The Japanese company says it can hold up to 148 gigabits per square inch.
Sony has developed a cassette tape that can store a whopping 185 terabytes (TB) of data, which is about 74 times the capacity of tapes being used today.
The tapes, which were developed in collaboration with IBM, claim to have an a real recording density of 148 gigabits per square inch, which is equivalent of about 3700 Blu-ray discs.
The Japanese firm announced the technology at the INTERMAG Europe 2014 international magnetics conference being held this week in Dresden.
The storage is made possible via a vacuum forming technique called sputter deposition which generates multiple layers of crystals with a uniform orientation on a polymer film.
The sputter method, which has thickness of less than 5 micrometers, is a form of thin film deposition in which electrostatic discharge is used to force argon (Ar) ions to collide with the material (target).
Sony, in a statement, said: "Until now, when the sputter method was used to deposit a thin film of fine magnetic particles on a polymer film, roughness on the surface of the soft magnetic underlayer caused the orientation of the crystals in the underlayer above it to become non-uniform.
"This in turn caused non-uniform crystalline orientation and variations in the size of the magnetic particles (grain) in the nano-grained magnetic layer directly above the underlayer, and prevented increases in recording densities."
Sony and Panasonic earlier jointly announced a new optical disc standard that stores ten times the amount of data as a Blu-Ray disc.
The new 'Archival Disc' can hold up to 300GB data, say the firms, which they hope will expand the market for long-term data storage.
The emergence of wireless technologies, smart products and software-defined businesses is having a staggering effect on the volume of the world's data.
Known as the Internet of Things, the digital universe is doubling in size every two years and will multiply 10-fold between 2013 and 2020 - from 4.4 trillion gigabytes to 44 trillion gigabytes.