Console games took something of a back seat to personal computers when the Apple II came out, and later the higher priced IBM PC. Both machines had considerably more RAM and could deliver greater performance than the console games of their time period, and it wouldn't be until the early '90s that the performance crown would go back to console gaming.

Where games used to differentiate on graphics and hardware, they now have to differentiate on playability and network capability, the total user experience. Video game consoles like the Wii have shown that game play still matters more than the hottest graphics capabilities, though those matter as well.

The last major advance in computer gaming came from the rise of the Internet. While networked games date back to the first person shooter, where players would lug their PCs around and set up Local Area Networks to play with each other, the widespread rise of the Internet, and the rollout of broadband access in college dorms allowed these games to get more immersive and interactive. Eventually, this lead to EverQuest, the first Massively Multiplayer Online game; this genre up-ended the games marketing business, as it turned games into a subscription service, and allowed communities of hundreds of gamers to get together to play online.

From a game publisher's experience, what this meant was that instead of releasing a game that would hit the market, and go through a 9 to 18 month product cycle, the games could be generate a constant revenue stream every month, in return for constant development, expansion and patch upgrades. Given the complexities of developing games,3-d game worlds, and the like, this was a way to keep game publishers and game development studios afloat.

From the gamer's perspective, the development into massive multiplayer online games meant whole new vistas were opening. No longer was it just random death matches, or solo play, but an opportunity for the computer game to become a social outlet. You gamed online to hang out with your friends, whether they were in the same city as you (or even your roommate) or if they were around the world from you.
and emphasized team building and socialization.

These two trends combine nicely the subscription model means the games get revised over time, and expanded on, keeping the publishers and developers in business (though there are notable exceptions, and bumps in the history Ultima Online being a good example of a game that made the transition, found its niche and foundered later). From the player's perspective, more and more players are spending their entertainment time online, whether or not there's an actual game involved.

If you go to any MMO game, from World of Warcraft to EVE Online, you'll discover a set of players who go there mostly to explore, show off new costume pieces to each other, and hang out. Indeed, the current hottest trend in online gaming is Second Life, and it has very little actual game play at all. No quests, no leveling up, no explore, expand, exploit, exterminate options it just gives you the chance to make your own 3-D animated avatar and hang out with other people online, building real estate that gets sold virtually and can be converted back into real money. Second Life has become such a phenomenon that manufacturers like Sony and Toyota are looking at it as a major marketing venue for product placement and advertisement!

The evolution of online entertainment is moving away from hardcore geeks and gamers and more towards people just wanting the equivalent of going to a bar online.