Some of my favorite memories for games ....
My sister and I playing Mario Bros. 2 a lot. Whichever one of us playing, the other would sit and heckle as the other characters that weren't on screen at the moment. Mario had an unhealthy obsession with donuts.
Most of my others are more recent. My buddies from college all played old school games. (Though sadly not really old since not a one between us has a working Atari ...) Watching my friend Wendy play Sonic the Hedgehog or Ecco the Dolphin was always a hoot, considering she swears like a sailor. Grand Theft Auto 3 played by my friend Mike was a spectator sport, no doubt. As was the insane amount of really random hentai arcade games Eric had.
I was the Final Fantasy player, so people would come watch me play. I had about 6 or 7 people in my room when I beat FFX. I wasn't really prepared for how few hit points the last boss had. So I crack my knuckles, say "Alright, everyone, here we go!" and sent Auron to get the first shot off. OVERKILL!! There was an awkward silence for a moment, Eric snickered and said "He did 50,000 damage?!", then my friend Liz turned to me and said "You suck."
Yup, just waitin' for FF12.