According to leaked specifications, "Neo" will have faster memory, a faster processor, and a more powerful graphics chip, which will allow the console to output games at a 4K resolution. The current PlayStation 4 can output video and images at 4K, but games are limited to a 1080p resolution.
These updated components will help pre-existing games, if they're patched, and upcoming games run more smoothly. All games released from this October forward must be both "Neo" and standard PlayStation 4 compatible, according to GiantBomb. That's where the differences between "Neo" and the currently available PlayStation 4 end.
Sony has allegedly mandated that developers cannot make exclusive software for the new console, nor can they include exclusive modes within games that are "Neo" only. The console maker has also told developers that both systems will have peripheral parody, meaning any external hardware that was built for the original PS4 will work with "Neo," and any future external hardware will work with both version of the PlayStation 4.
These decisions suggest that Sony is doing everything it can not to upset any current PlayStation 4 owners, while simultaneously giving developers more power to create more expansive games. But this strategy could backfire: Having to support an additional console puts more strain on developers, while the lack of exclusive games and modes could cripple incentive for people to buy or upgrade to "Neo."
But it appears that Sony is aiming to offer VR and 4K enthusiasts the chance to upgrade if they want while ensuring owners of the original PS4 won't miss any new content.
Sony has yet to officially comment on "Neo", but given the timetable they've given developers for delivering "Neo" compatible software, an official announcement likely won't be far off.