Playstation 3 gamers will be able to meet, chat and share content with friends inside a 3D universe.
"It's about community, collaboration and customisation," said Sony's Phil Harrison at the Game Developers Conference, in San Francisco.
Gamers can buy furniture and clothes, while publishers and retailers are also expected to offer 3D spaces.
"We want to start a movement called Game 3.0. It's about emerging entertainment, powered by the audience at the centre of the experience."
Gamers can create avatars - online versions of themselves - and buy new clothes and create their own homes as a 3D social networking service.
Dynamic advertising - including high definition video - can be pushed into the 3D universe.
"There will be individual locations dedicated to game publishers, game developers, and titles. Over time it will extend to non-game brands. The industry is on the threshold of a new era of creativity, collaboration, communication and commerce embedded into an experience to empower games,"Mr Harrison said.
Darren Waters
Technology editor, BBC News website, San Francisco
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