The PlayStation 4 virtual reality headset Project Morpheus is shown as Richard Marks, senior director of research and development at Sony Computer Entertainment America, answers questions at the Game Developers Conference 2014 in San Francisco on March 18, 2014. Photographer: Jeff Chiu/AP Photo
The PlayStation 4 virtual reality headset Project Morpheus is shown as Richard Marks, senior director of research and development at Sony Computer Entertainment America, answers questions at the Game Developers Conference 2014 in San Francisco on March 18, 2014. Photographer: Jeff Chiu/AP Photo

Beating Microsoft in the game console race is apparently not enough for Sony. Rather than settle for being the leader in a shrinking market, it plans to revive the console with a novel take on an old technology: virtual reality.

Despite a recent boost from new-generation consoles such as Sony's PlayStation 4 and Microsoft's Xbox One, the video game industry has been stuck in a dreary decline. Sales of actual games were down 11 percent last month from a year earlier, suggesting that the software part of the industry needs a breakthrough.

Sony offered its answer at a developers' conference in San Francisco: Project Morpheus, a virtual-reality helmet for PlayStation 4 that will interact with Sony's PlayStation Move and PlayStation Camera for a full VR experience. Sony believes that transporting a gamer into fantasy worlds could be a "killer app." And indeed, the new hardware, three years in the hatching and still a prototype, could give game development a trend-changing boost.

"Nothing delivers a feeling of immersion better than VR," said Sony Worldwide Studios president Shuhei Yoshida. His words reminded me of this 1995 promotional video for a VR helmet called the VFX1, produced by a now-defunct firm called Forte Technologies. The video is worth watching for that antique computer experience and the feeling of wonder we often get when told, from the past, about the future in which we are now living.

"A built -in microphone will make immediate use of the voice recognition systems that are just around the corner," the presenter enthuses. "Soon games will be operated by more than one player simultaneously, as well as computer to computer. The add-ons will be essential. Data gloves, control vests, motion sensors -- a myriad of feedback devices will flood the market."

The predictions came true selectively. The VFX1 sold for $1,495, came with a video interface card that one needed to plug into a computer's motherboard, and gave the gamer seasickness after 15 minutes of use. All the competing devices at the time suffered from a multitude of limitations, but first and foremost they were uncomfortable to use. No wonder they did not take off. Paul Travers, who started Forte Technologies, tried for years to make a good VR helmet but then moved off in another direction: He is now chief executive of Vuzix, a company that last year marketed the M100 smart glasses, a lesser-known functional equivalent of Google Glass.

Sony claims to have a better grip on the technology. It says the helmet does not put any weight on the player's nose or cheeks, uses Sony's best achievements in video and optics and simply plugs into the PlayStation 4. Gamers will no longer feel seasick, and their eyes will not hurt from low-definition video, as they did with the first-generation VR devices. Technology has finally caught up with the pioneers' vision of VR as the ultimate gaming experience.

Sony is not the first nor the only company to pin its hopes on a VR revival. Oculus, an Irvine, California firm that raised initial funding on Kickstarter, last year showed off a headset called Rift. Microsoft is also rumored to be working in the same direction.

Sony appears to be closer to a marketable product than Microsoft and it has much more market power, including with developers, than startup Oculus. Sony has already lined up software partners, including Autodesk, Epic Games, Unity and other well-known names. The PlayStation maker, however, needs the entire game development world to get interested: The VR comeback initiative won't take off without lots of content for gamers to choose from.

There's nothing wrong with picking up discarded technologies after engineering advances make them more feasible. Apple, after all, was not shy about returning to the touchscreen after the failure of its Newton platform in the late 1990s. In the end, it's only a matter of getting the features right. Sony's audacious bet may make it more than the industry leader in consoles. It may become the industry's savior.

To contact the writer of this article: Leonid Bershidsky at lbershidsky@bloomberg.net.

To contact the editor responsible for this article: Mark Whitehouse at mwhitehouse1@bloomberg.net.