Hmm... when does the current generation start and end? Let's say the Dreamcast to the X-Box 1, and PC games that came out in that period? These are the games that SURPRISED me, but not all my favorites (since obviously many of my favorite games DIDN'T surprise me).
Okay, so:
-Deus Ex (PC)
-Shadow of Destiny-brilliant
-Eternal Darkness-one of the best survival horror games ever, and the first one with (gasp) a great battle system. An absolute must play if you like the genre.
-Luigi's Mansion-loved every minute of this. It's like 50% Resident Evil, 30% Ghost Busters, and 20% Mario game.
-Pikmin-I didn't like the second one, but the first was amazing. Great graphics and totally new gameplay. Also the first and only great RTS for a console.
-Final Fantasy X-brilliant, and a big surprise to me, because for some reason I wasn't expecting to like it. I guess I thought equally Final Fantasy 9 was impossible, but they did it.
-Metroid Prime. I was 99.9% certain they couldn't pull off a real Metroid game in 3D. Thankfully I was wrong. (Though that hideous "Metroid Prime Hunters" on the DS plays like I thought Metroid Prime would play like)
-The Collective's Buffy game. The first and (only?) actually great licensed game, and the best scrolling fighter in years (can't think of a better one off hand). Unfortunately the Eurocom quasi-sequel was just ho-hum...about what you'd expect from a licensed game.
-The continuation of 2D Metroid style Castlevania games on the GBA and DS. I wasn't expecting it, but I'm sure happy about it! (I can't list the 3D ones stinking as being a surprise though...)
-Metal Gear Acid-wasn't expecting a card based strategy game! But it sure came out great!
Big surprises...in a bad way:
-Kingdom Hearts 1-hated this. The gameplay is just tedious IMO. I really enjoyed the sequel Chain of Memories on the GBA though (but I haven't even tried the next one on the PS2 yet).
-Jak II-the first one was a solid Rare platformer clone, the second mucks up the gameplay, making it hardly even a platformer. Sets it in a dreary, boring, tired "post apocalyptic" setting. And makes the main character hidiously unappealing by making him "cool".
-The Warriors-after all the hype, I was surprised that I hated this dirty, poorly controlling little game.
-Silent Hill 2. The first one was brilliant IMO, and not something I thought a game would be capable of for years. Unfortunately the second one just seemed gross. The sequels seem like marketing driven things, rather than art.
Industry Surprises:
-Microsoft enters the game industry-so far I think it's a detriment. They've hurt Nintendo (who I think would have had at least as much market share as Nintendo and Microsoft combined ended up with). They've also neglected the PC (while pretending they're not) which is hurting creativity in general-they've fragmented the market further, shown a complete disregard for older games, etc.
-Sega exiting the hardware business-and possibly more shocking-Sega's quality going down terribly since then. It seems like they're beginning to recover, but they just don't seem like Sega anymore. This is a house that used to compete with Nintendo on quality and innovation-and now releases broken Sonic games

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-Microsoft bought Rare (!) So far I think their quality has gone way down. Loved Starfox Adventures, hated Kameo, and I've thought their other recent games have just been "okay".
-The bizarre DS hardware...and the fact it's done so incredibly well (I expected the PSP to slaughter it).
-Microsoft's forced registration on PC software