Confirmed at the PS4 event in New York, the console will support new business models such as free-to-play and will launch during the 2013 end of year holiday season.
Compared to a "supercharged PC", the PS4 features an x86 CPU, enhanced PC GPU and 8GB RAM, and will be easier to develop for than the PS3.
The DualShock 4 controller, which was leaked before the event, appears similar in design to the standard PS3 controller, except for a touch pad, share button, and light bar that acts like a PlayStation Move.
There is also a new Light Bar accessory that tracks the controller.
> Sony's PS4 reveal as it happened
Gallery: The PS4's logo, DualShock 4 controller and camera in pictures:
Copyright: Sony Computer EntertainmentUsers will be able to play digital games instantly, with the system streaming titles while they download in the background.
It features a sleep button similar to the Vita, allowing players to halt and instantly resume games later, as well as smartphone cross-functionality.
The share button allows users to instantly post images, videos and activate live streams of games, with friends able to post comments and offer feedback while you play.
Players can also hand the controls over to a spectator, letting them take over if stuck during a challenging section.
Using Gaikai cloud technology, users will also be able to play PS4 games remotely using Vita, similar to using the Wii U GamePad.
> Read our on-going coverage on PlayStation 4
New first-party games include Killzone Shadow Fall, Infamous: Second Son and DriveClub.
Square Enix announced a new Final Fantasy, which will be unveiled at E3, Ubisoft confirmed Watch Dogs for launch, Capcom teased a new game called Deep Down and Braid creator Jonathan Blow announced The Witness.
Blizzard, meanwhile, announced Diablo 3 for the PS3 and PS4, while Bungie revealed that the PS4 version of Destiny will feature exclusive content.