Sony revealed its new smartphone on Thursday, the Xperia 5, which works with a wireless PlayStation controller for mobile gaming.

The Japanese tech giant's new device is a compact version of last year's Xperia 1, and comes with the same 21:9 aspect ratio screen used for watching movies. It has a 6.1-inch display, whereas the Xperia 1 came with a 6.5-inch panel.

Sony's Senior Executive Vice President Shigeki Ishizuka explained at a press conference in Berlin that users would be able to connect the Xperia 5 with a PlayStation DualShock 4 wireless controller.

Ishizuka added that the phone would work with Epic Games' popular battle royale game "Fortnite." "We are excited to see the growing trend of esports evolving to the mobile space," he said, adding that controller support would also be added to the Xperia 1.

The company said last year that it was working with Fortnite's developer and other firms to offer video game experiences in the 21:9 aspect ratio.

Sony has previously offered DualShock compatibility with its Xperia phones, but not for the Xperia 1. Sony said wireless controller support would be added to that device through a software update.

The new phone will be available in four colors — black, white, blue and magenta — and will be available in Europe in October. A spokesperson told CNBC the phone will cost £699 ($863), making it cheaper than its predecessor.