Engadget reported that the Californian technology giant is building the head-mounted computer that will work independently of smartphones and desktop PCs.

It claims that this secret project, which is quietly in development, is a replacement for an Oculus Rift style project that has been axed.

Actually the project sounds more like a hybrid VR-AR setup: "While it does have a screen, it will offer features more in line with augmented reality systems than existing VR headsets."

Google is not saying anything and it does have a habit of working on things and then giving up on them. But the rumours are indicative of just how important AR and VR is becoming for the industry's major players:

It is widely viewed as the next major platform, with similar possibilities to the early days of mobile. Facebook has the Oculus Rift, Microsoft has its AR Hololens headset, and there are rumours about Apple's intentions to get into virtual reality after everyone else has done the legwork and then it will arrive and claim it has invented it.

Google was into mobile-powered VR game early with its DIY Cardboard headset, and earlier this year it announced Daydream — a virtual reality platform that, like Cardboard (but much more sophisticated), uses a smartphone as its hardware base.

Engadget claims that employees working on the secretive alternative headset have been told that Daydream is "not the company's long-term plan for virtual and augmented reality."