The 6th generation of gaming was a happy and a sad time for consoles. It introduced the first console from Microsoft, the Xbox; as well as a mighty second instalment from Sony, the PS2; and not forgeting Nintendo's effort, the GameCube. However, it was also the time where the once great Sega threw in the towel as their last ditch effort to reclaim the throne from Sony, the Dreamcast, crashed and burned. Due to the curiosity and suspense behind the PS2, Sega stood no chance of gaining back ground which was lost after their stint with the Saturn. Despite having a decent console that included a modem allowing for online play, Dreamcast just didn't have the 3rd party back-up that Sony did and as such, withered away.
Aww, diddems. I never owned a Dreamcast, and rightly so – the PS2 simply had better games. No contest. Although I did own a Mega Drive back in the day so I feel a little sad for Sega... not for Sonic though – he can burn. Although he managed to survive the fiery wrath of failure to rise up through the ashes of shame only to be brought back onto other consoles. Oh yes, just because Sega stopped making consoles doesn't mean they're out of the gaming industry.
So anyway, onto success stories. Sony was clearly dominating the market as yet again, Nintendo were albeit crushed by them due to the lack of Nintendo sales in Japan. Their only hope was the sales in North America! Which they were doing really well in! YAY!! HAPPY!
Then Microsoft make the Xbox, chins Nintendo and takes North America. Ouch.
It's not all doom and gloom however as Nintendo, despite lacking where it mattered, pulled through with their handheld console: the Gameboy Advance – ultimately dominating the handheld market. Although their only competition was the Nokia N-Gage which was about as big a threat to Nintendo as eating a bag of chips is on the sea-side. Seagulls are annoying, not deadly.
However, Microsoft was reportedly at a significant loss after releasing the Xbox, focusing on making gains through game development and publishing. Although things started looking a lot better for Micrsoft when Halo: Combat Evolved was released shortly after by Bungie Studios which instantly became the Xbox's driving point of success.
On a side note, the general gamer base (of which playstation led) had seemingly established a hunger for more complex, sophisticated and adult-oriented games. This also drove a nail into the coffin of Nintendo as they were seen largely as a 'kiddie's console.'
Furthermore, alternate controllers make a comeback with the likes of the guitar-shaped controller for Guitar Hero and the dance mat for Dance Dance Revolution.
Computers also stepped back into the limelight when boadband became affordable and as such developers went all innovative and started making online games including mmorpg's such as EverQuest, Ultima and the massive success that is World Of Warcraft. Consoles also dabbled in this though they were largely unpopular apart from Microsoft's Xbox Live which became it's driving force due to games like Halo 2 which was 'overwhelmingly popular.'
Furthermore there was a rise in casual games on the PC such as Popcap's Bejewled; Maxis' Sims, which became the best selling PC game of all time and Zynga's Mafia Wars and Farmville which are based on social networking sites like Facebook.
It's worth noting that games like Mafia Wars and Farmville are raking in massive profits for the developers due to cunning marketing techniques that the rest of the gaming industry seemed to overlook.
Sony and Nintendo release new handhelds: PSP and the DS, respectivley. However Nintendo shows that this is their kung-fu by winning this two horse race. This was due to the DS's interactive, dual-screen interfaces appeal to children and the middle aged with such games as the Brain Age series by Dr Kawashima. Among others.
The PSP didn't flop by any means, it was merely embraced by the more 'hardcore' side of the gaming society.
Come 2005, Microsoft try to get in an early start with their 360 console when Sony release their PS3 in 2006 and then Nintendo later brings out the Wii. Which, for all intensive purposes seemed like it wasn't going to do well and yet it did away with all the nay-saying and sold out for the first 18 months becoming the fastest selling console in most of the world's gaming markets.
In addition to the 360's and PS3's computer-competing power, they also boasted respective online support through the Playstation Network (PSN) and a refurbished Xbox Live. The only thing giving Xbox an advantage was the price, as it had to compete with the Blu-ray and WiFi supporting PS3.
Lastly, there appears to be a five year development time between generations however there appears to be a delay with the 8th generation. The reason for this being is that the technological and financial requirement to create consoles far improved from our current ones (like the PS to PS2) is too high. Moore's Law dictates that computing technology doubles every two years and yet that is apparently too slow as we would need to wait till 2020 for our next consoles, if they're to have the improvement on the scale of their predecessors.
Microsoft and Sony have seemingly combated this 'setback' by creating their own motion-sensitive toys; The Kinect for Xbox and the Move for PS3. Nintendo are otherwise bringing out a new DS that supports 3D gaming without the need for 3D glasses in March of 2010.
I have no doubt that the next piece of hardware Sony and Microsoft develop will be 3D based. In spite of all this I see that the gaming industry faces a hard time creating something new for us, lest we be stuck with the same graphics level for several years.