Given the age of the desktop PC, it wouldn't be so much as an upgrade but more of a rebuild.which I doubt you would be able to accomplish under $400 if you want an add-in graphics card for MMO's, which, thankfully, tend to have lower-end graphical requirements.
With your current setup, you may be be able to reuse your case (If it is a standard mid-ATX style case), optical drive, and hard drive. Both the optical drive and hard drive can be reused if they use a SATA connection, your hard drive, though salvagable, is very small and if it is original to the PC, a bit old. Consider replacing the hard drive with a new one if it is over five years old.
Here's an idea:
You're reusing a case, so I won't list one here, but I'm assuming it is a standard micro-ATX case without any kind of proprietary layout.
APU: AMD A10-6800K Richland 4.1GHz - This A10 is a higher performing part with a good graphics card built into the chip. AMD calls these CPU/GPU hybrids APU's. Depending on the MMO's you play, this may be enough for gaming at medium levels. $139
Motherboard: MSI FM2-A85XMA-E35 - AMD uses the FM2 socket with their newer APU's, this allows you to use those chips. This is a micro-ATX sized board. $74
RAM: G.SKILL Ares Series 8GB (2 x 4GB) 240-Pin DDR3 SDRAM DDR3 1866 - AMD's APU's generally perform better with faster memory. $79
Power Supply: CORSAIR CX series CX600 600W - This has more than enough power, especially if you later decide to upgrade to a dedicated add-in graphics card. $69
Operating System: Windows 8.1 64-bit OEM - To remain current with the license, you need a new copy of Windows if you are replacing the motherboard. $99
It is assumed you will be reusing the optical drive and hard drive.
Grand Total: $465
Optional Equipment (Just in case you cannot reuse)
Hard Drive: Seagate SV35 Series ST1000VX000 1TB - Just in case... $75
Optical Drive: Lite-On iHAS124-04 - A basic optical drive. $18
Graphics card: XFX Double D R9-270A-CDFC Radeon R9 270 2GB GDDR5 - If you later decide the APU's graphics are not enough. $199
Case: Antec Three Hundred - In case you need a new one. $65