In the history of video games, the seventh generation primarily focuses on the consoles released since 2005 by Nintendo, Microsoft, and Sony (i.e. the current generation).

For home consoles, the seventh generation began on November 22, 2005 with the release of Microsoft's Xbox 360 and continued with the release of Sony's PlayStation 3 on November 11, 2006, and Nintendo's Wii on November 19, 2006. Each new console introduced a new type of breakthrough technology. For example, the Xbox 360 and PlayStation 3 offered high-definition graphics and the Wii focused on integrating controllers with movement sensors as well as joysticks (the PlayStation 3 also employs motion sensitivity, but to a lesser degree). Most of the consoles have wireless controllers, while the Xbox 360 also has wired controllers as an alternative.

For handheld consoles, the seventh generation began on November 21, 2004 with the North American introduction of the Nintendo DS as a "third pillar", alongside Nintendo's existing Game Boy Advance and GameCube consoles. The Nintendo DS features a touch screen and built-in microphone, and supports wireless IEEE 802.11 (Wi-Fi) standards. More recently, the new DSi features many new things including two built in cameras, the ability to download games from the DSi store, and a web browser. The PlayStation Portable, released later the same year on December 12, 2004, followed a different pattern. It became the first handheld video game console to use an optical disc format, Universal Media Disc (UMD), as its primary storage media. Sony also gave the PlayStation Portable robust multi-media capability, connectivity with the PlayStation 3 and other PSPs, and Internet connectivity. The Nintendo DS likewise has connectivity to the internet through the Nintendo Wi-Fi Connection and Nintendo DS Browser, as well as wireless connectivity to other DS systems and Wii consoles. Despite high sales numbers for both consoles, PlayStation Portable sales have consistently lagged behind those of the Nintendo DS.

Wii

Nintendo entered this generation with a new approach embodied by its Wii console. The company planned to attract current hardcore and casual gamers, non-gamers, and lapsed gamers by focusing on new gameplay experiences and new forms of interaction with games rather than cutting edge graphics and expensive technology. This approach was previously implemented in the portable market with the Nintendo DS. Nintendo expressed hope that the new control schemes it has implemented will render current conventionally controlled consoles obsolete, leading to Nintendo capturing a large portion of the existing market as well.

This strategy paid off, with demand for the Wii outstripping supply throughout 2007. Since Nintendo profited on each console right from the start unlike its competitors, it has already achieved very positive returns. With only a few exceptions, monthly worldwide sales for the Wii have been higher than the Xbox 360 and PlayStation 3, eroding Microsoft's early lead and widening the gap between its market share and Sony's. On September 12, 2007, it was reported by the British newspaper Financial Times that the Wii's sales had surpassed the Xbox 360, which was released one year previously, and became the market leader in worldwide home console sales for the current generation.

As in previous generations, Nintendo has provided strong support for its new console with popular first-party franchises like Mario, The Legend of Zelda, Metroid, and Pokémon, among others. To appeal to casual and non-gamers, Nintendo has also created the Wii Series of games, where players make use of the motion-sensing abilities of the console and its peripherals to simulate real world activities, such as sports, table games, music, or doing exercises.

Publishers such as Ubisoft, EA, Capcom, and Majesco continue to release exclusive titles for the console, but the Wii's strongest titles still remain within its first-party line-up. Analysts speculated that this will change in time as the Wii's growing popularity persuades third-party publishers to focus on it; however, some third party developers are beginning to express frustration at low software sales. Goichi Suda, developer of No More Heroes for the Wii, noted that "only Nintendo titles are doing well. This isn't just because of the current situation in Japan, as this is happening outside Japan. I am very surprised about the reality about Wii, because before I was making this game, I wasn't expecting that Wii would be a console targeted only for non-gamers. I expected more games for hardcore gamers. The reality is different to what I expected." Conversely, the PAL publisher of No More Heroes Rising Star Games were greatly impressed with the game's sales. Goichi Suda later retracted his comment, saying his "point was that No More Heroes, unlike a lot of Nintendo Wii titles currently available is the kind of product which will attract a different kind of consumer to the hardware, i.e. gamers who are looking for a different genre to the products which have been successful on this platform thus far."

In early 2008, the NPD Group revealed sales data showing that, while the Wii's life-to-date attach rate is low, in December 2007, it reached 8.11—higher than the attach rates for the Xbox 360 and PlayStation 3 in that month. The Wii's low overall attach rate could be explained by reference to its rapidly increasing installed base, as financial analysts have pointed to the Xbox 360's high attach rates as indicative of an unhealthy lack of installed base growth, and warned that what actually benefits third-party developers is “quicker adoption of hardware and a rapidly growing installed base on which to sell progressively more game units,” which tends to lower the attach rate of a product.

On September 23, 2009, Nintendo announced its first price drops for the console. In the United States, the price was reduced by fifty dollars resulting in a new MSRP of $199.99, effective September 27, 2009. For Japan, the price dropped from ¥25,000 to ¥20,000, effective October 1, 2009. In Europe (with the exception of the United Kingdom), the price of a Wii console dropped from €249 to €199.

Xbox 360

Microsoft's Xbox 360 gained an early lead in terms of market share, largely due to its established Xbox Live online gaming system, and its early launch date which was one year before its rivals. Sales in North America and Europe have continued to be strong, even after the release of the Wii and PlayStation 3. Like its predecessor, the Xbox 360 received a muted reception in Japan, attributed to the lack of content aimed at Japanese gamers.

This early launch did come with some trouble, as technical problems appeared in a portion of Xbox 360 units sold. The most well known problem is the "red ring of death", which received a great deal of attention due to some users' claims of having to replace their consoles multiple times. Microsoft addressed this by offering a three year warranty on all affected consoles and repairing them free of charge. It also retroactively reimbursed owners of affected systems who paid for repairs. According to The Mercury News, new models of the console featuring 65-nanometer technology will address this and other issues; the new technology is expected to reduce heat production, which will lower the risk of overheating and system failures; although, this has never been officially confirmed by Microsoft.

As they share many cross-platform games and compete for the same audience as their predecessors, frequent comparisons are made between the Xbox 360 and PlayStation 3. The PS3 uses the Blu-ray format, while the Xbox 360 uses a standard DVD9. The Xbox 360 is less expensive to produce, and analysts expect that a mid-revision will allow Microsoft to break-even on manufacturing costs, while industry consensus is that the Xbox 360's conventional architecture is easier to develop for.

At the end of first half of 2007, the console stabilized at 11.6 million units shipped as sales dropped 60% while its rival, Wii, gained momentum and Sony announced a competitive price drop on the PlayStation 3. Microsoft's strategy to boost sales with the release of the highly anticipated Halo 3 in September 2007 paid off, outselling the Wii that month in North America. Microsoft's Entertainment and Devices Division experienced a huge increase in revenue, largely driven by the release of Halo 3, and posted a quarterly profit for the first time in two years.

The Xbox 360's advantage over its competitors has been its quantity and quality of titles. The 2007 Game Critics Awards honored the platform with 38 nominations and 11 wins – more than any other platform. By March 2008, the Xbox 360 had reached a software attach rate of 7.5 games per console in the US – a record for any console in history; the rate was 7.0 in Europe, while its competitors were 3.8 (PS3) and 3.5 (Wii), according to Microsoft. At the 2008 Game Developers Conference, Microsoft announced that it expects over 1,000 games available for Xbox 360 by the end of the year. The Xbox 360 has managed to gain a simultaneous release of titles which were initially planned to be PS3 exclusives, including Devil May Cry, Ace Combat, Virtua Fighter, Grand Theft Auto IV, Final Fantasy XIII, and Tekken 6.

In August 2007, the first price drop was announced for all Stock Keeping Units (SKU's) of the Xbox 360. The Core system's price was reduced in the United States by $20, the Premium by $50, and the Elite model by $30. Also, the HDMI out port, previously exclusive to the Elite system, was added to new models of the Premium and Arcade systems, the Core system has been discontinued. Note: the "premium" system is sold in Australia as the "pro", Arcade and Elite systems retain the same names

PlayStation 3

Sony's PlayStation 3 was released on November 11, 2006 in Japan and November 17, 2006 in USA and Canada. The system's reliance on new technology such as the Cell microprocessor and Blu-ray format has caused difficulties in manufacturing, especially the Blu-ray diode, leading to shortages at launch and the delay of the PAL region launches; however, by early December 2006, Sony announced that all production issues had been resolved.

Market analysts and Sony executives have stated that the success of the PlayStation 3 and the Blu-ray format are dependent on one another; Rich Marty, VP of New Business Development at Sony Pictures Home Entertainment stated that the “PS3 is critical to the success of Blu-ray," while Phil Harrison stated that the PlayStation 3's success will be ensured because "the growth of the Blu-ray disc movie market ... is a positive factor which will play more into the consumer psyche ... as more consumer electronics firms launch standalone disc players, as more Blu-ray disc movies become available, and as more shelf space is dedicated to the category at retail."

Sony will provide support for its console with new titles from acclaimed first-party franchises such as Gran Turismo and God of War, and secured a number of highly anticipated third-party exclusive titles, including Metal Gear Solid 4, Final Fantasy Versus XIII and Tekken 5: Dark Resurrection Online. Titles which were originally exclusive or recognized with the platform, such as Devil May Cry, Ace Combat, Virtua Fighter, and Monster Hunter, have been released on other platforms. The previous Grand Theft Auto titles were originally timed exclusives on the PlayStation 2, before making their release on other platforms, such as the Xbox, months later; however, Grand Theft Auto IV, the latest installment, arrived day one on the Xbox 360 with the release of the PlayStation 3 version, as well as having exclusive content for the Xbox 360. Announced exclusives titles for the PlayStation 3 such as Assassin's Creed; Bladestorm: The Hundred Years' War, and Fatal Inertia were released on Xbox 360 as well, with the latter making its release on Xbox 360 before the PlayStation 3 version. The Katamari series, which has long been PlayStation 2 exclusives, found the latest installment, Beautiful Katamari, exclusive to Xbox 360. These releases had fueled rumors and fear that Final Fantasy XIII and Tekken 6, two highly anticipated exclusive PlayStation 3 games at one point in time, would also be available for Xbox 360, the PlayStation 3's primary competitor. At E3 2008, it was announced that Final Fantasy XIII would be simultaneously released on the Xbox 360 in Europe and North America. later on October 8, 2008, it was announced that Tekken 6 would also be releasing on the Xbox 360; the fifth installment of the Metal Gear series, Metal Gear Solid: Rising, has also been announced for the Xbox 360; however, Metal Gear Solid 4, Final Fantasy Versus XIII and Tekken 5: Dark Resurrection Online still remain PlayStation 3 exclusives. Sony has blamed lower-than-expected sales, loss of exclusive titles in the PlayStation 3 software library, its higher price, and stock shortages.

In July 2007, Sony announced a drop in the price of the console by $100. This measure only applied to the 60 GB models and was exclusive to the United States and Canada, where those models are no longer in production.

On October 18, 2007, Sony announced a $100 price drop for the 80 GB model and a new $399 40 GB model to launch on November 2, 2007 with reduced features such as the removal of backward compatibility with PS2 games. Within weeks, Sony announced that sales of the 40 GB and 80 GB models by major retailers had increased 192%.

In November 2008, Sony launched a $499 160 GB model, and on 18 August 2009, Sony announced the PS3 Slim. The PS3 slim sold 1 million in under a month. It was then announced that a 250GB slim model was to be released. It was released on September 1 (or 3 depending on country) and costs $299, £249 and €299. In Australia the console will cost A$499 which is A$200 less than the standard PS3.


Discontinuations and revisions

* The PlayStation 3 20 GB was discontinued in North America in April, 2007 and effectively discontinued in Japan in early 2008.
* The PlayStation 3 60 GB was discontinued in NTSC territories by September 2007, and replaced with the 80 GB version.
* The PlayStation 3 60 GB was effectively discontinued for PAL territories in late 2007. When the remaining stock in stores was sold, the 40 GB version served as its replacement.
* Sony announced before the PS3 launch in Europe that the PlayStation 2's Emotion Engine CPU would be removed from it for cost savings, and all backwards compatibility would be software-based. This is also the same for the 80 GB model launched in the North American market in 2007.
* An HDMI out port was added to the Premium Xbox 360 in August 2007.
* The Xbox 360 Core system was discontinued and replaced by the "Arcade" version in October, 2007.
* The price of the Xbox 360 Premium version was dropped to $299 in North America on July 13, 2008. Supplies of the existing 20 GB model were exhausted by early August and it was replaced by an identical model with a 60 GB HDD at a MSRP of $349.
* The PlayStation 3 40 GB was discontinued in all territories in early August 2008 and the new 80 GB version served as its replacement.
* The Xbox 360 Arcade 256MB internal memory SKU was discontinued in all territories in early 2009 and a new 512MB internal memory SKU still named the Xbox 360 Arcade was released.
* The PlayStation 3 slim is introduced on August 18, 2009 and at $299 USD is $100 less than the previous model, and it will be ~1/3 lighter and more energy efficient.

Backward compatibility

The Wii is fully backwards compatible with titles from the Gamecube and the Wii also offers support for some of its predecessor's accessories. Later versions of the PlayStation 3 and all models of the Xbox 360 only offer partial support and use software emulation for backwards compatibility. Current versions of the PS3 do not offer PlayStation 2 compatibility at all, though PS1 compatibility is retained. The Xbox 360's compatibility is increased through game-specific patches automatically downloaded from Xbox Live or downloaded and burned to a CD or DVD from the Xbox website and the PS3's compatibility is expanded with firmware updates. All three consoles provide titles from older consoles for download; the Xbox 360 through the Xbox Originals service, the PlayStation 3 through the PlayStation Store, and the Wii through the Virtual Console. When purchased, the game is saved to console's internal memory or, optionally on the Wii, to an inserted SD/SDHC card.

High definition and enhanced definition video

Both the PlayStation 3 and the Xbox 360 support 1080p high definition video output. However, the output signal may be protected by digital rights management and may require an HDCP-compliant display if HDMI is used. The Xbox Live Marketplace service and the PlayStation Store offer HD movies, TV shows, movie trailers, and clips for download to the console's HDD. Other regional PlayStation Stores only allow download of movie trailers and short segment clips. As of November 2009, the Video Download service present on the American PlayStation Store will be available for select European countries. As of August 2009, only the American store has the PlayStation 3 video download service.

While only a small number of games render the video output in full 1080p, all games can be automatically scaled to this resolution.

The Wii is capable of outputting 480p for the Wii Menu and most games through a component cable which must be purchased separately.

Reliability

According to estimates by warranty provider SquareTrade, the PlayStation 3 failure rate is 10.6%, the Xbox 360 failure rate is 54.2%, and the Wii failure rate is 6.8% as of 17th of August 2009.

Handheld systems

For video game handhelds, 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 IEE 802.11b, as well as a microphone to speak to in-game NPCs. On December 12, 2004, Sony released its first handheld, PlayStation Portable. The PlayStation Portable was marketed at launch to an above 25 year old or "core gamer" market, while the Nintendo DS proved to be popular with both core gamers and new customers.

Nokia plans to revive its N-Gage platform in the form of a service for selected S60 devices. This new service launched on April 3, 2008.

Other less-popular handheld systems released during this generation include the Gizmondo (launched on 19 March 2005 and discontinued in February 2006) and the GP2X (launched on 10 November 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/cellphone devices such as the iPhone and various devices powered by Windows Mobile. 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.

Milestone titles

* Batman: Arkham Asylum (Microsoft Windows, PlayStation 3, Xbox 360) is considered to be the best game based on a comic book to be made of all time, critics have praised its innovation as well as non-stop action-packed gameplay combined with a compelling storyline. It won a Guinness World Record for 'Most Critically Acclaimed Superhero Game Ever'. It broke the record in this category by achieving the highest average score of 91.67 from reviews around the world.

* BioShock (Microsoft Windows, PlayStation 3, Xbox 360) is considered a major influential and artistic game of this generation with a plot that quickly created controversy with the decisions the player makes during the game.

* Gears of War (Microsoft Windows, Xbox 360) had preorder sales which were second only to Halo 2 in the studio's history. Gears of War was also the first Xbox or Xbox 360 game to sell out and reach the top ten charts in Japan. On November 7, 2006—the day that it was released—it became the most popular game on the Xbox Live service, overtaking Halo 2, which had held the spot since its launch in November 2004. By January 19, 2007, just ten weeks after its debut, over three million units of the game had been sold.

* Grand Theft Auto IV (Microsoft Windows, PlayStation 3, Xbox 360) is a sandbox-style action-adventure video game developed by Rockstar North. A few Hollywood producers have set precedent by beginning to browse video-game release dates to check for conflicts due to Grand Theft Auto IV's potential harm to the May 2, 2008 release of Iron Man. As of October 2008, the PS3 and Xbox 360 version has taken the second and fourth positions of GameRankings' best-rated games of all time, respectively. GTA IV also shattered worldwide weekly sales records of any entertainment media to date by grossing over $500 million within the first week of its release.

* Halo 3 (Xbox 360) broke many first day records, including preorders (1.7 million+), and first day sales (US$170 million+), surpassing its predecessor, Halo 2, in both of these fields. It also featured advanced artificial intelligence (AI) technology for enemies, though the player's allies' intelligence was less refined.

* LittleBigPlanet (PlayStation 3) was one of the most highly anticipated games of 2008. Upon release, it received high critical acclaim with a score of 95/100 on MetaCritic and was the second most highly-rated game of that year (behind Grand Theft Auto IV). It was praised by G4 TV as a game that "not only lives up to the hype but exceeds it so many ways" and IGN called it "nothing short of astounding".

* Super Mario Galaxy (Wii), currently one of the most critically acclaimed titles of the seventh generation, sold more copies in its first week, including over 500,000 in the US, than any other Mario title in the history of the franchise. As of July 2009, it is the third best-reviewed game of all-time, as listed on GameRankings, along with being the recipient of many game of the year awards.

* Super Smash Bros. Brawl (Wii) is a product of Nintendo, with a small portion of content made in cooperation with Sega and Konami. It is the third in a series of cross-over fighting games and is the first Wii game to strongly support online play. It is also the first in the series to have third-party characters, with the inclusion of Solid Snake and Sonic the Hedgehog. It dominated sales during its first week in Japan and the United States, selling 820,000 in Japan and becoming the fastest-selling video game in Nintendo of America's history with 1.4 million sold in the US.

* Uncharted 2: Among Thieves (PlayStation 3) is one of the most critically acclaimed games of the generation, it received universal critical acclaim with a Metacritic score of 96 out of 100, a GameRankings score of 95.50%, and a GameStats score of 9.5 out of 10. At E3 2009, critics were extremely impressed by what was shown which led to Uncharted 2 winning the most E3 awards of any game of all time. Critics praised almost every aspect of the game ranging from high quality music and sound to its graphics which some critics even went on to say were the best of this generation. The high amount of attention the developers, Naughty Dog, put into the game was also highly praised due to the highly detailed environments and voice acting that was put into the game. Playstation: The Official Magazine even went on to say in their review, "Forget Game of The Year. This is one of the greatest games of all time!".
* Wii Sports (Wii) has been attributed as a major factor in the Wii's worldwide success. The game, along with Wii Fit, has been cited as attracting more casual, female, and elderly gamers. This is a rarity among seventh generation games, as developers tend to try and attract young men. It has also been cited as one game that can provide a bonding experience among family members, and as a means of exercising and losing weight when played regularly. As of March 31, 2009, the game has sold 45.71 million copies worldwide—including bundled copies, making it the best-selling Wii game and the best-selling video game of all time.