Sixth generation consoles (1998-Present)

Main article: History of video game consoles (sixth generation)

In the sixth generation of video game consoles, Sega exited the hardware market, Nintendo fell behind, Sony solidified its lead in the industry, and Microsoft developed a gaming console.
The generation opened with the launch of the Dreamcast in 1998. It was the first console to have a built-in modem for Internet support and online play. While it was initially successful, sales and popularity would soon begin to decline with contributing factors being Sega's damaged reputation from previous commercial failures, software pirating, and the overwhelming anticipation for the upcoming Playstation 2. Production for the console would discontinue in most markets by 2002 and would be Sega's final console before becoming a third party game provider only.
The second release of the generation was Sony's Playstation 2. Nintendo followed a year later with the Nintendo GameCube, their first disc-based console. The Nintendo GameCube suffered from a lack of third-party games compared to Sony's system, and was hindered by a reputation for being a "kid's console" and lacking the mature games the current market appeared to want.

The Xbox, Microsoft's entry into the video game console industry.

Before the end of 2001, Microsoft Corporation, best known for its Windows operating system and its professional productivity software, entered the console market with the Xbox. Based on Intel's Pentium III CPU, the console used much PC technology to leverage its internal development. In order to maintain its hold in
 the market, Microsoft reportedly sold the Xbox at a significant loss^[86] and concentrated on drawing profit from game development and publishing. Shortly after its release in November 2001 Bungie Studio's Halo: Combat Evolved instantly became the driving point of the Xbox's success, and the Halo series would later go on to become one of the most successful console shooters of all time. By the end of the generation, the Xbox had drawn even with the Nintendo GameCube in sales globally, but since nearly all of its sales were in North America, it pushed Nintendo into third place in the American market.
In 2001 Grand Theft Auto III was released, popularizing open world games by using a non-linear style of gameplay. It was very successful both critically and commercially and is considered a huge milestone in gaming.
Nintendo still dominated the handheld gaming market in this generation. The Game Boy Advance in 2001, maintained Nintendo's market position. Finnish cellphone maker Nokia entered the handheld scene with the N-Gage, but it failed to win a significant following.
Console gaming largely continued the trend established by the PlayStation toward increasingly complex, sophisticated, and adult-oriented gameplay. Most of the successful sixth-generation console games were games rated T and M by the ESRB, including many now-classic gaming franchises such as Halo and Resident Evil, the latter of which was notable for both its success and its notoriety. Even Nintendo, widely known for its aversion to adult content (with very few exceptions most notably Conker's Bad Fur Day for the Nintendo 64), began publishing more M-rated games, with Silicon Knights's Eternal Darkness: Sanity's Requiem and Capcom's Resident Evil 4 being prime examples. This trend in hardcore console gaming would partially be reversed with the seventh generation release of the Wii. As of 2011, the PlayStation 2 is still in production and continues to sell steadily over a decade after its original release.^[87]