In terms of raw power, go with an upgraded GPU. However, if you're buying it specifically for gaming I would personally go with the PS4 and before the PC Gaming vs Console Gaming comments start, let me explain why.
I built me a powerful PC, mostly for video editing purposes but more than enough to play most games out there and what I've found is that consoles tend to get MORE quality games than PC does and in many cases consoles get the cross platform games sooner. A great example is GTAV. Love it or hate it, we still have no idea if its actually coming to PC or not. I maintain a list of all the upcoming games that catch my eye and largely what I have are console games. If they are coming out cross platform (like The Witcher and Titanfall) I'll often get the PC version depending on what type of game it is but then there are games like Destiny, The Order, and whatever that new Halo game will be called. No PC plans.
I'll admit that this generation seems to have a lot more console games also getting PC versions. However, as I much prefer to play games with a controller, in the case of action games, I might as well use a console. Keep in mind how and what you like to play before you decide.