Facebook, Microsoft and HTC are now faced with heavy competition as Google has formed its own virtual reality (VR) business arm.
Alphabet’s company CEO Sundar Pichai has also appointed Clay Bavor to run the new division, according to Re/code.
Bavor was Google’s VP for product management, and supervised some of the company’s most important products including Google Docs, Drive and Gmail.
His role, in which he also oversaw Google Cardboard, will be taken by current board member SVP Diane Greene who runs Google’s cloud business.
Google, who pioneered smart glass technology but later dropped it and renamed it Aura, has not been as strong in the VR game as it is in other market segments.
With the VR market expected to break the $1 billion barrier this year, and more than 2.5 million headsets are expected to be sold, Dr. Kevin Curran, senior member of the IEEE, told CBR: "Google are one of the few companies who have a hope of making a splash in this marketplace.
"Google’s forming of a new virtual reality division makes sense. Virtual reality is the future. It is a no-brainer for those in the tech industry. Proper VR (not the poorer cheaper augmented reality devices) does what is says on the tin – it deceives us into becoming immersed in a virtual world."
The firm’s main VR launch was in 2014, when it released the Google Cardboard. The foldout cardboard piece allows users to place a smartphone inside and experience VR sets for a lower price than its competitors.
Created by David Coz and Damien Henry, the engineers’ DIY VR headset can be bought on Amazon at £10.
Last year, the company entered into a partnership with GoPro to foster 360-degree experiences with VR headsets using Google’s technology and by putting videos on YouTube to be watched on the smartphones placed into sets.
Dr Curran said: "Google’s cardboard project was actually a good idea. It provided some sort of VR experience quite cheaply for people but in some ways it does hinder the rollout as it is simply not VR as we, who have tried VR, know it to be. Proper VR, especially when complimented with extra sensors can be exhilarating.
"Ultimately, the content [for VR consumers] will come. Google will be a huge player here. They do not like to be in second place in any segment. Google VR search is just a stone’s throw away."
The VR industry is set for an uptake in 2016, as nearly all tech giants enter the game, from Samsung, to Facebook, HTC, Microsoft and now Google.
St.John Dunne, US MD of Rockpool Digital, told CBR: "Virtual reality is set to finally deliver its promise with the Oculus Rift finally being released in 2016. But arguably more interesting is the value-end Google Cardboard, and the still sensibly priced Samsung Gear VR, using the features of the smartphone to deliver VR to the mass-market. "
Google’s cheap and simple VR solution, Cardboard, has this week also proved that this market still has a lot to offer.
In Florida, doctors performed a surgery in an "inoperable" four-month-old baby’s heart using a Google Cardboard device.
Dr. Redmond Burke, from Nicklaus Children’s Hospital in Miami, agreed to operate Teegan Lexcen, born with only one lung and half a heart. The doctor explained to the NBC Today show that an operation of this type would take time and money, and require existing products that are "giant and clunky and clumsy".
As an alternative, the doctor was handed a Cardboard by a colleague. The device allowed him to view the baby’s heart, chest wall and all other relevant parts to the surgery, saving Lexcen’s life.
Dr Curran said: "VR is crucial in the future as it can simply bridge the gap between a mundane experience and a real one. We are used to browsing in 3D. VR will allow you to do the same thing, except much better."