First - I see the Minecraft cactus, I LOVE that game
Second - I think the immediate effect was that it distracted people. Kids did, and still do, bring hand held video games into school, distracting themselves from the lesson (I know I used to do that in 6th grade haha). Not only that, people would use those as a way to not do school work, home work, chores etc.
Another effect was that kids who didn't have those consoles, either because they couldn't afford it or because it wasn't important to them, could have been bullied and made fun of.