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Shadow1980 said:
In terms of power and release timing, it is clearly a Gen 4 console. It vastly outclasses the NES in every conceivable way in terms of hardware. Its first release (Japan in 1989) was six years after the NES's first release (in Japan in 1983). It spent nearly all of its life in direct competition with the SNES and TurboGrafx-16.

Every post-crash generation was fairly discrete, with each system clearly belonging to a specific generation. It wasn't until the unusual launch timing of the Switch that people started to question how systems ought to be classified generationally.

Incidentally, there actually was some debate about what generations pre-crash systems belonged to. While most people today generally classify all pre-Crash of '83 cartridge-based systems as Second Generation, it wasn't unusual in the past for people to classify very-early 80s systems like the Intellivision, ColecoVision, and Atari 5200 as belonging to a generation separate from the Atari 2600 and other late 70s consoles. But considering they all existed contemporaneously with each other, were comparable in terms of power and game libraries, and all were effectively killed off by the Crash of '83, most people today consider them all as belonging to the same generation.

The Atari 5200 and Colecovision were released about 5 years after the Atari 2600 launch and they were clearly a step above graphically.  At the time, they were called "third wave", and that basically the means they thought of them as third generation.  For the people who remember this era, the real debate is about whether or not the crash negates these consoles as a new generation.  They definitely tried to be, but they didn't sell like the Atari 2600.