Video gamers eager to see what Microsoft (MSFT -1.41%) has lined up for its next console got fresh news on Monday. The company revealed the hardware specifications and features for its upcoming Xbox Series X console, and perhaps the most notable item in the announcement was that the device will include an AMD (AMD -4.24%) graphics processing unit that uses its latest Zen 2 and RDNA 2 architectures.

The GPU will be capable of processing at speeds of 12 teraflops, making it roughly twice as powerful as the GPU in the Xbox One X console released in 2017 -- and roughly eight times more powerful than the GPU in the original Xbox One that was launched in 2013. Microsoft also announced that the Xbox Series X would make use of variable rate shading (allowing developers to more efficiently use AMD's GPU when rendering images) and hardware-accelerated DirectX Raytracing (which will enable better lighting and other effects).

Microsoft's Xbox Series X console and a controller.

Image source: Microsoft.

What does this mean for Microsoft's next-generation Xbox?

Sony's (SONY -0.08%) PlayStation 4 trounced the Xbox One in the current console hardware cycle, so Microsoft may attempt to set its new platform apart with more powerful hardware than its rival. Both companies are set to launch new consoles at the end of this year, and early reports suggest that the Xbox Series X could be significantly more powerful than Sony's PlayStation 5. Neither has announced prices for the upcoming systems.

Microsoft has long attempted to wrest the gaming-console crown from Sony, but the company's Xbox division now views Amazon and Alphabet as its chief competitors. Microsoft's gaming strategy hinges on supporting its cloud-services business instead of simply selling console units and games, but the company has still apparently opted to outfit the next Xbox with powerful tech.