The Sony Playstation 4 which is significantly outselling the Microsoft Xbox has already sold more than 36 million units world-wide with analysts tipping that a "large slice" of the Sony installed based "will most probably upgrade" to the new heavy duty model.
Existing PlayStation 4 owners would need to buy the new model to take full advantage of the enhanced graphics and power, though it is likely that the current model and the coming one would share the same gaming software, one of the people said.
According to the Wall Street Journal the new console would be announced before the planned October release of the PlayStation VR, Sony's new virtual-reality headset, the people said.
It would be able to handle ultrahigh-definition-resolution graphics. The upgraded console would also provide more power for running PlayStation VR, whose main competitors, Facebook's Oculus Rift and HTC's Vive, are designed to work with high-end computers.
News of an upgraded PlayStation console was earlier reported by website Kotaku. A spokesman at Sony Computer Entertainment, Sony's videogame division, declined to comment.
Sony's goal with the upgraded PlayStation 4 console is to capture gamers willing to pay for a richer game environment, including a high-end virtual-reality experience, the people familiar with the matter said.
Even without a beefed-up console, Sony is expected to be a leader in the VR market this year despite delaying its PlayStation VR system until October, according to Piers Harding-Rolls, an analyst at research firm IHS.
Macquarie Securities projects Sony will sell eight million PlayStation VR headsets in the product's first two years on the market, but Macquarie says it will take years before the hardware device itself becomes a considerable profit contributor. For now, the headsets will drive highly profitable software sales, Macquarie wrote in a recent research note.