to add to what Mikhail121's post:
game company's in the past, present and future, they acquire API's from the console manufacturer. from there, they made games and tested them using any workstation [pc, whatever] that "spoke" the same "language" as the console. Mikhail121 is right about it being almost entirely assembly in the past but today, the API's are pretty high-level. some consoles support OpenGL* and SDL* such that you can program games, demos, etc using these API's.
* as far as I've read, ps2-linux-dev kit had some OpenGL-like support [very much like a mesa library] and someone [sony maybe?] has an SDL port for it also...