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Sony Virtual Reality Headset Dubbed ‘Project Morpheus’ in Development for PS4

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Jumping ahead of rival Microsoft (NASDAQ: MSFT  ) , Sony  (NYSE: SNE  ) has announced a virtual reality headset for its its PS4 gaming console.

The device, which is available for developers but not consumers, was introduced at the Game Developer Conference in San Francisco, Geekwire reported. The prototype, dubbed Project Morpheus, was revealed on-stage during the conference by Shuhei Yoshida, president of Worldwide Studios for Sony Computer Entertaiment.

The goal of the project, Geekwire reported, is "to bring PS4 users an immersive, 3D gaming experience." The prototype has a "a 1080p screen and an audio system that can simulate 60 virtual speakers around a user. The system relies on the PlayStation Camera to track users in space, using lights on the console's Dualshock and Move controllers to identify where a user is."

The current version of Project Morpheus requires a wired connection to a PS4 and only one headset can be used at a time.

Why a virtual reality headset?

Headsets have been tried by a number of gaming companies including Nintendo (NASDAQOTH: NTDOY  ) , which disastrously released the Virtual Boy in 1995. The Virtual Boy was a pair of giant glasses that put the games right in front of the user's eyes. Unfortunately, the technology in 1995 was limited and the device had a monochrome display that caused users to become nauseous. Add in a price of $180 -- nearly as much as consoles were at the time -- and Nintendo had a major flop.

Technology has changed a lot since 1995 and a virtual reality headset may be the logical extension of the type of interaction offered by Microsoft's Kinect and Nintendo's Wii.

The idea of virtual reality has been one that Sony has long wanted to deliver, according to Yoshida.

"Nothing delivers a feeling of immersion better than VR," said Yoshida at the conference, The Verge reported. "VR has been a dream of many gamers since the computer was invented. Many of us at PlayStation have dreamed of VR and what it could mean to the gaming community."

Is there a market for a virtual reality headset?

Though there has not been a major commercial virtual reality success in the video game space, there are reasons to believe the public -- at least the gaming public -- is interested in the concept. Oculus Rift raised nearly $2.5 million on Kickstarter for what the California-based company describes as "the first truly immersive virtual reality headset for video games." 

Sony is using the success of Oculus to justify their efforts as the first of the major console players to enter the space.

"We have seen passionate people at Oculus VR and Valve introduce VR prototypes and share their learnings," said Yoshida, according to The Verge. "I have an enormous amount of respect for them. This shows how all of us as an industry can rally around a new medium like VR to push gaming forward."

Microsoft Kinect is a good comparison

When in 2010 Microsoft launched its Kinect device, which allows people to control games via movement, there was much skepticism that customers would spend $99 on it. Despite that initial skepticism Microsoft, on its "Microsoft by the Numbers," website, reports that it has sold 24 million Kinect units worldwide.

That may be less than half of the 80 million Xbox 360s the company has sold, according to the same site, but at an average retail price of $99 it's still nearly $240 million in sales.

Kinect was also successful enough for Microsoft that the company has included it in its new Xbox One, even though that is likely the reason the base model Xbox sells for $499 (with a game included) while the PS4 retails for $399. 

Virtual reality is a risk for Sony

Project Morpheus looks like it has the potential to be a game-changer -- at least for hard-core gamers. Immersive gaming is something that a smart phone or tablet can't offer and perhaps a VR headset will be the thing that entices some on-the-fence buyers into upgrading to a PS4.

For Sony, which is locked into a battle with Microsoft while it also tries to right its overall business, the move has little risk beyond the research and development expense -- at least so far. If developers take to the platform and create games that take advantage of it, it could give Sony a major advantage.

Perhaps the time for VR -- which has been coming since the mid-'90s -- has finally come. 

The next big thing

If you thought Kinect, Oculus Rift, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now ... for just a fraction of the price of Apple stock. Click here to get the full story in this eye-opening new report.

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Daniel B. Kline

Daniel B. Kline is an accomplished writer and editor who has worked for the Microsoft's Finance app and The Boston Globe, where he wrote for the paper and ran the business desk. His latest book "Worst Ideas Ever" (Skyhorse) can be purchased at bookstores everywhere.

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