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Lytro tries to right itself with $50 million and new purpose: Video and VR

In a rapidly declining camera market, the company best known for its shoot-first-focus-later cameras isn't standing with stills.

Sarah Tew/CNET

Entering a dying market is rarely a good idea -- even if your product is groundbreaking.

As first reported by Re/code and confirmed by CNET, Lytro, the company known for creating the first consumer light-field camera for capturing pictures that you can refocus again and again after you've shot them, has received $50 million in new funding and will use it to finance a strategic shift to using its computational photography technologies for video and virtual-reality content.

Because of this shift, however, it will be eliminating between 25 to 50 jobs from its 130-person staff to make room for new positions to tackle these new areas.

Changing directions actually makes sense. The camera industry was struggling to begin with when Lytro launched its first camera in 2012. It certainly stood out in the stale camera market with its "shoot first, focus later" hook and better-photos-through-software features, but the camera was expensive and, well, simply not great . Plus, smartphone manufacturers started to mimic its refocus feature.

The company came back last year with the Illum, which signaled a move toward enthusiasts and professional users and away from consumer photography. Its design, features and photo quality are a big step up, as is its price: $1,600 (£950, AU$1,950).

Regardless of the new strategy, a company spokesperson said, "Lytro will continue to invest in its existing products. Lytro has delivered 11 major software updates to the Lytro Illum and plans to continue to improve it through a series of software updates and companion tools later this year."

One of these updates that arrived when the Illum shipped was the capability to animate its pictures, including transitions that can combine focus, pan, zoom, perspective, aperture and tilt. These can then be exported as a video -- as an MP4 file -- basically showing what could be possible with a Lytro video camera.

It's likely going to take significantly more processing power than the Illum has to offer, though, to get a finished product. Let's hope Lytro doesn't burn through this $50 million injection before it figures it all out.