Home entertainment has come a long way since the days of Pacman and Pong. From the latest instalment of "Grand Theft Auto" to Massive Multiplayer Online Role Playing Games (MMORPGs) such as "World of Warcraft", today's gamers are treated to vivid graphics and immersive worlds.
Now the companies behind the consoles are looking to bring gaming technology into video calls, making them a fully immersive experience.
The recent launches of Sony's PlayStation 4 and Microsoft's Xbox One were events in themselves, sparking overnight queues. To date, over a million PlayStation 4s have been sold, while over two million gamers have snapped up the Xbox One. Gaming is big business: Activision Blizzard, the company behind titles such as Call of Duty and World of Warcraft, posted revenues of $4.86 billion in 2012.
(Read more: How the business of bionics is changing lives)
"Gaming has exploded in the last 10 years," Alex Simmons, Editor in Chief of video games website IGN.com, told CNBC's Innovation Cities. "Just to put it into context, over 50 percent of Americans play games on dedicated games machines. It's as part of ordinary, everyday life as, you know, reading a book or watching a movie. But video games are really bringing it all together into one package."
Gaming now possesses more than the power simply to entertain us – it also has the potential to change our domestic lives. Microsoft is developing technology that it predicts will revolutionize the way in which we connect with friends and loved ones.
(Read more: Lecture hall or laptop? Students go online)
The company is working on a 'Magic Window' which will enable people to have conversations via a large screen – or even a picture frame – that look and feel real, but are actually taking place thousands of miles apart, in a front room or kitchen. This may all sound like a conventional webcam chat, but Microsoft say it's much more than that.