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The first Video Game Console to ever be released occured in 1972 by Magnavox, which had been invented by Ralph H. Baer. It was called "The Odyssey" and wasn't really all that successful. It wasn't until 1975 that a company called Atari created a successful arcade game called "Pong" that Magnavox had rescaled their Odyssey to the new Odyssey 100, where it would play only two games, Pong and Hockey. Sales eventually rose and soon the market was flooded with other video game consoles that played only pong-derived games.
In 1976, second generation Video Game Consoles occured with the Fairchild Video Entertainment System (VES). It was the first video game console to contain a microprocessor which was programmable, therefore its cartridges relied only upon one ROM chip to function. Soon after, both RCA and Atari caught on and released their own cartridge-based systems. But by mid 1977, much was to be desired, as the video game market soon faded out, leaving only Atari and Magnavox as the survivors in the video game industry.
By 1980, Atari had released their popular hit arcade game "Space Invaders" FOR FREE onto the Atari 2600 video game console. This was a turning point for the video games industry and for Atari, as people flooded to buy the Atari 2600 just to play the game. There were many other video games and consoles that actually contained better graphics, such as Mattel's Intellivision, but they couldn't generate the sales, as Atari ruled the video games industry in the early 1980's.
It wasn't until late 1982 to early 1983 where a company named Coleco introduced their video game console, "ColecoVision", a much better arcade-like appearance with graphics, sound and movement. The problem was that Coleco was nearly twice as expensive as Atari and many families could not afford it nor justify the cost. And while Coleco couldn't outsell Atari that year, it was still considered by many to be the hottest video games console on the market at the time, offering 10 video games including its biggest seller "Donkey Kong," which was extemely similar to the actual arcade experience.
But then it happened... in the latter year of 1983 to early 1984, video games died. There is much specualtion as to why, but the majority agree that is was due to horrible graphics and promotions for the Atari 2600 video games, since they owned a majority of the market. They just didn't improve, and while the console was cheap, the graphics were awful.
In 1985, Nintendo released the Nintendo Entertainment System (NES) which again, revived the video games industry. It used a front-loading cartridge port similar to a VCR and was packaged with a Super Mario Brothers game -- similar to the success of Atari being packaged with Space Invaders in the early 1980's.
But unlike Atari, what made Nintendo really successful was their control over the quality of video games. They built a lockout chip into the NES. This kept third parties from producing their own cartridges and forced all developers to go through Nintendo to get NES video games published. A smart move by Nintendo as it allowed them to do things like prevent developers from releasing low-quality video games or games not suitable for children and limit developers to five titles a year.
As always, a slew of new video game consoles were soon introduced in the following years to compete with the NES. Sega's Master System was intended to compete with the NES, but never gained any significant market share in the US and was barely profitable. It fared notably better in PAL territories, especially Brazil.
In August of 1989, Sega regained market share by releasing their next-generation console, the Sega Genesis. Sega extended the Mega Drive with the Mega CD/Sega CD, to provide increased storage space for multimedia-based games that were then in vogue amongst the development community. Later, Sega released the 32X, which added some of the polygon-processing functionality common in fifth-generation machines. However, the peripheral was a commercial failure due to lack of software support, with developers more keen to concentrate on more powerful machines, with a wider user base, such as the Saturn that followed shortly after. Other competitve video game consoles included in the fourth generation are NEC's TurboGrafx-16 and SNK Playmore's Neo Geo.
In 1994 Sony's PlayStation was first introduced. It was the eventual result of a breakdown of a business partnership plan between Sony and Nintendo to create a CD add-on for the SNES, by which Nintendo broke their deal and signed a new deal with Phillips. As a result, The PlayStation was born and spawned a whole lineup of consoles from generation to generation and has earned Sony great respect as a video game company, becoming the first video game system to sell over 100 million consoles. Unfortunately for Sega, it was the beginning of their demise. Sega's last video game console was the Sega Dreamcast. It was mildly successful due the outbreak of Sony Playstation and Super Nintendo (SNES) video game systems.
Soon after the success of Playstation, the Nintendo 64 was Nintendo's answer to Sony's growing dominance. It was a 64-bit console, the only one generally recognized in that class despite the 64 bit Atari Jaguar, which had actually been released earlier. Unlike the other companies' consoles of the generation, the N64 had continued to use ROM cartridges, which many saw as a hindrance to gameplay, as cartridges have much less memory space and are also more expensive than optical media; however, Nintendo's answer to this was that unlike CDs, cartridges cannot be damaged by a simple scratch to the surface, nor are load times much of an issue. Nevertheless, it is also possible that Nintendo did this for fear of then growing software piracy issues facing other consoles, such as the PlayStation. Thus Nintendo managed to make a bigger profit out of the Nintendo 64 than Sony made out of the PlayStation.
Sony's PlayStation 2 was the follow-up to their highly successful PlayStation, and was also the first home game console to be able to play DVDs. Sony redesigned the console in 2004 into a smaller version. As of September 20, 2007, it's the single best selling console to date.
The Nintendo GameCube was Nintendo's fourth home video game console and the first console by the company to use optical media instead of cartridges. The Nintendo GameCube did not play standard 12 cm DVDs, instead employing smaller 8 cm optical discs.
Microsoft's Xbox was the company's first video game console. The first console to employ a hard drive right out of the box to save games but was criticized for its bulky size, as well as for the awkwardness of the original controller that shipped with it. Alas, it eventually gained popularity due in part to the success of the Halo franchise.
Microsoft's Xbox 360 was released in 2005. The Xbox 360 was the first console with the ability to use wireless controllers out of the box. The Xbox Live service is the hallmark of the system, and the console can connect to the service via the Internet through a built-in ethernet port or a wireless accessory. The Xbox 360 is capable of out putting full 1080p with its HDMI port, and with a 2006 update, it is able to output 1080p over component cables as well.
Sony's PlayStation 3 was released in 2006. All PlayStation 3 systems come with a hard drive and are ready to play Blu-ray Disc movies and games out of the box. The PlayStation 3 was the first video game console to support HDMI out of the box, utilizing full 1080p. Controllers connect to the console through Bluetooth and have tilt-sensing capabilities.
Nintendo's Wii was released in 2006. It is bundled with Wii Sports in all regions except for Japan. Unlike the other systems of this generation, the Wii does not have an internal hard drive originally (Newer models now do), but instead uses 512 MB of internal Flash memory and includes support for removable SD card storage. It also has a maximum graphics output of 480p, making it the only seventh generation console not utilizing High Definition. Along with its low price point, the Wii is renowned for its completely redesigned controller, Wii Remote, which resembles a TV remote. The system utilizes a "sensor bar" that gives off infrared light which is captured by an infrared camera in the Wii remote to determine orientation relative to the source of said light. It is also the first Nintendo console to be backwards compatible with previous Nintendo consoles, where it can play all GameCube games and supports up to four GameCube controllers and two memory cards, along with Virtual Console which supports games from older systems, including those of former competitors.
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