NES and the subsequent revival of the console was on account Nintendo being bold enough to invest when the conventional wisdom was that video games were a fad whose time had passed--that combined with a leap in AV quality over the Atari 2600 (the last mainstream console). 70s/80s culture seemed to churn every few years, it was riddled with fads, so the feeling was grounded in reality.

Outside of the console market, between the 2600 and the NES, there was growth in gaming on personal computers, but it was driven by floppy pirating. I'm not sure there was a lot of profit there.