These are strange days for the video game industry. Less than a decade ago, analysts were predicting the death of PC gaming, while the console market was dominated by three firms – Microsoft, Nintendo and Sony. The latter two ruled the handheld gaming market, uncontested.

Then came smartphones. And tablets. These devices, with their touchscreens and byte-sized, low-priced apps, have proven fierce competition for the handheld-gaming sector. They’re also a nascent threat to the still-not-dead PC-gaming sector.

Pity the incumbents in this struggle, such as Nintendo. Today the firm fares better than Sony in the handheld market, but its Wii U console, a technical lightweight (for its generation) which leans heavily on a touchscreen-enabled controller, is underperforming badly.

Launching in Q4 2012, Nintendo bet that consumers would be ravenous for the first new console hardware in six years. Judging by the sales figures, it was wrong. In fact, the Wii U’s startlingly poor performance has some experts questioning the future of a company that’s been in the gaming industry since freaking 1889.

This is the kind of slippery, unpredictable market that Sony and Microsoft are also trying to remain atop. Microsoft has been quiet to date, but Sony finally made its move last week.

At its first event dedicated to the predictably named PlayStation 4 (PS4), Sony made it crystal clear that “social” is key to the experience it wants to provide, as evidenced by a dedicated “share” button on the PS4 controller. The console has “always on” video compression and decompression to make uploading gameplay videos simpler, and it offers new possibilities for cooperative play.

The Dual Shock 4 Courtesy of Sony

In addition to the share button, the Dualshock 4 controller incorporates motion-detection hardware, a speaker and a small touchpad, broadening the palette for interactivity in games. Another peripheral that Sony showed off, the Playstation 4 Eye, aims to provide the same kind of motion-sensing/webcam/voice command experience as the popular Kinect hardware from Microsoft.

We didn’t actually get to see the console unit last week, but Sony announced that it is ditching the PS3’s Cell processor architecture in favor of an eight-core, x86-64 AMD chip. That’s likely to please game developers, as the Cell chip has a reputation as powerful but tricksy to program for. The AMD architecture, meanwhile, is much closer to what you find in a PC (and an Xbox), which should make multi-platform game development easier.

* All specs refer to status at launch. Most recent PS3 consoles no longer have backward compability

Truth be told, the hardware side of the PS4 is OK – sassier than the Wii U, to be sure – but hardly exhilarating. The one big surprise is the addition of a whopping 8GB of GDDR5 RAM, to be shared by system and graphics use. Compare that with the PS3, which has a meager 512MB of RAM split equally between system and graphics.

Sony also wants to make it possible to use a second screen while playing. But rather than forcing this on players, as Nintendo does with the Wii U controller, the firm will employ its Vita handheld or, smartly, let consumers use their own smartphones or tablets (via iOS or Android app). And while the move to an AMD architecture makes backward compatibility with older games a technical nightmare, the firm plans to circumvent this by streaming games via the cloud.

Finally – and most crucially for the console’s long-term health – there seems to be plenty of developer support for the PS4. Major talent like Blizzard (Diablo 3), CD Projekt RED (The Witcher 3) and Bungie (Destiny) plan to bring their games to the console.

The PS4 is expected to launch in November. Will it prove to be Sony’s salvation? Like the console itself, this remains to be seen.

Ever ruled a market, uncontested? Let us know: techeye.wbj@gmail.com