Daydream isn't a new headset, but instead a new ecosystem for Android N which VR software will be distributed through.
It works on your Android smartphone, and optimises the whole device for VR - for example, by making sure there's no delay when you turn your head around.
It won't come out until the autumn, but manufacturers like Samsung are already working away on building Daydream-ready phones.
Alongside the software, Google will be releasing some new hardware. They're making a controller, which you'll be able to use as a remote control or virtual arm within VR. In some games, you might be able to use the controller as a wand to cast spells, or a sword to kill zombies.
It's also creating a mobile-based headset, and as it did with Google Cardboard, it's making the design available to different manufacturers.
All of this will be accompanied by a new VR version of Google Play, where you'll be able to download 3D films and videos.
There's not much detail on the hardware or the software right now, but we'll see more soon.
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