The 7th gen was the more revolutionary generation in every single way (with the exception of VR & Nintendo making a hybrid console). Online multiplayer really took off on consoles, OS' were fully developed on consoles too, HD was a big step alongside a bigger graphical jump, Motion controls introduced, indie games. Wireless re-chargeable controlers were the default controller. The DS was a new & unique concept. Exclusives for ALL platforms making them so individual that gamers tend to buy multiple different consoles in the same generation (making that generation the highest overall console-sales in history).
Also AAA games were cheaper to develop, it wasn't as much as a business-risk to produce a great game back then. Bethersda made Fallout 3, New Vagas, Oblivion & Skyrim in the same console generation, this couldn't be possible in the 8th generation (an definitely not in the 9th gen lol). Naughty Dog made 3 Uncharted games & the last of US. Rockstar made GTA 4, 5 & Red Dead Redemption. There was 3 Dead Space games, 3 Bioshock games, 3 Resistance games, 3 Mass Effect games.
The 8th generation became stagnant. The rising costs of making a AAA game created a risky business which caused closures of developers, online-only games & forcing companies to cave into Microtransactions. This made the games of E3 not seem as exiting anymore. Console gamers would turn to PC creating a new more 'casual' player base for PC forcing would-be console exclusives to launch on PC, making consoles less necessary (this process is now even more maximised even more in the 9th generation).
Also another fundamental pillar fell, the Wii U flopped (although I loved it's exclusives) and mobile games ate into 3DS' sales, Satoru Iwata (& therefore his potential ideas) died. Nintendo was in a dark place (until they launched the Switch). Nintendo is usually the backbone of console hardware progression (outside of graphics), they created the modern game controller, made portable gaming popular, caused a motion-control update which now other consoles have adapted into their controllers, etc, etc. Sony tends to integrate Nintendo's inventions if they sell well, yet the Wii U flopped so Sony ran out of progressive ideas. The Xbox One also didn't innovate like the 360 did, so Sony couldn't copy any ideas from them either making the PS4 feel like an extension of the PS3. But Sony did copy in Mark Zuckerberg's footsteps and made a VR headset (which is the exception like I mentioned above).
I'm not trying to say the PS4 was unsuccessful or didn't have great exclusives. They just had less amount of good games than the PS3. I remember there was a time when every month a massive game would be released, sometimes multiple to the point where I felt spoilt for choice like no other generation that came before.
As for the Xbox One, it might as well have not existed cos the industry would have been the same without them anyway. That console was the Sega Saturn of the Xbox brand. The start of the downfall of an empire.
The VR Exception - To this day I still feel that Resident Evil 7 VR was the most important game of the 8th generation. It just worked the way VR games should. It felt like going in a time machine to see how VR games will play in the distant future. It was a massive progression. I've been playing games since the 4th generation (including 2nd gen PCs & 3rd gen consoles). Resident Evil 7 VR was a breath of fresh air. It made gaming feel new again. It felt more immersive than any other game & unpredictable around every corner. I don't say this lightly in an era where games feel like the same genre I played before but with a (slightly) different skin.
There was roughly 10-20 really good PSVR games but there wasn't many great VR games in the 8th gen (or 9th gen) and now VR feels like it's been on life support for a few years now. Then a shock that's still not settled yet as Sony announcing they are unplugging the life support machine. So (generally) I'm going to have to vote for the 7th generation on this one.
P.S. I love VR though, don't get me wrong. It saved me at the end of the 8th generation (as well as the Switch).
I have (or have/had in the household): ZX Spectrum, Commodore 64, Amiga, NES, Sega Master System, Super Nintendo, Sega Megadrive, Gameboy, Playstation, Nintendo 64, Windows 95, Gameboy Colour, Windows 98, Sega Dreamcast, Gameboy Advance, PS2, Gamecube, Xbox, Windows XP, Nintendo DS, Xbox 360, Wii, PS3, Windows Vista, iPhone, Windows 7, 3DS, Wii U, PS4, Windows 10, PSVR, Switch, PS5 & PSVR2. :D
and I Don't have: Magnovox Odyssey, Any Atari's, Any Macintosh computers, Sega Gamegear, Virtual Boy, Sega Saturn, N-gage, Xbox One, Xbox Series X/S, PSP, PSVita & Andoid Phone. Plus any non-mainstream consoles/platforms I haven't mentioned.