My kids have video game systems and some PC games as well.
In particular, the Wii can be quite physically active. Also, the kids learn to read, hand/eye coordination, fine motor skills, sportsmanship.... Also, youngest loves creating architectural wonders on Roller Coaster Tycoon (PC game).
I'm not quite sure that this same son would have learned to read as well as he does had we not had video game systems around when he was very small. Now, at age 10, he is a very proficient reader (great comprehension skills) and is doing great in school.
So, there can be some good things about video games.
We do not allow rated 'M' games at home or at friends' houses. My boys know this and will let their friends know as well. My boys are ages 10 and 13.