A video game console is a computer device that outputs a video signal or visual image to display a video game that one or more people can play.

The term "video game console" is primarily used to distinguish a console machine primarily designed for consumers to use for playing video games, in contrast to arcade machines or home computers. An arcade machine consists of a video game computer, display, game controller (joystick, buttons, etc.) and speakers housed in large or small chassis. A home computer is a personal computer designed for home use for a variety of purposes, such as bookkeeping, accessing the Internet and playing video games. While arcades and computers are generally expensive or highly "technical" devices, video game consoles were designed with affordability and accessibility to the general public in mind.

Unlike similar consumer electronics such as music players and movie players, which use industry-wide standard formats, video game consoles use proprietary formats which compete with each other for market share.^[9] There are various types of video game consoles, including home video game consoles, handheld game consoles, microconsoles and dedicated consoles. Although Ralph Baer had built working game consoles by 1966, it was nearly a decade before the Pong game made them commonplace in regular people's living rooms. Through evolution over the 1990s and 2000s, game consoles have expanded to offer additional functions such as CD players, DVD players, Blu-ray disc players, web browsers, set-top boxes and more.

Video game consoles can come in several varieties.

The first video games appeared in the 1960s.^[28] They were played on massive computers connected to vector displays, not analog televisions. Ralph H. Baer conceived the idea of a home video game in 1951. In the late 1960s, while working for Sanders Associates, Baer created a series of video game console designs. One of these designs, which gained the nickname of the 1966 "Brown Box", featured changeable game modes and was demonstrated to several TV manufacturers, ultimately leading to an agreement between Sanders Associates and Magnavox.^[29] In 1972, Magnavox released the Magnavox Odyssey, the first home video game console which could be connected to a TV set. Ralph Baer's initial design had called for a huge row of switches that would allow players to turn on and off certain components of the console (the Odyssey lacked a CPU) to create slightly different games like tennis, volleyball, hockey, and chase. Magnavox replaced the switch design with separate cartridges for each game. Although Baer had sketched up ideas for cartridges that could include new components for new games, the cartridges released by Magnavox all served the same function as the switches and allowed players to choose from the Odyssey's built-in games.

The Odyssey initially sold about 100,000 units,^[30] making it moderately successful, and it was not until Atari's arcade game Pong popularized video games that the public began to take more notice of the emerging industry. By autumn 1975, Magnavox, bowing to the popularity of Pong, canceled the Odyssey and released a scaled-down version that played only Pong and hockey, the Odyssey 100. A second, "higher end" console, the Odyssey 200, was released with the 100 and added on-screen scoring, up to four players, and a third game—Smash. Almost simultaneously released with Atari's own home Pong console through Sears, these consoles jump-started the consumer market. All three of the new consoles used simpler designs than the original Odyssey did with no board game pieces or extra cartridges. In the years that followed, the market saw many companies rushing similar consoles to market. After General Instrument released their inexpensive microchips, each containing a complete console on a single chip, many small developers began releasing consoles that looked different externally, but internally were playing exactly the same games. Most of the consoles from this era were dedicated consoles playing only the games that came with the console. These video game consoles were often just called video games because there was little reason to distinguish the two yet. While a few companies like Atari, Magnavox, and newcomer Coleco pushed the envelope, the market became flooded with simple, similar video games.

Fairchild released the Fairchild Video Entertainment System (VES) in 1976. While there had been previous game consoles that used cartridges, either the cartridges had no information and served the same function as flipping switches (the Odyssey) or the console itself was empty (Coleco Telstar) and the cartridge contained all of the game components. The VES, however, contained a programmable microprocessor so its cartridges only needed a single ROM chip to store microprocessor instructions. RCA and Atari soon released their own cartridge-based consoles, the RCA Studio II and the Atari 2600 (originally branded as the Atari Video Computer System), respectively.

The first handheld game console with interchangeable cartridges was the Microvision designed by Smith Engineering, and distributed and sold by Milton-Bradley in 1979. Crippled by a small, fragile LCD display and a very narrow selection of games, it was discontinued two years later. The Epoch Game Pocket Computer was released in Japan in 1984. The Game Pocket Computer featured an LCD screen with 75 X 64 resolution and could produce graphics at about the same level as early Atari 2600 games. The system sold very poorly, and as a result, only five games were made for it. Nintendo's Game & Watch series of dedicated game systems proved more successful. It helped to establish handheld gaming as popular and lasted until 1991. Many Game & Watch games were later re-released on Nintendo's subsequent handheld systems.

The VES continued to be sold at a profit after 1977, and both Bally (with their Home Library Computer in 1977) and Magnavox (with the Odyssey² in 1978) brought their own programmable cartridge-based consoles to the market. However, it was not until Atari released a conversion of the golden age arcade hit Space Invaders in 1980 for the Atari 2600 that the home console industry took off. Many consumers bought an Atari console so they could play Space Invaders at home. The unprecedented success of Space Invaders started the trend of console manufacturers trying to get exclusive rights to arcade titles, and the trend of advertisements for game consoles claiming to bring the arcade experience home. Throughout the early 1980s, other companies released video game consoles of their own. Many of the video game systems (e.g. ColecoVision) were technically superior to the Atari 2600, and marketed as improvements over the Atari 2600. However, Atari dominated the console market in the early 1980s.

In 1983, the video game business suffered a much more severe crash. A flood of low-quality video games by smaller companies (especially for the 2600), industry leader Atari hyping games such as E.T and a 2600 version of Pac-Man that were poorly received, and a growing number of home computer users caused consumers and retailers to lose faith in video game consoles. Most video game companies filed for bankruptcy, or moved into other industries, abandoning their game consoles. A group of employees from Mattel Electronics formed the INTV Corporation and bought the rights for the Intellivision. INTV alone continued to manufacture the Intellivision in small quantities and release new Intellivision games until 1991. All other North American game consoles were discontinued by 1984. Revenues generated by the video game industry fell by 97% during the crash.

In 1983, Nintendo released the Family Computer (or Famicom) in Japan. The Famicom supported high-resolution sprites, larger color palettes, and tiled backgrounds, which allowed Famicom games to have more detailed graphics than games of prior consoles. Nintendo began attempts to bring their Famicom to the U.S. after the video game market had crashed. In the U.S., video games were seen as a fad that had already passed. To distinguish its product from older game consoles, Nintendo released their Famicom as the Nintendo Entertainment System (NES) which used a front-loading cartridge port similar to a VCR, included a plastic "robot" (R.O.B.), and was initially advertised as a toy. The NES was the highest selling console in the history of North America and revitalized the video game market. Mario of Super Mario Bros. became a global icon starting with his NES games. Nintendo took a somewhat unusual stance with third-party developers for its console. Nintendo contractually restricted third-party developers to three NES titles per year and forbade them from developing for other video game consoles. The practice ensured Nintendo's market dominance and prevented the flood of trash titles that had helped kill the Atari, but was ruled illegal late in the console's lifecycle.^[31]

Sega's Master System was intended to compete with the NES, but never gained any significant market share in the US or Japan and was barely profitable. It fared notably better in PAL territories. In Europe and South America, the Master System competed with the NES and saw new game releases even after Sega's next-generation Mega Drive was released. In Brazil where strict importation laws and rampant piracy kept out competitors, the Master System outsold the NES by a massive margin and remained popular into the 1990s.^[32] Jack Tramiel, after buying Atari, downsizing its staff, and settling its legal disputes, attempted to bring Atari back into the home console market. Atari released a smaller, sleeker, cheaper version of their popular Atari 2600. They also released the Atari 7800, a console technologically comparable with the NES and backward compatible with the 2600. Finally, Atari repackaged its 8-bit XE home computer as the XEGS game console. The new consoles helped Atari claw its way out of debt, but failed to gain much market share from Nintendo. Atari's lack of funds meant that its consoles saw fewer releases, lower production values (both the manuals and the game labels were frequently black and white), and limited distribution. Additionally, two popular 8-bit computers, the Commodore 64 and Amstrad CPC, were repackaged as the Commodore 64 Games System and Amstrad GX4000 respectively, for entry into the console market.

In the latter part of the third generation, Nintendo introduced the Game Boy and Atari released the Atari Lynx portable game consoles, pioneering and solidifying the handheld video game industry.

NEC brought the first fourth-generation console to market with their PC Engine (or TurboGrafx16) when Hudson Soft approached them with an advanced graphics chip. Hudson had previously approached Nintendo, only to be rebuffed by a company still raking in the profits of the NES. The TurboGrafx used the unusual HuCard format to store games. The small size of these proprietary cards allowed NEC to re-release the console as a handheld game console. The PC Engine enjoyed brisk sales in Japan, but its North American counterpart, the TurboGrafx, lagged behind the competition. The console never saw an official release in Europe, but clones and North American imports were available in some markets starting in 1990. NEC advertised their console as "16-bit" to highlight its advances over the NES. This started the trend of all subsequent fourth generations consoles being advertised as 16 bit. Many people still refer to this generation as the 16-bit generation and often refer to the third generation as "8-bit".

Sega scaled down and adapted their Sega System 16 (used to power arcade hits like Altered Beast and Shinobi) into the Mega Drive (sold as the Genesis in North America) and released it with a near arcade-perfect port of Altered Beast. Sega's console met lukewarm sales in Japan, but skyrocketed to first place in PAL markets, and made major inroads in North America. Propelled by its effective "Genesis does what Nintendon't" marketing campaign, Sega capitalized on the Genesis's technological superiority over the NES, faithful ports of popular arcade games, and competitive pricing. The arcade gaming company SNK developed the high end Neo Geo MVS arcade system which used interchangeable cartridges similar to home consoles. Building on the success of the MVS, SNK repackaged the NeoGeo as the Neo Geo AES home console. Though technologically superior to the other fourth-generation consoles, the AES and its games were prohibitively expensive, which kept sales low and prevented it from expanding outside its niche market and into serious competition with Nintendo and Sega. The AES did, however, amass a dedicated cult following, allowing it to see new releases into the 2000s. Fourth generation graphics chips allowed these consoles to reproduce the art styles that were becoming popular in arcades and on home computers. These games often featured lavish background scenery, huge characters, broader color palettes, and increased emphasis on dithering and texture. Games written specifically for the NES, like Megaman, Shatterhand, and Super Mario Bros. 3 were able to work cleverly within its limitations. Ports of the increasingly detailed arcade and home computer games came up with various solutions. For example, when Capcom released Strider in the arcade they created an entirely separate Strider game for the NES that only incorporated themes and characters from the arcade.

In 1990, Nintendo finally brought their Super Famicom to market and brought it to the United States as the Super NES (SNES) a year later. Its release marginalized the TurboGrafx and the Neo Geo, but came late enough for Sega to sell several million consoles in North America and gain a strong foothold. The same year the SNES was released Sega released Sonic the Hedgehog, which spiked Genesis sales, similar to Space Invaders on the Atari. Also, by 1992 the first fully licensed NFL Football game was released: NFL Sports Talk Football '93, which was available only on the Genesis. This impact on Genesis sales and the overall interest of realistic sports games would start the trend of licensed sports games being viewed as necessary for the success of a console in the US. While Nintendo enjoyed dominance in Japan and Sega in Europe, the competition between the two was particularly fierce and close in North America. Ultimately, the SNES outsold the Genesis, but only after Sega discontinued the Genesis to focus on the next generation of consoles.

One trait that remains peculiar to the fourth generation is the huge number of exclusive games. Both Sega and Nintendo were very successful and their consoles developed massive libraries of games. Both consoles had to be programmed in assembly to get the most out of them. A game optimized for the Genesis could take advantage of its faster CPU and sound chip. A game optimized for the SNES could take advantage of its graphics and its flexible, clean sound chip. Some game series, like Castlevania, saw separate system exclusive releases rather than an attempt to port one game to disparate platforms. When compact disc (CD) technology became available midway through the fourth generation, each company attempted to integrate it into their existing consoles in different ways. NEC and Sega released CD add-ons to their consoles in the form of the TurboGrafx-CD and Sega CD, but both were only moderately successful. NEC also released the TurboDuo which combined the TurboGrafx-16 and its TurboGrafx-CD add-on (along with the RAM and BIOS upgrade from the Super System Card) into one unit. SNK released a third version of the NeoGeo, the Neo Geo CD, allowing the company to release its games on a cheaper medium than the AES's expensive cartridges, but it reached the market after Nintendo and Sega had already sold tens of millions of consoles each. Nintendo partnered with Sony to work on a CD add-on for the SNES, but the deal fell apart when they realized how much control Sony wanted. Sony would use their work with Nintendo as the basis for their PlayStation game console. While CDs became an increasingly visible part of the market, CD-reading technology was still expensive in the 1990s, limiting NEC's and Sega's add-ons' sales.

The first handheld game console released in the fourth generation was the Game Boy, on April 21, 1989. It went on to dominate handheld sales by an extremely large margin, despite featuring a low-contrast, unlit monochrome screen while all three of its leading competitors had color. Three major franchises made their debut on the Game Boy: Tetris, the Game Boy's killer application; Pokémon; and Kirby. With some design (Game Boy Pocket, Game Boy Light) and hardware (Game Boy Color) changes, it continued in production in some form until 2008, enjoying a better than 18-year run. The Atari Lynx included hardware-accelerated color graphics, a backlight, and the ability to link up to sixteen units together in an early example of network play when its competitors could only link 2 or 4 consoles (or none at all),^[33] but its comparatively short battery life (approximately 4.5 hours on a set of alkaline cells, versus 35 hours for the Game Boy), high price, and weak games library made it one of the worst-selling handheld game systems of all time, with less than 500,000 units sold.^[34][35]

The third major handheld of the fourth generation was the Game Gear. It featured graphics capabilities roughly comparable to the Master System (better colours, but lower resolution), a ready made games library by using the "Master-Gear" adapter to play cartridges from the older console, and the opportunity to be converted into a portable TV using a cheap tuner adaptor, but it also suffered some of the same shortcomings as the Lynx. While it sold more than twenty times as many units as the Lynx, its bulky design - slightly larger than even the original Game Boy; relatively poor battery life - only a little better than the Lynx; and later arrival in the marketplace - competing for sales amongst the remaining buyers who didn't already have a Game Boy - hampered its overall popularity despite being more closely competitive to the Nintendo in terms of price and breadth of software library.^[36] Sega eventually retired the Game Gear in 1997, a year before Nintendo released the first examples of the Game Boy Color, to focus on the Nomad and non-portable console products. Other handheld consoles released during the fourth generation included the TurboExpress, a handheld version of the TurboGrafx-16 released by NEC in 1990, and the Game Boy Pocket, an improved model of the Game Boy released about two years before the debut of the Game Boy Color. While the TurboExpress was another early pioneer of color handheld gaming technology and had the added benefit of using the same game cartridges or 'HuCards' as the TurboGrafx16, it had even worse battery life than the Lynx and Game Gear - about three hours on six contemporary AA batteries - selling only 1.5 million units.^[35]

During this time home computers gained greater prominence as a way of playing video games. The gaming console industry nonetheless continued to thrive alongside home computers, due to the advantages of much lower prices, easier portability, circuitry specifically dedicated towards gaming, the ability to be played on a television set (which PCs of the time could not do in most cases), and intensive first party software support from manufacturers who were essentially banking their entire future on their consoles.^[37]

The first fifth-generation consoles were the Amiga CD32, 3DO and the Atari Jaguar. Although all three consoles were more powerful than the fourth generation systems, none of them would become serious threats to Sega or Nintendo. The 3DO initially generated a great deal of hype in part because of a licensing scheme where 3DO licensed the manufacturing of its console out to third parties, similar to VCR or DVD players. However, unlike its competitors who could sell their consoles at a loss, all 3DO manufacturers had to sell for profit. The Jaguar had three processors and no C libraries to help developers cope with it. Atari was ineffective at courting third parties and many of their first party games were poorly received. Many of the Jaguar's games used mainly the slowest (but most familiar) of the console's processors, resulting in titles that could easily have been released on the SNES or Genesis.

To compete with emerging next gen consoles, Nintendo released Donkey Kong Country which could display a wide range of tones (something common in fifth-generation games) by limiting the number of hues onscreen, and Star Fox which used an extra chip inside of the cartridge to display polygon graphics. Sega followed suit, releasing Vectorman and Virtua Racing (the latter of which used the Sega Virtua Processor). Sega also released the 32X, an add-on for the Genesis, while their Sega Saturn was still in development. Despite public statements from Sega claiming that they would continue to support the Genesis/32X throughout the next generation, Sega Enterprises forced Sega of America to abandon the 32X. The 32X's brief and confusing existence damaged public perception of the coming Saturn and Sega as a whole.

While the fourth generation had seen NEC's TurboGrafx-CD and Sega's Sega CD add-ons, it was not until the fifth generation that CD-based consoles and games began to seriously compete with cartridges. CD-ROMs were significantly cheaper to manufacture and distribute than cartridges were, and gave developers room to add cinematic cut-scenes, pre-recorded soundtracks, and voice acting that made more serious storytelling possible. NEC had been developing a successor to the TurboGrafx-16 as early as 1990, and presented a prototype, dubbed the "Iron Man," to developers in 1992, but shelved the project as the CD-ROM² System managed to extend the console's market viability in Japan into the mid-90s. When sales started to dry up, NEC rushed its old project to the market. The PC-FX, a CD-based, 32-bit console, had highly advanced, detailed 2D graphics capabilities, and better full-motion video than any other system on the market. It was, however, incapable of handling 3D graphics, forfeiting its chances at seriously competing with Sony and Sega. The console was limited to a niche market of dating sims and visual novels in Japan, and never saw release in Western markets.

After the abortive 32X, Sega entered the fifth generation with the Saturn. Sega released several highly regarded titles for the Saturn, but a series of bad decisions alienated many developers and retailers. While the Saturn was technologically advanced, it was also complex, difficult, and unintuitive to write games for. In particular, programming 3D graphics that could compete with those on Nintendo and Sony's consoles proved exceptionally difficult for third-party developers. Because the Saturn used quadrilaterals, rather than triangles, as its basic polygon, cross platform games had to be completely rewritten to see a Saturn port. The Saturn was also a victim of internal politics at Sega. While the Saturn sold comparably well in Japan, Sega's branches in North America and Europe refused to license localizations of many popular Japanese titles, holding they were ill-suited to Western markets. First-party hits like Sakura Taisen never saw Western releases, while several third-party titles released on both PlayStation and Saturn in Japan, like Grandia and Castlevania: Symphony of the Night, were released in North America and Europe as PlayStation exclusives.

Born from a failed attempt to create a console with Nintendo, Sony's PlayStation would not only dominate its generation but become the first console to sell over 100 million units by expanding the video game market. Sony actively courted third parties and provided them with convenient c libraries to write their games. Sony had built the console from the start as a 3D, disc-based system, and emphasized its 3D graphics that would come to be viewed as the future of gaming. The PlayStation's CD technology won over several developers who had been releasing titles for Nintendo and Sega's fourth generation consoles, such as Konami, Namco, Capcom, and Square. CDs were far cheaper to manufacture and distribute than cartridges were, meaning developers could release larger batches of games at higher profit margins; Nintendo's console, on the other hand, used cartridges, unwittingly keeping third-party developers away. The PlayStation's internal architecture was simpler and more intuitive to program for, giving the console an edge over Sega's Saturn.

Nintendo was the last to release a fifth generation console with their Nintendo 64, and when they finally released their console in North America, it came with only two launch titles. Partly to curb piracy and partly as a result of Nintendo's failed disc projects with Sony (as SNES-CD) and Philips, Nintendo used cartridges for their console. The higher cost of cartridges drove many third party developers to the PlayStation. The Nintendo 64 could handle 3D polygons better than any console released before it, but its games often lacked the cut-scenes, soundtracks, and voice-overs that became standard on PlayStation discs. Nintendo released several highly acclaimed titles, such as Super Mario 64, The Legend of Zelda: Ocarina of Time and GoldenEye 007. The Nintendo 64 was able to sell tens of millions of units on the strength of first-party titles alone, but its constant struggles against Sony would make the Nintendo 64 the last home console to use cartridges as a medium for game distribution until the Nintendo Switch in 2017.

For handheld game consoles, the fifth generation began with the release of the Virtual Boy on July 21, 1995.^[38] Nintendo extensively advertised the Virtual Boy, and claimed to have spent US$25 million on early promotional activities.^[39] The Virtual Boy was discontinued in late 1995 in Japan and in early 1996 in North America. Nintendo discontinued the system without fanfare, avoiding an official press release.^[39] Taken as a whole, the marketing campaign was commonly thought of as a failure.^[40] The Virtual Boy was overwhelmingly panned by critics and was a commercial failure.^[41] The Virtual Boy failed for a number of reasons, among them "its high price, the discomfort caused by play [...] and what was widely judged to have been a poorly handled marketing campaign."^[40]

The Nomad was released in October 1995 in North America only.^[42][43] The release was five years into the market span of the Genesis, with an existing library of more than 500 Genesis games. According to former Sega of America research and development head Joe Miller, the Nomad was not intended to be the Game Gear's replacement and believes that there was little planning from Sega of Japan for the new handheld.^[44] Sega was supporting five different consoles: Saturn, Genesis, Game Gear, Pico, and the Master System, as well as the Sega CD and 32X add-ons. In Japan, the Mega Drive had never been successful and the Saturn was more successful than Sony's PlayStation, so Sega Enterprises CEO Hayao Nakayama decided to focus on the Saturn.^[45] By 1999, the Nomad was being sold at less than a third of its original price.^[46]

Meanwhile, the commercial failure of the Virtual Boy reportedly did little to alter Nintendo's development approach and focus on innovation.^[39] According to Game Over, Nintendo laid blame for the machine's faults directly on its creator, Gunpei Yokoi.^[47] The commercial failure of the Virtual Boy was said by members of the video game press to be a contributing factor to Yokoi's withdrawal from Nintendo, although he had planned to retire years prior and finished another more successful project for the company, the Game Boy Pocket, which was released shortly before his departure.^[48]

In 1996, Nintendo released the Game Boy Pocket: a smaller, lighter unit that required fewer batteries. It has space for two AAA batteries, which provide approximately 10 hours of game play.^[49] Although, like its predecessor, the Game Boy Pocket has no backlight to allow play in a darkened area, it did notably improve visibility and pixel response-time (mostly eliminating ghosting).^[50] The Game Boy Pocket was not a new software platform and played the same software as the original Game Boy model.^[51]

First released in Japan on October 21, 1998, the Game Boy Color (abbreviated as GBC) added a (slightly smaller) color screen to a form factor similar in size to the Game Boy Pocket. It also has double the processor speed, three times as much memory,^[52] and an infrared communications port. Technologically, it was likened to the 8-bit NES video game console from the 1980s although the Game Boy Color has a much larger color palette (56 simultaneous colors out of 32,768 possible) which had some classical NES ports and newer titles. It comes in seven different colors; Clear purple, purple, red, blue, green, yellow and silver for the Pokémon edition. Like the Game Boy Light, the Game Boy Color takes on two AA batteries. It was the final handheld to have 8-bit graphics.

Despite of Nintendo's domination of handheld console market, some competing consoles such as Neo Geo Pocket, WonderSwan, Neo Geo Pocket Color, WonderSwan Color appeared in late 90s and discontinued several years later after their appearance in handheld console market.

The sixth generation witnessed a shift towards using DVDs for video game media. This brought games that were both longer and more visually appealing. Adding furthermore features with online console gaming and implementing both flash and hard drive storage for game data.

During the sixth generation era, the handheld game console market expanded with the introduction of new devices from many different manufacturers. Nintendo maintained its dominant share of the handheld market with the release in 2001 of the Game Boy Advance, which featured many upgrades and new features over the Game Boy. Two redesigns of this system followed, the Game Boy Advance SP in 2003 and the Game Boy Micro in 2005. Also introduced were the Neo Geo Pocket Color in 1998 and Bandai's WonderSwan Color, launched in Japan in 1999. South Korean company Game Park introduced its GP32 handheld in 2001, and with it came the dawn of open source handheld consoles. The Game Boy Advance line of handhelds has sold 81.51 million units worldwide as of September 30, 2010.^[55]

A major new addition to the market was the trend for corporations to include a large number of "non-gaming" features into their handheld consoles, including cell phones, MP3 players, portable movie players, and PDA-like features. The handheld that started this trend was Nokia's N-Gage, which was released in 2003 and doubled primarily as a mobile phone. It went through a redesign in 2004 and was renamed the N-Gage QD. A second handheld, the Zodiac from Tapwave, was released in 2004; based on the Palm OS, it offered specialized gaming-oriented video and sound capabilities, but it had an unwieldy development kit due to the underlying Palm OS foundation. With more and more PDAs arriving during the previous generation, the difference between consumer electronics and traditional computing began to blur and cheap console technology grew as a result. It was said of PDAs that they were "the computers of handheld gaming" because of their multi-purpose capabilities and the increasingly powerful computer hardware that resided within them. This capability existed to move gaming beyond the last generation's 16-bit limitations; however, PDAs were still geared towards the typical businessman and lacked new, affordable software franchises to compete with dedicated handheld gaming consoles.

Video game consoles had become an important part of the global IT infrastructure. It is estimated that video game consoles represented 25% of the world's general-purpose computational power in the year 2007.^[56]

The features introduced in this generation include the support of new disc formats: Blu-ray Disc, utilized by the PlayStation 3, and HD DVD supported by the Xbox 360 via an optional $200 external accessory addition, that was later discontinued as the format war closed. Another new technology is the use of motion as input, and IR tracking (as implemented on the Wii). Also, all seventh generation consoles support wireless controllers. This generation also introduced the Nintendo DS, and the Nintendo DSi, which brought touchscreens into the mainstream for and added cameras to portable gaming.

For handheld game consoles, the seventh generation began with the release of the Nintendo DS on November 21, 2004. This handheld was based on a design fundamentally different from the Game Boy and other handheld video game systems. The Nintendo DS offered new modes of input over previous generations such as a touch screen, the ability to connect wirelessly using IEEE 802.11b, as well as a microphone to speak to in-game NPCs.^[59] On December 12, 2004, Sony released its first handheld, PlayStation Portable (PSP). The PlayStation Portable was marketed at launch to an above 25-year-old^[60] or "core gamer" market,^[61] while the Nintendo DS proved to be popular with both core gamers and new customers.^[62] Nokia revived its N-Gage platform in the form of a service for selected S60 devices. This new service launched on April 3, 2008.^[63] Other less-popular handheld systems released during this generation include the Gizmondo (launched on March 19, 2005 and discontinued in February 2006) and the GP2X (launched on November 10, 2005 and discontinued in August 2008). The GP2X Wiz, Pandora, and Gizmondo 2 were scheduled for release in 2009. Another aspect of the seventh generation was the beginning of direct competition between dedicated handheld gaming devices, and increasingly powerful PDA/cell phone devices such as the iPhone and iPod Touch, and the latter being aggressively marketed for gaming purposes. Simple games such as Tetris and Solitaire had existed for PDA devices since their introduction, but by 2009 PDAs and phones had grown sufficiently powerful to where complex graphical games could be implemented, with the advantage of distribution over wireless broadband.

Aside from the usual hardware enhancements, consoles of the eighth generation focus on further integration with other media and increased connectivity.^[66] The Wii U introduced a controller/tablet hybrid whose features include the possibility of augmented reality in gaming.^[67] The PlayStation 4 is Sony's eighth generation console, featuring a "share" button to stream video game content between devices, released on November 15, 2013. Microsoft released their next generation console, the Xbox One, on November 22, 2013.^[68] On March 3, 2017, following poor sales of the Wii U, Nintendo released the Nintendo Switch, a 'hybrid' console consisting of a tablet with controller attachments that can be used as a mobile device or connected to a television via a dock.

Game systems in the eighth generation also faced increasing competition from mobile device platforms such as Apple's iOS and Google's Android operating systems. Smartphone ownership was estimated to reach roughly a quarter of the world's population by the end of 2014.^[69] The proliferation of low-cost games for these devices, such as Angry Birds with over 2 billion downloads worldwide,^[70] presents a new challenge to classic video game systems. Microconsoles, cheaper stand-alone devices designed to play games from previously established platforms, also increased options for consumers. Many of these projects were spurred on by the use of new crowdfunding techniques through sites such as Kickstarter. Notable competitors include the GamePop, OUYA, GameStick Android-based systems, the PlayStation TV, the NVIDIA SHIELD and Steam Machines.^[71]

Despite the increased competition, the sales for major console manufacturers featured strong starts. The PlayStation 4 sold 1 million consoles within 24 hours in 2 countries, whilst the Xbox One sold 1 million consoles within 24 hours in 13 countries.^[72]

As of July 22, 2018, over 80 million PlayStation 4 consoles have been sold worldwide,^[73] and 10 million Xbox One units have shipped to retailers (by the end of 2014),^[74] both outpacing sales of their seventh generation systems. In contrast, the Wii U was a commercial failure and ceased production in January 2017, having sold only 13.56 million units after four years on the market.^[75][76] The Nintendo Switch sold 2.74 million in its first month, making it the strongest hardware launch in the history of the company, and surpassed the Wii U by the end of 2017.^[77]

Game cartridges consist of a printed circuit board housed inside of a plastic casing, with a connector allowing the device to interface with the console. The circuit board can contain a wide variety of components. All cartridge games contain at the minimum, read only memory with the software written on it. Many cartridges also carry components that increase the original console's power, such as extra RAM or a coprocessor. Components can also be added to extend the original hardware's functionality^[89] (such as gyroscopes, rumble packs, tilt-sensors, light sensors, etc.); this is more common on handheld consoles where the user does not interact with the game through a separate video game controller.^[90] Cartridges were the first external media to be used with home consoles and remained the most common until continued improvements in capacity in 1995 (the Nintendo 64, released in 1996, was the last mainstream game console to use cartridges).^[91] Nevertheless, the relatively high manufacturing costs and limited data capacity compared to optical media at the time saw them completely replaced by the latter for home consoles by the early 21st century, although they are still in use in some handheld video game consoles and in the Nintendo Switch. Due to the aforementioned capabilities of cartridges such as more memory and coprocessors, those factors make it harder to reverse engineer consoles to be used on emulators.

Several consoles such as the Master System and the TurboGrafx-16 have used different types of smart cards as an external medium. These cards function similar to simple cartridges. Information is stored on a chip that is housed in plastic. Cards are more compact and simpler than cartridges, though. This makes them cheaper to produce and smaller, but limits what can be done with them. Cards cannot hold extra components, and common cartridge techniques like bank switching (a technique used to create very large games) were impossible to miniaturize into a card in the late 1980s.^[92][93] Compact Discs reduced much of the need for cards. Optical Discs can hold more information than cards, and are cheaper to produce. The Nintendo GameCube and the PlayStation 2 use memory cards for storage, but the PlayStation Vita, Nintendo 3DS, and Nintendo Switch are currently the only modern systems to use cards for game distribution. Nintendo has long used cartridges with their Game Boy line of hand held consoles because of their durability, small size, stability (not shaking and vibrating the handheld when it is in use), and low battery consumption. Nintendo switched to cards starting with the DS, because advances in memory technology made putting extra memory on the cartridge unnecessary.^[94] The PlayStation Vita uses Sony's own proprietary flash-memory Vita cards as one method of game distribution.^[95]

Home computers have long used magnetic storage devices. Both tape drives and floppy disk drives were common on early microcomputers. Their popularity is in large part because a tape drive or disk drive can write to any material it can read. However, magnetic media is volatile and can be more easily damaged than game cartridges or optical discs.^[96] Among the first consoles to use magnetic media were the Bally Astrocade and APF-M1000, both of which could use cassette tapes through expansions. In Bally's case, this allowed the console to see new game development even after Bally dropped support for it. While magnetic media remained limited in use as a primary form of distribution, three popular subsequent consoles also had expansions available to allow them to use this format. The Starpath Supercharger can load Atari 2600 games from audio cassettes; Starpath used it to cheaply distribute their own games from 1982 to 1984 and today it is used by many programmers to test, distribute, and play homebrew software. The Disk System, a floppy disk-reading add-on to the Famicom (as the NES was known in Japan), was released by Nintendo in 1986 for the Japanese market. Nintendo sold the disks cheaply and sold vending machines where customers could have new games written to their disks up to 500 times.^[97] In 1999, Nintendo released another Japan-only floppy disk add-on, the Nintendo 64DD, for the Nintendo 64.

In the mid-1990s, various manufacturers shifted to optical media, specifically CD-ROM, for games. Although they were slower at loading game data than the cartridges available at that time, they were significantly cheaper to manufacture and had a larger capacity than the existing cartridge technology. NEC released the first CD-based gaming system, the TurboGrafx-CD (an add-on for the TurboGrafx-16), in December 4, 1988 in Japan and August 1, 1990 in the United States. Sega followed suit with the Sega CD (an add-on for the Sega Genesis) in Japan on December 12, 1991; Commodore stepped into the ring shortly after with the Amiga-CD32, the first 32-bit game console, on September 17, 1993. During the later half of the 1990s, optical media began to supplant cartridges due to their greater storage capacity and cheaper manufacturing costs, with the CD-based PlayStation significantly outpacing the cartridge-based Nintendo 64 in terms of sales. By the early 21st century, all of the major home consoles used optical media, usually DVD-ROM or similar discs, which are widely replacing CD-ROM for data storage. The PlayStation 3, PlayStation 4, and Xbox One systems use even higher-capacity Blu-ray optical discs for games and movies, while the Xbox 360 formerly used HD DVDs in the form of an external USB player add-on for video playback before it was discontinued. However, Microsoft still supports those who bought the accessory. Nintendo's GameCube, Wii, and Wii U, meanwhile, use proprietary disc formats based on then-current industry standard discs—the GameCube's discs are based on mini-DVDs, the Wii's on DVDs and the Wii U's are believed to be based on Blu-rays. These discs offer somewhat smaller storage capacities compared to the formats they are based on, though the difference is significantly smaller compared to the gap between the N64's cartridges and CDs.

All seventh and eighth generation consoles offer some kind of Internet games distribution service, allowing users to download games for a fee onto some form of non-volatile storage, typically a hard disk or flash memory. Recently, the console manufacturers have been taking advantage of internet distribution with games, video streaming services like Netflix, Hulu Plus and film trailers being available.

Each new generation of console hardware made use of the rapid development of processing technology. Newer machines could output a greater range of colors, more sprites, and introduced graphical technologies such as scaling, and vector graphics. One way console makers marketed these advances to consumers was through the measurement of "bits". The TurboGrafx-16, Genesis, and Super NES were among the first consoles to advertise the fact that they contained 16-bit processors. This fourth generation of console hardware was often referred to as the 16-bit era and the previous generation as the 8-bit. The bit-value of a console referred to the word length of a console's processor (although the value was sometimes misused, for example, the TurboGrafx 16 had only an 8-bit CPU, and the Genesis/Mega Drive had the 16/32-bit Motorola 68000, but both had a 16-bit dedicated graphics processor). As the graphical performance of console hardware is dependent on many factors, using bits was a crude way to gauge a console's overall ability. For example, the NES, Commodore 64, Apple II, and Atari 2600 all used a very similar 8-bit CPU. The difference in their processing power is due to other causes. For example, the Commodore 64 contains 64 kilobytes of RAM and the Atari 2600 has much less at 128 bytes of RAM. The jump from 8-bit machines to 16-bit machines to 32-bit machines made a noticeable difference in performance, so consoles from certain generations are frequently referred to as 8-bit or 16-bit consoles. However, the "bits" in a console are no longer a major factor in their performance. The Nintendo 64, for example, has been outpaced by several 32-bit machines.^[99] Aside from some "128 Bit" advertising slogans at the beginning of the sixth generation, marketing with bits largely stopped after the fifth generation.