There have been plenty of PlayStation 4 console codenamed 'Neo,' but most of them boiled down to the same thing: Neo will be much more powerful than the current PS4 system. The new, more powerful PS4 has been rumored to be set for release before October 2016, which puts it close to the release of the PlayStation VR headset.
This makes sense, considering that rumors say the new PS4 will have developers making two versions of games, one high-def 60fps 'Neo' version and one 'Base' version for the current PS4.
According to an unnamed source in the latest issue (via IBTimes) of Edge Magazine, the Neo console's existence is based off of the current PS4's inability to support PSVR at a quality level.
In issue 294, the source states:
"PSVR was going to be terrible on a [launch] PS4. It was going to be truly awful. Something a bit more powerful starts to bring VR into range. If you want to deal with crazy requirements for performance in VR, you absolutely have to do this."
The use of 'was' in the statement is curious – it's as though Sony intends on making the PSVR require the new console to function or that the Neo has saved the launch of the PSVR. Hopefully the prior is not the case, if it is, Sony better offer some great trade-in deals.