According to Richard Marks from the Sony research and development team, the plans for the headset, known as Project Morpheus, are far beyond gaming and include partnerships with NASA and uses for immersive science.

"I have long dreamed about VR and the possibilities it brings in regards to game development. This new technology will deliver a sense of presence, where you as the player actually feel like you're inside the game and your emotions feel that much more real," SCE Worldwide Studios president Shu Yoshida said in a blog post announcing Project Morpheus.

"We believe VR will shape the future of games," said Yoshida in the post, adding that the project had been in the works for three years.

Project Morpheus is a head-mounted display with 1080p resolution and a 90 degree field of view and includes sensors built into the unit that can track head orientation and movement, and they combine with the PlayStation Camera to "accurately track head orientation and movement, so as your head rotates, the image of the virtual world rotates intuitively in real-time," Sony said.

"This is the culmination of our work for three-plus years and realizes our vision of VR for games," said Yoshida at an event at the conference, adding that his company was encouraged by the "enthusiastic response" to similar products like Oculus Rift.

The headset works in conjunction with Sony's DualShock 4 wireless controller, the PS4's primary controller, and the motion-sensing PlayStation Move wand. In addition to the immersive visuals, the VR headgear also features Sony's new 3D audio technology which "recreates stereoscopic sounds in all directions and changes in real-time depending on your head orientation," the company said.

Sony also announced it has partnerships in place with game developers Crytek and Epic, among many others. One early criticism of the Oculus Rift, which was one of the most successful Kickstarter projects in history, was that it's not compatible with a high number of games. 

According to reports on the ground some of the demos being shown at GDC include Eve Valkyrie, which is already compatible with the Oculus Rift, as well as the recent Square Enix game Thief.

The prototype will be made available to developers, but no commercial release date was given.