Morpheus, Sony’s virtual reality headset for PlayStation 4 will launch in early 2016, Shuhei Yoshida, president of Sony’s Worldwide Studios has announced.

The company revealed an updated version of its device, which encases the wearer’s eyes to give the sense of having bodily entered the environment rendered on its visor-like screen.

Morpheus now features an OLED display with 1080p resolution capable of generating images at 120 frames per second, twice the performance of the model unveiled at last year’s Game Developers’ Conference. There will also be less than 18 millisecond latency (the delay before a user’s head movements are represented on screen), which Yoshida claimed is indistinguishable from the way in which humans perceive the real world.

The race for a market-leading virtual reality device is now fully under way. In 2014 Facebook acquired the company behind the rival Oculus Rift headset, although the device’s final specifications and release date remain unknown.

Samsung is working with Oculus Rift on the Gear VR, a mobile, wire-free version of the hardware that works with smartphones, while Valve Software, the company behind the Steam online PC game store, has partnered with smartphone manufacturer HTC to develop its own VR headset, named the Vive. This is set to be the first major VR headset to reach consumers, with a launch date pencilled in for later this year. Valve is set to reveal more details at the Game Developer’s Conference currently taking place in San Francisco.

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Yoshida was quick to acknowledge the competition. “Over the last year we have all seen the virtual reality world explode,” he said. “Whether it’s Morpheus, Oculus Rift or Samsung Gear VR, an increasing number of people are looking at moving virtual reality from the realm of science fiction into our living rooms.”

The Sony executive claimed that the combination of Sony’s sleek headset with the “robust platform” that PlayStation 4 represents will provide the standard for game developers to target with their virtual reality video games and experiences in the future. However, many analysts believe that the HTV Vive with its backing from Valve and access to the vast Steam store of games and developers, may be in just as strong a position.

Facebook Twitter Pinterest The Project Morpheus is designed to feel light and unobtrusive on the user’s head Photograph: Sony

The Morpheus headset unveiled at the press event is apparently close to a final consumer version. The new design places the device’s weight on the top of the head so that there’s little pressure on top of face – a mild dig at Oculus Rift’s more intrusive goggle-style design. The headset is comparatively light, and the redesigned strap distributes the weight evenly for a comfortable fit. A button on the side allows users to quickly tilt the visor away from the face so that they can orientate with the room, or have a sip of water.

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At a press conference in San Francisco on Tuesday, Sony showed off a selection of new demos, developed by the company’s London studio. In one gangster-themed mini-game, named The London Heist, players used two PlayStation Move motion controllers to search environments and to shoot at enemies.

There was also a “street luge” game in which the avatar’s movement while speeding down a virtual hill is directed by subtle tilts of the head, and a bomb-disposal game dubbed Keep Talking and Nobody Explodes in which one player tries to disarm a bomb according to the instructions read out by another.

Yoshida went on to claim that the dawning era of virtual reality will represent as significant a transition as when video games moved from two-dimensional sprites to 3D representations in the mid-1990s. “VR is a new medium: the demos that we have been creating are just the beginning,” he said. “We will deliver a VR experience that pushes boundaries of play, and ignites a passion in players. Creativity is thriving in this industry.”