First off thanks so much Anihawk for making this thread! It's always a delight to see everyone's answers and to both hear why people loved these games, and to get ideas for other games I may have missed that I want to play in the future.
This gen was probably the gen where I played the most games, largely because it was that sweet spot in my life between having disposable income and free time to really delve deep into a bunch of games.
I debated back and forth between listing what were my favorite games of the gen and trying to do some sort of best made games or games I'd recommend to others. In the end I picked the 10 games I had the most fun with, so you'll have to excuse my multiple entries from the same series haha. (Also apologies in advance Ani for the crazy honorable mentions list too, this gen was just too good!)
1. Super Mario Galaxy 2 ; Hands down my favourite platformer of all time, Super Mario Galaxy 2 fulfilled the impossible and was actually as wonderful and awe-inspiring as the first entry. This game pulled no punches, and managed to strike a great balance between challenging levels, creative new ideas all while being a joy to play rather than frustrating. The reward for collection 120 stars was absolutely incredible and might be my favorite post-game content of all time. All in all a magnificent game that I think may be rivaled, but never topped by other platformers.
2. Dark Souls ; So I went into this game knowing almost nothing at all, besides the fact that a bunch of people had talked about Demon's Souls as one of the great games of the gen, and I happened to stumble upon something that sounded similar and was on Xbox 360! Little did I know that what would await me was the most satisfying action adventure, which would single handedly make me go get a PS3 so I could play the prequel. The level of wonder as I slowly found how the world of Dark Souls was all interconnected, as well as my first experience in taking down the crazy bosses in the Souls series makes this one of my favorite experiences of the 7th generation.
3. Demon's Souls ; If I had played Demon's Souls first, there's a very good chance it would be at the top of this list. While Demon's Souls may feel a little unrefined after playing the other games in the series, I'd argue it's still the most consistent in quality all throughout the game, with my favorite boss battle in the series with False King Allant. The NPCs also managed to feel even more distinct and intriguing than in Dark Souls, with the Maiden in Black being my favorite character from the series. I unfortunately was late enough to the party that I never really got to try out the online side of things (except for fighting a PC controlled Old Monk who was really terrible haha), and I think even with the shenanigans that world tendency involved, finding the Dragon Bone Crusher out of the blue is one of my favorite moments in gaming.
4. Portal ; Probably the most perfect game to come out of Gen 7. Portal was excellently paced, had incredible humor, a bunch of crazy ways to break the game and solve puzzles in inventive ways, and a bunch of trials that let you really push the limits to get the gold. Probably my favorite puzzle game thanks to the depth in its simplicity.
5. Super Mario Galaxy ; Every bit as creative and wonderful as its sequel, the only thing keeping SMG from the top of this list is that the game takes too long to get challenging. Thankfully, this is offset by the sheer fun it is to mess around with the gravity system, and taking advantage of that with the surprise you get for collecting 120 stars. Overall a fantastic platformer.
6. The World Ends With You ; Style - the game. TWEWY is probably the most creative RPG to be released in modern times, and that goes for everything from the art design to the battle system. The story also had a pretty cool Battle Royale twist to it, before it that became the flavour of the month, and the post-game content is incredible between the hilarious Tin Pin Slammer Championship, and the backstory the secret reports add.
7. Rock Band 2 ; While the original Rock Band was more ground-breaking, and the third had the greatest quality of life features, Rock Band 2 had my favorite set list of the series. My friends and I spent countless hours trying to get through some of the more challenging songs like Panic Attack and Prequel to the Sequel, and just attempting the endless setlist 2 was a blast. Makes me wish the genre hadn't burnt itself out so quickly.
8. Uncharted 2 ; So this was the second game I played on a PS3 after Demon's Souls, and I started it on a whim with my brother over the Holiday break. Fast forward 12 hours later, its 6AM and we both agreed it was one of the coolest games we'd ever played. Altogether Uncharted 2 is a perfectly paced masterpiece with great characters, great set pieces and great run & gun combat. No other game since has made me feel as much like Indiana Jones, and had me completely unable to put it down since.
9. Bayonetta ; The first character action game I actually got somewhat good at, and by far the one that feels the best for me to play. The dodge offset mechanic was pure genius, and the constantly escalating encounters kept blowing my mind just when I thought they had reached their peak. Basically you can sum the awesome, crazy shit in this game up by saying you end it all by punching god into the sun. Completely epic, in the true sense of the word.
10. Halo 3 ; Alongside Left 4 Dead 2, this game was my friends and I's LAN game of choice for this generation. When we weren't messing around with custom game modes like our own rendition of zombies, slo-mo snipefests or other equally dumb stuff, the 6v6 battles we'd have over 3 xboxes were the stuff of legends (especially important was the one TV with players from both sides shouting intel to the other guys haha). If that weren't enough, the presence of the first 4 player campaign was awesome, and I swear I completed the game no fewer than 4 times with a different set of friends each time. It may not be the best in the series, but Halo 3 is definitely the Halo I had the most fun with.
Honorable Mentions:
x. Metroid Prime 3: Corruption ; While it may be the worst in my favorite series of all time, this game was still something else when it came out. It just missed my top 10 mainly since it's been nearly 10 years since I last played it (time really flies!) but my re-play of the trilogy this year might end up changing its position, time will tell. All I remember is that skytown was an absolute delight.
x. The Witcher 2 ; Another game that just barely missed the list, the role-playing in this game was so damn good, I went through the game 3 times to see all the content I could. I also am a crazy person who enjoyed the combat, so it was altogether a really complete package for me.
x. Super Meat Boy ; My third and last game that I had a really hard time cutting from the top 10. Thanks to the brutally hard difficulty and the instant respawns, this game is like platformer crack. Nevertheless Super Meat Boy still manages to balance difficulty with progression, and aside from the atrocious boss levels is a 2D platformer to rival the all-time greats.
x. VVVVVV ; Did I mention I like platformers? This game just oozed charm and managed to walk the tight line of throwing new ideas at you, and then wrapping it all up before the gravity mechanic got tiresome. I haven't replayed it with the new achievements, but I suspect now that I have it on my Vita I might replay this game to see all the new content!
x. Persona 3 Portable ; The second game I played in the Persona series, Persona 3 Portable was downright awesome coming straight out of Persona 4 Golden, as the female protagonist was a breath of fresh air after the harem nonsense in the latter game. Tartarus is complete junk, which keeps this game out of the top 10, but the atmosphere, music and female social links were just exceptional. At some point I should go back and play the male side of things, but I almost feel it will retroactively ruin the game since the female side felt soooo damn good.
x. Left 4 Dead 2 ; Another multiplayer classic with me and my friends, rescuing that goddamn gnome will never not haunt me in my dreams. The true shine to the game came from the versus mode however, and the number of ridiculous wins and losses we had make for some fantastic memories.
x. The Legend of Zelda: Twilight Princess ; The Zelda with probably my favorite dungeons, its a shame so many write this off as an Ocarina clone. Highlight of the game was the back to back ice temple and sky temple.
x. The Last of Us ; Another Naughty Dog classic, this is a game I appreciate as being extremely well made, rather than enjoying it so much. I really liked the characters, writing and combat, but the plot left a little to be desired and the forced action sequences that would break stealth annoyed me a lot more than they should have. Definitely planning to replay this one on PS4 on grounded to see if I can't enjoy it more a second time around. Still, the feels you get from that ending...
x. Spelunky ; My favourite rogue-like not named FTL, Spelunky is one of those games you at the same time love and hate, thanks to the way RNG can totally bless or dick you over. Nonetheless, with enough experience and skill almost every game is winnable, and between the tight platforming and careful consideration that each run entails, Spelunky is a master-class in game design.
x. Mega Man 9 ; I'm ashamed to admit it, but this is the first Mega Man I ever beat. Having gone back to play some of the other games in the series (NES and X series), I can now say confidently that it stands amongst the best of them and was a goddamn heroic return of the series. It's a shame Capcom has sinced abandoned the blue bomber, cause hot damn was this an awesome game.
x. Street Fighter IV ; Capcom strikes again! This game was another first, as it was the first time I played a non-Super Smash fighter for any length of time. I blame that mostly on the fairly robust online community, as well as the general fighter resurgence of the time that made getting into the game a lot easier than it might have otherwise been. I still hate Sagat players, but this game was a ton of fun and a great intro into the fighting game genre.
x. Sonic Generations ; I have a really big soft spot for sonic games, since my first console and game was a Genesis with Sonic 2, and this game delivers the fan-service on so many levels. On top of that it's a genuinely enjoyable game, and the sheer depth of the soundtrack makes me want to replay it all the time.
x. The Legend of Zelda: Skyward Sword ; For whatever reason I seemed to enjoy this game a helluva lot more than everyone else around here. The motion controls malfunctioned twice over my entire run for me, and I actually found the dungeons and exploring pretty awesome. The only real downside to the game for me was that the pacing was goddamned awful, but man is the pirate ship in the sand a cool dungeon. And that final boss fight, whew.
x. Batman Arkham Asylum ; A Batman Metroidvania that exceeded all of my expectations in all the best ways. While my intro to the series was Arkham City, Asylum managed to be a much tighter and engaging experience thanks to its more limited nature. Quite possibly the greatest licensed game of all time.
x. Uncharted 3: Drake's Deception ; Another game that I feel gets unnecessary hate, I played through all of Uncharted 3 with my brother in two sittings. While we both agreed the plot seemed a lot more all over the place than 2, the set pieces felt even more incredible, and Jason Statham, I mean Charlie Cutter, was an excellent addition to the cast.
x. XCOM: Enemy Unknown ; Never before has losing player-made teammates in a game been so heart wrenching. This game had me swearing like a sailor at the completely bullshit missed 99% shots, but at the end of the day saving the world from aliens has never felt so good.
x. Castlevania: Dawn of Sorrow ; My favorite Castlevania after Symphony of the Night, collecting souls and traversing the castle were a ton of fun.
x. Advance Wars: Dual Strike ; A game that might be way higher on my list, if I hadn't lost the game cartridge 5-6 years ago and forgotten a lot of the game. All I remember is that I loved the hell out of this game even though it was completely busted from a balance perspective.
x. The Witcher ; Possibly an even better story than the second game, the Witcher 1 took me three tries to get through that damned swamp, but once I did it was a roller coaster of a ride from there.
x. Catherine ; I actually played this one only just this year, and I have to say that oddly enough I really preferred the puzzles compared to the story. The story was still a ton of fun with a great mix between horror, mystery and comedy, but the puzzles are the true stand out, especially that devious Rapunzel game. One of the few games I started playing in my sleep since I enjoyed it so much, hopefully I don't grow any horns though...
x. Banjo Kazooie: Nuts & Bolts ; As a gigantic fan of both Banjo Kazooie and platformers, this game annoyed the hell out of me at first. Once I came to accept it as more of a spin-off, this game was actually surprisingly deep and a ton of fun. Coming up with solutions to the puzzles with friends through some completely crappy designs was a ball, and if the wheels and general physics had controlled just a bit better I think this would be one of my all time favorites.
x. 999: Nine Persons, Nine Hours, Nine Doors ; The game that introduced me to visual novels, and holy shit what a ride it was. The sequels never quite managed to have the cohesiveness that 999 had, but I can't wait to replay this game with the quality of life changes made to the re-release with my friends.
x. Elite Beat Agents ; One of those weird games that sounds absolutely ridiculous in concept, but is a complete delight to play. I'll admit the Chicago song with the kid's father totally choked me up too.
x. Nier ; Another one I only played this year, this game has hands down the greatest soundtrack of all time alongside Chrono Cross. Like Chrono Cross, the complaints about the gameplay are also overblown. That said the gameplay is simply satisfactory compared to the setting, story and soundtrack. I can't wait to play Automata now that I'm done this one.
x. Call of Duty 4: Modern Warfare ; Although I don't play many FPS any more, CoD 4 and its direct sequel had me completely hooked when they came out. Although I can't say I care for how it affected game development, I really enjoyed playing this game with my buddies.
x. Call of Duty: Modern Warfare 2 ; Same thing as above, although RIP akimbo 1887s tearing everything apart.
x. South Park: The Stick of Truth ; A game so funny it made me watch the show, when I rarely watch TV. South Park managed to feel like an inappropriate adult version of Paper Mario in so many ways, from the combat to the charm to the moments of outright hilarity. Overall while there are so many incredible moments in this game, as a Canadian I completely adored the Canada level haha.
x. Mario Kart Wii ; While a far step below Mario Kart DS and Mario Kart 8, Mario Kart Wii managed to be the most inviting and newcomer friendly entry in the series, and for that I am extremely grateful. A blast to play with friends of family, even when you get screwed over by a blue shell into lightning into bullet bill for the third race in a row.
x. Journey ; I don't know if this should be here, since I played the game first on PS Now a couple years back (so technically the PS3 version), but Journey was something I enjoyed way more than I expected to. Despite being very simplistic in nature, the sheer joy in running around, meeting new travelers, and accompanying them on their journey had a sweetness to it that I haven't found in any other game.
x. Fez ; Another one that I feel unsure about being on this list, I first played Fez with a friend on their 360. We had fun with the platforming, but neither of us played it long enough to get into the deeper puzzles in the game. About a year later I read a piece on that crazy puzzle they brute-forced, and I bought the game on PC to see exactly what I had missed. A bunch of hours later spent scrawling furiously in a notebook, this game was a classic in my books, and I really wish I had gotten in on the zeitgeist back in the day when everyone was figuring everything out together.
x. New Super Mario Bros. Wii ; While the 2D platformer here is really solid and fun, the best part of NSMB Wii was the local multiplayer. Playing this with 3 friends and continually screwing each other over while trying to reach the end of the level first was a blast.
x. Castle Crashers ; Another game with some awesome co-op, Castle Crashers came out of nowhere for me and my friends, but once we started playing it we were hooked. I think this was actually the first indie game I played on 360, and since then I've been hooked.
Alright so I'm 100% sure there's other games I'm missing, but at this point I think I'm going to wrap it up cause that's a helluva lot of games already! Needless to say this was a fantastic gen despite a slow start, and I'm happy to say that thanks to the explosion of indies in PC gaming, the current gen is somehow even better.
Before I leave off, I just have to make a list of games I really want to play in the future, but as of now haven't had the chance. I was originally going to put comments for all of these too, but I'm pretty sure I'm close to the character limit so I'll hold off from doing so haha. If anyone else has any other recommendations let me know! That's exactly why I love these threads anyway!
Games to play:
Alpha Protocol
Bioshock
Dark Souls II - I know I know, two souls games in the top 3 and I haven't played DS2?? Well I'd like to think it helped me from burning out on the series, and as such I enjoyed Bloodbourne and DS3 more than I might have otherwise

Deus Ex: Human Revolution
Dead Space
Dragon Age: Origins
Dragon's Dogma
Dragon Quest V - Just got this one today actually! Excited to play my first Dragon Quest
Fallout: New Vegas
Final Fantasy Tactics: War of the Lions
Grand Theft Auto V
Metal Gear Rising
Shin Megami Tensei: Strange Journey
Tactics Ogre: Let Us Cling Together
Valkyria Chronicles
Vanquish