Video Game Being Played First Segment

Ikaruga was released on both the GameCube and Xbox Arcade in the US so either is definitely possible.

According to the commentary, the game is Rhythm Destruction.

Its an Xbox controller, I actually stopped the movie at this part of the movie because I had a WTF moment. There's a PS3 next to the tv and then I saw him put the game controller down on the table and I was "woah woah woah, wtf is this" but if you look on the floor when he stands up you can see a Black original Xbox on the floor that I assume he's gaming on.

Also as an FYI I spotted a NES, SNES around the same TV with the PS3 and Xbox also a powerglove on the floor and in his bedroom a Sega Master System. Pretty cool little easter eggs for people into that kinda stuff :)

Yeah I'd second that it's Rhythm Destruction, I have it on Steam for PC. Awesome little title, sort of a combination between Dance Dance Revolution and a bullet-hell shooter (slightly less bullet-hell given the multitasking you're expected to do).