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Gen 7 is overrated because devs were lazy and a lot of the launch games for Gen 7 looked worse than the best Gen 6 games. Ninja Gaiden Black looked better than most 360 launch titles. Super Mario Galaxy on the Wii looked better than pretty much any 360 or PS3 launch title. 
Gen 3 wins without a doubt. The NES was able to split the ram between the console and the cartridge. This allowed for later NES games that could use 3-4 times as much ram as launch titles. 



Also, PC Engine launched in October 1987 in Japan. This is about a year after the September 1986 NA region-wide launch of the NES in the USA. Yeah there was a test market in LA and NY, but the real NES launch for all of NA was 1986. And the NES launched in Europe in 1986 as well. So anyway, the PC Engine fits into Gen 3 nicely. 

PC Engine had a CD add-on that launched in 1988. It also got Ram expansion cards that fit into the cartridge slot. So we were able to get shmups like Sapphire that looked nearly as good as Sega Saturn launch titles. 
So for Gen 3 we went from Gradius II looking and sounding like this on the NES...

To Gradius II looking and sounding like this on the PCE CD. 

HoloDust said:

Since C64 belongs to Gen 3 in timeline and tech, some examples of where getting to know stock hardware gets you:

1982, one of "launch" titles, Fort Apocalypse:

1983 (year Famicom and SG1000 launched in Japan), Blue Max:

1987, halfway into "gen" (along with year that Amiga 500 launched), Great Giana Sisters:

and 1988, sidescroll shooter, Armalyte

1993, end of C64 (in '94 C64 was stopped being produced), game that is considered pinnacle of what was possible on stock C64, Mayhem in the Monsterland:

2017, retro-coder enthusiast C64 project, Sam's Journey, which is borderline magic for all of us who had C64 back in 80s:

I need some C64 recommendations! I have one but it needs a recap, new fuse and new PSU.