I grew up in the 80s (aka The Golden Age of Video Arcades) and still play 'em today. My kids (ages 5 and 10) also like them and we do play together. I don't keep up with all of the new systems that are out there (i.e. we don't own an Xbox or a Playstation) but my old Sega Genesis still works just fine and the kids each have a Nintendo DS. We play a lot of Mario, Kirby and Sonic the Hedgehog, and recently we all got hooked on a cool game for the DS called "Monster Tale" that I picked up on a whim for five bucks.
My 10 year old "beat" Sonic, which I have never been able to do in the 20+ years I've owned it. I didn't know if I should be proud, or jealous! Haha. I was like "Dude, you got MAD skillz!"