Like most consumer electronics, home video game consoles are developed based on improving the features offered by an earlier product with advances made by newer technology. For video game consoles, these improvements typically occur every five years, following a Moore's law progression where a rough aggregate measure of processing power doubles every 18 months or increases ten-fold after five years. This cyclic market has resulted in an industry-wide adoption of the razorblade model in selling consoles at minimal profit margin while making revenue from the sale of games produced for that console, and then transitioning users to the next console model at the fifth year as the successor console enters the market. This approach incorporates planned obsolescence into the products to continue to bring consumers towards purchasing the newer models.

Because of the industry dynamics, many console manufacturers release their new consoles in roughly the same time period, with their consoles typically offering similar processing power and capabilities as their competitors. This systematic market has created the nature of console generations, categorizing the primary consoles into these segmented time periods that represent consoles with similar capabilities and which shared the same competitive space. Like consoles, these generations typically start five years after its prior one, though may have long tails as popular consoles remain viable well beyond five years.

The use of the generation label came after the start of the 21st century as console technology started to mature, with the terminology applied retroactively to earlier consoles. However, no exact definition and delineation of console generations was consistently developed in the industry or academic literature since that point. Some schemes have been based on direct market data (including a seminal work published in an IEEE journal in 2002), while others are based on technology shifts. Wikipedia itself has been noted for creating its own version of console generation definitions that differ from other academic sources; the definitions from Wikipedia has been adopted by other sources but without having any true rationale behind it. The discrepancies between how consoles are grouped into generations and how these generations are named have caused confusion when trying to compare shifts in the video game marketplace compared to other consumer markets. Kemerer et al. (2017) provide a comparative analysis of these different generations through systems released up to 2010 as shown below.
For purposes of organization, the generations described here and subsequent pages maintain the Wikipedia breakdown of generation, generally breaking consoles apart by technology features whenever possible and with other consoles released in that same period incorporated within that same generation, and starting with the Odyssey and Pong-style home consoles as the first generation, an approach that has generally been adopted and extended by video game journalism. In this approach the generation "starts" with the release of the first console considered to have those features, and considered to end with the known last discontinuation of a console in that generation. For example, the third generation is considered to end in 2003 with the formal discontinuation of the Nintendo Entertainment System that year. This can create years with overlaps between multiple generations, as shown.

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The development of video game consoles primarily follows the history of video gaming in the North American and Japanese markets. Few other markets saw any significant console development on their own, such as in Europe where personal computers tended to be favored alongside imports of video game consoles. The video game clone in less-developed markets like China and Russia were not considered here.

The following table provides an overview of the major hardware technical specifications of the consoles of each major generations by central processor unit (CPU), graphics processor unit (GPU), memory, game media, and other features.

While there is no similar distinction of generations for handheld consoles, they are included in the sections below based on which home console generation they were released.
The first generation of home consoles were generally limited to dedicated consoles with just one or two games pre-built into the console hardware, with a limited means to alter gameplay factors. In the case of the Odyssey, while it did ship with "game cards", these did not have any programmed games on them but instead acted as jumpers to alter the existing circuitry pathway, and did not extend the capabilities of the console. Unlike most other future console generations, the first generation of consoles were typically built in limited runs rather than as an ongoing product line.

The first home console was the Magnavox Odyssey in September 1972 based on Baer's "Brown Box" design. Originally built from discrete transistors, Magnavox transitioned to integrated circuit chips that were inexpensive, and developed a new line of consoles in the Odyssey series from 1975 to 1977. At the same time, Atari had successfully launched Pong as an arcade game in 1972, and began work to make a home console version in late 1974, which they eventually partnered with Sears to the new home Pong console by the 1975 Christmas season. Pong had several technology advantages over the Odyssey, including an internal sound chip and the ability to track score. Coleco developed the first Telstar console in 1976. With Magnavox, Atari and Coleco all vying in the console space by 1976 and further cost reductions in key processing chips from General Instruments, numerous third-party manufacturers entered the console market by 1977 with ball-and-paddle games. This led to market saturation by 1977, and the industry's first market crash. Atari and Coleco attempted to make dedicated consoles with wholly new games to remain competitive, including Atari's Video Pinball series and Coleco's Telstar Arcade, but by this point, the first steps of the market's transition to the second generation of consoles had begun, m…

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