I would say go with upgrading GPU. This is the first generation I can think of where the Next Gen consoles are already way behind high spec gaming PCs before they have even been released. Both will only fall behind even more much quicker, much more so than any previous gen.
Think about it this way. When the Xbox 360 was released in 2005 it had a top of the line custom GPU with features not available to PC users at the time and a tri core CPU when PCs were using single or dual core. The 360 held it's own against high spec PCs of the time and was a respected piece of tech.
Fast forward today. PS4 features a custom GPU derived from the 7870 which came out March last year. That's 20 months ago by the time the PS4 is released, a fairly long time in PC world. The CPU is far behind mid to high spec PC ones partly for cooling purposes.
The 'Next Gen' consoles will start to look long in the tooth much more quickly then 360/PS3 did. Current gens's unusually long life cycle is partly to blame for that.
