Media Molecule is once again allowing players to let their imaginations run wild.
Dreams is described as the 'next step' in the studio's creative gameplay introduced and evolved by LittleBigPlanet and Tearaway.
In a similar manner to LittleBigPlanet's world of user-created levels, the new IP will feature a 'Dreamiverse', where players can share and explore the dreams of others.
Gamers can create characters and objects by 'sketching' using the DualShock 4's built-in motion controls.
They can then grab created characters and animate them using performance capture.
The animations were described on-stage as 'moving paintings', tying in with the game's watercolour-like art style.
No release date was given, but the title will be coming to PS4.