One of the more remarkable aspects of Nvidia's (NVDA) 2016 sales boom is that it was fueled in large part by soaring PC GPUs sales at a time when global PC shipments were declining meaningfully. Though an upgrade cycle was clearly a factor -- Nvidia's Pascal-architecture GPUs, which delivered big performance gains relative to GPUs based on the older Maxwell architecture, launched last spring -- so was a burgeoning market for high-end PC gaming hardware, as gamers old and new splurged on expensive cards that let them play the latest titles at high resolutions and frame rates.

Nvidia's latest flagship GPU launch, which arrives just a month after the company rolled out a cheaper Pascal product that had taken the market's performance crown, is a reflection of how much hardcore gamers remain willing to pay top dollar for extra horsepower. Meanwhile, the specs just revealed for Microsoft's (MSFT) revamped Xbox One reveal how much -- to AMD's (AMD) benefit -- the console industry has had to change its hardware strategy to counter a high-end PC gaming boom.

On Thursday morning, Nvidia unveiled the Titan Xp, a GPU delivering a massive 12 teraflops (Tflops) of performance. That outpaces the 10.6 Tflops provided by Nvidia's recently-launched GTX 1080 Ti, which has seen good reviews, and the 10.2 Tflops offered by the Titan X, which arrived last August. The GTX 1080, Nvidia's original Pascal-based flagship GPU, offers a "mere" 8.2 Tflops.

Though relying on the same GP102 chip Nvidia used for the 1080 Ti and Titan X, the Titan XP makes use of all 30 of the chip's streaming multiprocessors (SMs), whereas its peers use only 28 of them. It also runs more parallel-processing CUDA cores, and has more memory bandwidth. Like all other Pascal GPUs, it's made using Taiwan Semiconductor's (TSM) 16-nanometer manufacturing process.

Titan Xp graphics cards will cost a whopping $1,200. That easily surpasses the $700 charged for 1080 Ti cards, and the $500 charged (following a March price cut) for the standard 1080.

The Titan Xp and 1080 Ti put Nvidia on much better footing to deal with the pending launch of AMD's Vega-architecture GPUs, which (just as AMD's Ryzen CPUs are doing for the PC CPU market) could provide a level of high-end GPU competition that the market hasn't seen in years. And amid recent fears that desktop GPU demand is set to slow, they could help Nvidia's gaming GPU business, which grew 66% annually in the January quarter to $1.35 billion (62% of Nvidia's total revenue), maintain solid, if relatively slower, growth.

Though IDC believes global PC shipments fell 5.7% in 2016, Jon Peddie Research thinks the PC gaming hardware market grew 23% last year to $30.3 billion. Forty-three percent of those sales involved high-end hardware, and 35% mid-range gear. With sales of 4K-resolution display growing and newer games such as Gears of War 4 and Resident Evil 7: Biohazard heavily taxing all but the most powerful GPUs when run at 4K and high-quality presets, the conditions for healthy industry growth remain in place. Most big PC makers exhibiting at CES in January made sure to show off shiny new gaming desktops and/or notebooks.

None of this is lost on Microsoft and Sony, who have realized that they need to break with the console industry's tradition of launching new systems every seven to ten years if they don't want to see 4K-loving gamers ditch consoles for PCs. Sony launched its 4K gaming-capable PlayStation 4 Pro last fall, just three years after the original PS4 launched. And Microsoft has now shared technical details about a 4K-capable Xbox One, codenamed Scorpio, that will be available this holiday season.

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