5) Personalized avatars
Whether they are the Wii's Miis, the Rare-designed Xbox 360 avatars, or the PlayStation 3's Home characters, personalized avatars make the games they are in all the more lively. While this is more of an aesthetic choice on the list, there's nothing like inserting yourself into the game you're playing. Mii artists not only create near-identical virtual versions of themselves, but they also design lookalike celebrities, historical figures, and cartoon characters. With avatars you can change your threads from wearing a denim jacket and cargo pants to suiting up completely in Master Chief's armor. The sky's the limit with these puppies.
4) Glasses-less 3D
Handheld generations are not the same as console generations, so it is difficult to ascertain if the Nintendo 3DS's glasses-less 3D counts or not. I argue that it does. Not everyone can view the stereoscopic 3D the 3DS possesses, but the great majority of people are able to. One needs the proper angle to see it. The 3D presented showcases terrific depth, eye-popping gorgeousness, and in some games it helps to judge distances like enemy locations in the upcoming Super Mario 3D Land. Here's hoping more gamers get to know and love glasses-less 3D like I have.
3) Achievements and trophies
The Xbox 360, for better or worse depending on who you are, introduced achievements in video games. These gave players incentives to play games and perform tasks they wouldn't ordinary do. Some argue that achievements and trophies are detrimental to the multi-player experience-- players neglect to help out their teams and instead go after essentially meaningless points or trophies. I surmise that it's cool to be able to compare and contrast the accomplishments of one's fellow friends and gamers by seeing which achievements and/or trophies a given friend has attained. It encourages a sort of competition between friends.
2) Motion control
The Nintendo Wii's success is mostly geared upon its intuitive and innovative control scheme. It brought new games into the mix while keeping a steady stream of titles for traditional gamers. While the promise of 1:1 controls did not surface until the MotionPlus peripheral, that didn't stop people from enjoying tennis, baseball, boxing, golf, and more in Wii Sports, wielding a sword and shield in The Legend of Zelda, or using the pointer for a myriad of shooters. With the Wii's tremendous sales came imitations from competitors. Sony came out with a blatant clone which has a lukewarm amount of success, and Microsoft's Kinect (which I've tried to give a fair chance but it hardly tracks one's body well without lag) has done a fair bit better, revitalizing the Xbox 360 brand.
1) Improved online services
Without Xbox Live the online services of consoles would still be like Nintendo's online-- pretty substandard. Xbox Live allowed for cross-chat play, friend invites, and a profusion of putrid prepubescent children shouting racial profanities into one's ear (thankfully one can mute these little bigoted bastards). Xbox Live is so wonderful that Sony felt forced to come up with a free alternative in the PlayStation Network. Their service only looks to be getting even better with the upcoming release of the PlayStation Vita. If we did not have proper online services that are advanced as they are, we would still be utilizing bare bones online systems. Thank you, Microsoft, for innovating in the online sector.
With that this top five is ova'. List your favorite five innovations of this generation in the comments section. They're always appreciated as you should know well by now.