All art forms use genre to sub-define themselves; movies, books even television shows all use genre to help consumers choose which product to buy. Gaming itself is built off of several 'core' genres:
First Person Shooters and Third Person Shooters (FPS e.g. Halo, Call of Duty, Gears of War)
Real Time Strategy games (RTS e.g. Starcraft, Age of Empires)
Platformer (e.g. Mario)
Role Playing Game (RPG e.g. Final Fantasy, Zelda [Zelda may be arguable but we'll talk about that tomorrow])
But genre is not a perfect system, and we often see it limit the potential of games. When a producer green-lights a game, they often do it based on genre; if they are producing an FPS and the product is very heavily based on puzzle elements they are less likely to produce that product because they are worried that their core FPS community won't be as interested in that game. That game may have been really fun, and the puzzle elements may have helped the game sell better, but the studio is afraid to cross genre lines. This is why FPS/RPGs are generally not FPS/RPGs but rather FPS with a dash of RPG on the side (Borderlands, Mass Effect 2).
The genre system is similarly flawed on the consumer side. Lets look at a game called Portal. Portal was developed by Valve, a community centered developer famous for revolutionizing the FPS genre with Half-Life and Counter Strike. One day they stumbled across a student project called Narbacular Drop, the game's core mechanic was going through portals, but that's about where the similarity ends between it and the modern portal. Valve brought the student team in to talk about a feature game title and liked what they heard, after a single day of interviews the team was put to work developing portal for a cross-console release. Come 2007 the team was done development, but the seemingly faultless Valve began to get antsy about selling a new genre (is it a FPS or a Puzzle game?) so it decided to make a bundle package called the Orange Box with 2 AAA FPS, Half-Life 2-2 and Team Fortress 2 both of which had been through multiple release delays and were highly anticipated by the gaming community. Out of the three games in the box all got stellar reviews and portal led the pack, ultimately warranting a stand alone publish in 2008 (which no one bought because the Orange Box was a better deal). In 2011 Valve made the stand alone title Portal 2 to critical acclaim. Now imagine if Valve hadn't bundled Portal, would it have gotten enough exposure to the community to warrant a sequel, would consumers have looked portal over entirely and gone for the more familiar titles of Half Life and Team Fortress, and for what? Portal would've been one of those games that was good, well liked, but flopped in sales, and Valve would've never made Portal 2.
Genre defines things, and anything that defines things also limits it, prevents exposure, and as long as this industry remains genre centered, we won't see many innovative games like portal, just more of the same old 'stuff that sells.'
Okay, so that ended on a sort of sad note, but tomorrow we'll be talking about the all encompassing Action-Adventure genre and where those games really belong