset and Controller at I/O

As part of an onslaught of upcoming products, Google will implant a more personable form of artificial intelligence into an Internet-connected device called Home, which echoes the Echo, Amazon's trendy smart-home speaker.

Meanwhile, Google will also delve deeper into the still-nascent realm of virtual reality with a system called Daydream that's meant to challenge Facebook-owned Oculus's early lead in fabricating artificial worlds.

Daydream is a new virtual reality ecosystem that will be made available to all comers, duplicating a strategy that worked well for Google after it fell behind Apple following the iPhone's debut nearly a decade ago.

To get the ball rolling, Google will sell a virtual-reality headset with a wireless motion controller expected to carry the Nexus brand that the company original created as a showcase for its Android operating system for smartphones. Google didn't announce the price for the VR headset at Wednesday's conference, nor did it specify when it will hit the market. A similar headset, the Gear VR, made by Samsung and powered by Facebook's Oculus subsidiary, costs $100.

Consumers will need a new smartphone to power the headset. It is going to be tethered to the "N'' version of Android that Google plans to release later this year and requires more processing power and sensors unavailable in any phone already out.

The new headset marks a major upgrade from Google's initial foray into VR in 2014, a cheap model made out of cardboard that sells for as little as $15 and is even given away in sales promotions by some companies.

"You could say Google has been the paper-based leader in VR, but otherwise you could say Google is well behind Facebook in VR," Blau said.

Google's new VR headset won't be as sophisticated as the recently released Rift from Oculus, which costs $600 and must be tethered to computers that can cost another $1,000 or so. Oculus spent several years perfecting the Rift, which features technology that looks so revolutionary that Facebook paid $2 billion to buy the startup in 2014.

Google is now part of a larger holding company known as Alphabet Inc.