My 7yo plays video games a couple hours on most days in Spring & Fall... BUT he's not in away-school. So that's pretty much his only sit down time. ((In the winter we're up at 4am to be on the mountain by 6am... and then we're not home until 6pm... where we then eat and sleep the sleep of the dead until 4 the next morning... so no videogames from Nov-April)). But yeah... in a 12 hour day, he's actually sitting for maybe 4 of them tops... and 1-2 hours of that is videogames in the morning. So it's not like he's been sitting in school for 7 hours, and then also sitting doing homework, and then also sitting during video games, and then also sitting for car trips, and then also sitting meals. We're an ACTIVE family, and on average about 8 hours a day is spent either outside or doing very active things inside (like gymnastics). So I have no problem with kiddo playing games (video, or board, or computer) for a couple hours a day. But, for ME, it's all about balance.
How it works with kiddo is that he wakes up, makes his own breakfast, does his chores, and then can play video games (if he wants) until 15 minutes before school starts at 10am.
Like LeeLee, if there is at ANY point attitude/ rudeness the xbox or computer not only gets shut off right then, but it stays off for at least 36 hours (aka all of the rest of that day and all of the next day). Same token, if he gets obsessed about it... it gets shut off.
The thing is though, the same rules apply with everything. He doesn't "get" to be rude about anything. If he snaps that someone is in his light when he's reading instead of asking them politely to move, the books go away. If he's mean at the park, the park "goes away" (aka we come home). If he's wrapped up in his math and won't eat, his math goes away. If he's playing outside and won't come in when it's time... I don't just let him stay there. He comes in <laughing> "because I said so" ;)
Rudeness is hitting someone without using your fists. And like real hitting, it's a useful skill to know, but it is NOT tolerated under ordinary circumstances.
CAN playing video games a couple hours a day be harmful? Absolutely. But it doesn't HAVE to be.