Update March 27: Instead of getting acquired, Lytro is actually shutting down, but a few of its employees are headed to Google.

Word is that Google LLC is in the process of acquiring Lytro Inc., a startup backed by $215 million in funding that develops hardware and software for producing immersive content.

The buyout price reportedly falls well below Lytro’s last private valuation. The sources who leaked the news to TechCrunch said that Google will pay $40 million at the most, which means that the search giant is gaining potentially valuable technology for a relatively low price.

Lytro has developed a virtual reality camera system that can photograph a scene at different angles to capture the lighting conditions. Incorporating this data into a virtual or mixed-reality system can enable a much higher level of realism, which is useful for far more than just aesthetics. It also reduces the risk of the user experiencing motion sickness, one of the biggest sticking points with VR today.

The startup’s technology could potentially help Google, which has done its own experiments with light fields (pictured), bring VR step closer to mainstream adoption. Lytro’s system should be useful not only for consumer use cases but also business applications of virtual reality such as collaborative product design, which require a high level of viewability to let workers be productive.

Interestingly, Google’s reported acquisition of Lytro comes just a week after it released an app for delivering VR content with realistic lighting conditions and a set of complementary best practices. Around the same time, the company’s GV venture capital arm led a $14.5 million funding round into Blue Vision Labs Inc., an AR startup based out of London.

Google is clearly keen to land a leadership position in the AR and VR segment when it eventually takes off. Many other tech firms are participating in the race as well, including companies from the enterprise market. Last month, for instance, IBM Corp. partnered with game engine maker Unity Technologies Inc. to let developers bring its Watson artificial intelligence into virtual environments. 

Image: Google