The Japanese company also finally showed what its next console actually looks like today in E3 in Los Angeles, and it's remarkably similar to Microsoft's console, just more angular.
Sony also said its new flagship console would cost $549 in Australia (compared to $399 in the US) and would be available in time for Christmas.
The biggest cheer of the event came however when Sony announced the console would allow for "trading in games at retail, selling them to another friend, lending them to a friend, or keeping them forever."
Online reaction was largely positive, with social networks Twitter and Reddit featuring plenty of memes of praise and comments like 'shut up and take my money' and 'give up Microsoft.'
There are 140 games in development now for the PS4, Sony said, including 100 that should be available in the first year. Sony also announced big news that 20 first party PS4 games will be released in the first year it goes on sale, with 12 of them to be completely new IPs.
First-party games on the way include Killzone: Shadow Fall, inFamous: Second Son, Driveclub and Knack, among others.
They will all be PS4 launch titles apart from inFamous: Second Son which will be out early 2014.
More news will come as the conference continues.
PlayStation 4 Specifications
CPU: low power x86-64 AMD "Jaguar", 8 cores
GPU: 1.84 TFLOPS, AMD Radeon™ Graphics Core Next engine
Memory: GDDR5 8GB
Hard Disk Drive: Built –in
Optical Drive (Read only): BD 6xCAV, DVD 8xCAV
I/O: Super-Speed USB (USB 3.0), AUX
Communication: Ethernet, IEEE 802.11 b/g/n, Bluetooth® 2.1 (EDR)
AV output: HDMI, Analog-AV out, Digital Output (optical)