Video game designer Mark Cerny talks about the new controler Bioshock 4 as Sony introduces the PlayStation 4 / Getty Images

System has greater online and social media connectivity to compete with Xbox and Nintendo's market-leading Wii

Sony fired the first shot in the next round of the console wars last night, previewing a powerful new version of its Playstation system with greater online and social media connectivity that is meant to drive sales back up as it competes with Microsoft’s Xbox and Nintendo’s market-leading Wii. 

With technology to stream games over the internet, built-in connectivity with Facebook and greater integration with tablets and smartphones, Sony made a pitch to reclaim lost market share and counter growing competition from rival video game systems and mobile devices.

The new Playstation 4 system was previewed at a much-hyped event in New York. Anticipation ahead of the presentation was such that the queue outside the Hammerstein ballroom in the Manhattan Center Studios, the launch venue, stretched down the block as technology journalists and bloggers headed to a get first look at the new device, which is expected to go on sale later this year.

Among the new features, including beefed up graphics, is a new controller with a button that allows players to share video game clips and give friends the to ability to watch each other progress through games. Playstation 4 puts an emphasis on cloud-computing, where instead of relying on physical copies, users can access new games and other content, including Netflix TV shows and digital movie rentals from Amazon, over the internet. A precursor to this was Sony’s July 2012 purchase of Gaikai, which is focused on cloud-based gaming technology.

Last night, Gaikai’s chief executive, David Perry, was among the speakers at the New York event, unveiling plans to build what he billed as the world’s fastest gaming network which will serve as the backbone for the new Playstation platform unveiled last night. The network will also be able to stream Playstation 4 games to Sony’s handheld Vita device.

With the announcement, Sony stole a march on Microsoft, which is reported to be working on a new version of its Xbox console, the Xbox 720. Thus far, the Playstation 3, which is over seven years old, an age in the tech sector, has failed to pull ahead of rival devices from Microsoft and Nintendo. In terms of sales, it is neck-and-neck with the Xbox 360, and a good distance behind the best-selling Wii from Nintendo. This contrasts with the Playstation 2’s record as the best-selling video game console ever.

By confirming the launch of the Playstation 4 before Microsoft debuts the new Xbox and after what was widely seen as a lackluster launch for the Wii U, the latest avatar of the Wii, Sony is hoping to regain the momentum and, when the device goes on sale, reclaim the gaming crown it once commanded with the Playstation 2.

Much still remains to be seen, however, with the company offering no detail on the exact launch date or the price of the new device.