Nintendo 64.
Whilst it didn't have the largest record-breaking games library... It had the best quality games of it's generation.

I'd have broadened this topic to all competing consoles in the generation that didn't win. Gamecube was better than Xbox and the gap betwen those two systems was pretty small. In the first generation, the Bally Astrocade had better games than the Intellivision did.

As far as iconic games, of this list, I'd say the N64.

I actually made that thread before years ago, so this time wanted to do something different and narrow the field a bit.

Imho, PS3 by a very long shot.

PS3 lost to WII, but it was the best console of the generation. PS3 redemption arc is just amazing, from the worst system to the uncrowned king.

The only one that comes close is Genesis/Mega drive.

I went with the Megadrive, which has more games I like than the Super Nintendo.
N64 is also a good option, the 5th gen is a favorite of mine, and while the N64 only sits in the third spot for me for that gen, it had some of the most iconic games ever. Super Mario 64 and Ocarina of Time alone are enough to elevate it a great system.
Xbox is deserves a honorable mention, the hardware was great, it got the finest multiplats and my memories of playing Halo CE+2 for the first time are very special.

I can't consider PS3 a runner-up system. Yeah, Wii sold more units, but had very few satisfied customers. 30 million Grandmas buying a Wii, playing it once, and throwing it into their closet is not good. And the Wii U failure showed just how much non-Nintendo fans regretted buying a Wii. 

So Genesis is my pick. 

1. It was the first system to have backwards compatibility. Yeah, you had to buy a Powerbase Converter but those were $35. 



2. It was the first successful system to have plastic clamshell cases, which made collecting CIB for it much easier. 

Excellent Genesis games are...

X-Men 2 Clone Wars (The best side scrolling X-men game!)
Sonic 2
Gaiaires (Fantastic Shmup)
Elemental Master (Same devs as Thunderforce 3)
Thunderforce 3
Lightening Force
Ristar
Buster's Hidden Treasure (An excellent Sonic 2 Clone)
Rocket Knight Adventures (A Konami Mascot Platformer Hidden Gem)
Castlevania Bloodlines
Revenge of Shinobi
Shadow Dancer (Part of the Shinobi Series)
Shinobi III
Mazin Saga Mutant Fighter (A crazy power rangers style beat-em up with giant robots to jump into)
Comix Zone
Alisia Dragoon (A great action platformer)
ESwat (A RoboCop style side scrolling shooter)
Robocop vs Terminator (Completely different than the SNES version. This one is actually good and is its own game.)
Vapor Trail (Another great Shmup)
Valis III (A side scrolling Castlevania clone with cutscenes)
El Veinto (A weird action side scroller that is a cult classic)
Ys III (A side scrolling action RPG.)
Granada (A top down Tank shooter)
Mega Turrican
Target Earth
Gunstar Heroes
Contra Hard Corps
Atomic Runner
Ranger X (Best and most complex shooter on the Genessis.)
Battletech
Skeleton Krew (Top down Shooter)
True Lies
Earthworm Jim
Earthworm Jim 2
Vectorman
Vectorman 2
Phantasy Star IV
Pirates Gold 
Dune
New Horizons
Landstalker
Beyon Oasis
Shadowrun
Crusader of Centy
Blades of Vengeance
Streets of Rage 2
Trouble Shooter
Splatterhouse 2
Splatterhouse 3
Mortal Kombat 2
Ultimate Mortal Kombat 3
Desert Strike
Jungle Strike
Urban Strike
Golden Axe 2
Dragon's Fury
Air Buster
Truxton
Gleylancer
Fire Shark

3. Games are still made for it to this day. There's something like 200 new Genesis games from 2020 to 2025 alone. Physical games that you can buy from places like Kai Magazine, Neofid, Homebrew Factory, Megacat, Retrobit, etc. Notable newer Genesis games are...

Life of Earth
Life on Mars
Demons of Asteborg
Astebros
The Cursed Knight
The Cursed Legacy
ZPF
Tanglewood
Shadow Gangs
Xenocrisis
Daemon Claw


4. Sega CD was the first mid-gen upgrade and had a lot of great games on it if you knew what to get. The model 2 was $229 in 1993 and came with Sewer Shark packed in. Most Sega CD games were $50 which was a lot cheaper than the $70 that regular Genesis games cost. Notable games were...

Robo Aleste (A sequel to the legendary MUSHA)
Snatcher (A Kojima Masterpeice)
Lunar (Completely different than the PS1 remake.)
Lunar 2 (See above)
Popful Mail (Sidescrolling RPG)
Samurai Shodown (A fantastic port that blows the SNES/Genesis versions out of the water.)
Out of this world/Heart of the Alien Doublepack 
Monkey Island
Thunderhawk (A fun helicopter game.)
Battlecorps (A good game made by Core Design before they started work on Tomb Raider. A mech game.)
Soulstar (An excellent on-rails shooter with all sorts of sprite scaling and effects. If you like Starfox you'll love this.)
Ecco (Has the real music and sound effects. A much better game than the Genesis cart)
Ecco 2 (Ditto)
Panic! (A fun and funny point and click adventure game)
Terminator (100% a different game than the SNES/Genesis versions. It has nothing in common with those games. Not a single level.)
Keio Flying Squadron (An awesome Cute'em up)
Final Fight CD (Final Fight except you can play as Guy and have good music and sound effects.)
Dark Wizard (Excellent Strategy RPG)
Sonic CD 
Android Assault (A good shoot em up)
Silpheed (Another good shoot em up)
Rise of Dragon (A point and click cyberpunk RPG)
Shining Force CD

XBox One it had a nearly identical third-party lineup to the PS4 even though a good chunk of them showed up later and it had Forza Horizon 2, Forza Horizon 3, Forza Horizon 4, Forza Horizon 5, Sunset Overdrive, Dead Rising 3, Quantum Break, Forza Motorsports 5, Forza Motorsports 6, Forza Motorsports 7 as console exclusive games.

It was kind of obvious he was referring to sales. 

Another good thread idea would be which system that won the championship is the best?
Atari 2600, NES, SNES, PS1, PS2, Wii, Switch

Hard to top N64. That system was loaded with quality releases! Small-but-strong library of generation defining experiences.