In case you're wondering, yes, this is server based compatibility thing, as hardware was always present.
"Daydream aims to provide users with high-quality, interactive, VR experiences". That's still true and now with Daydream support, the S8 is even harder to beat. Till now, the Daydream VR support is included in the Google Pixel lineup and Moto Z first generation smartphones (only the high-end Moto Z and Z Force), Huawei Mate 9 (standard and Porsche design edition), Asus Zenfone AR, and ZTE Axon 7.More news: Google Play services is the first app to reach 5 billion downloads
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We've known Daydream support was coming since the Google IO conference in May, and today's update means Galaxy S8 and Galaxy S8 Plus owners can now use their phones to power the Google Daydream headset. Samsung Galaxy S8 and Galaxy S8+ already support Gear VR, which is powered by Facebook's Oculus. The agreement between the two companies reportedly did not allow Samsung to reach an agreement with the search engine for making the Daydream VR available on Galaxy S8 and Galaxy S8+ smartphones.
The headset is now being offered on the Daydream website for $59, which is cheaper than the unit's typical $79 price tag. Google recently announced plans to launch a standalone VR experience via headsets that won't require a phone or tethered PC to work. However, if you want to make sure that you receive the update, then simply clear the Google VR Service app's data.