The issue seems to be your feelings about his behavior, not whether he's actually using the game console you got for him or not. You seem genuinely perturbed in your posts, you say his behavior hasn't been great lately, unless your son has pulled a Veruca Salt stomping his feet telling you that the gift sucks, is horrible, and hates you do you think maybe you might be taking two separate issues and making them one?
What I'm hearing when I read your post OP is that your feelings are hurt that your son asked you for a nice, pricey Christmas gift which you were able to get for him. Now that Christmas is over however, something you thought would bring your son a good amount of fun and get quite a lot of use sits quietly on the shelf. My feelings would be hurt too - anytime you buy a nice present for someone you love that isn't used stings badly, but I promise you that your son isn't trying to hurt your feelings. At seven he's not thinking "Wow, this cost a lot of money, I should really make sure I get the most out of this to show how much I appreciate the gift!" All he's thinking is "I thought this would be easier/cooler/different, but I'm bored so what should I do....I know! I'll play the game I already know I can play and enjoy". A console and 2 games is not only expensive but a really nice present. Unfortunately when you have just 2 games to choose from and either both are too difficult, or one is too difficult and the other not very fun it puts you in a position of "Well, what now?" Full disclosure - I'm a 32 year old woman and I love video games (I'll explain a bit more later) so I actually know what it's like to be in that situation right now - as an adult. The difference is that if I grow tired of a game or dislike it I simply go to the game store, trade in what I know I won't play again and get something new. Or I go online and download a game from their online store. The point is I have many options where your son has two and for whatever reason is not enjoying them. Again, I promise it's not about being an ungrateful brat, he's just a young boy whose number one Christmas wish didn't turn out like he imagined.
You say he's acting up, or misbehaving - that is obviously unacceptable but please try and make sure your punishment fits the behavior. If it's talking back or misbehaving in school - address that, don't sell his console. In his mind it will seem unfair (which it sounds to be) and will be a negative memory he'll have for life.
What's sticking out to me us you don't know WHY he isn't playing. Talk to him, ask him why, maybe ask if he wants to exchange the games for something new? Just a thought.
So as I previously said - I'm a big video game fan and have been since I was a 7 year old girl sitting with my dad while we played video games together. They're hands down my most treasured childhood memories. So while I DON'T believe in plopping your child down in front of a computer or console and saying have fun - I think if you were to find a game YOU might like to check out (there are actually a lot of non fast paced, zero violence, user friendly, easy to learn titles out there. Animal Crossing comes to mind...) and if he were to walk into the room and see mom enjoying his really cool Christmas gift? I'm sure it'd peak his interest! That may be a lot to ask, but I know from experience as a child just starting to play video games...you're just learning your hand/eye coordination and muscle memory which can make failing at a video game especially frustrating because you're physically incapable in your form and at your current mental development state it's something that "just keep practicing" can only help SO much. I can sincerely say it was so nice to have my dad beside me to encourage me not to give up when things got hard, give me advice on how to improve, and then if it was truly beyond my level and I hadn't already asked him for help, he'd ask if I wanted help and I'd always say yes please. After watching him fail a few times before getting past whatever I was stuck on, I'd feel better and then ask to watch him play for a while. We'd take turns even when I wasn't stuck but it was so nice having my dad take interest in my hobby, cheer me on when I struggled, then step in and help me when I needed. Had I been left to the games myself I would have given up in frustration - not sure if I'd return, but you can only fail so many times before you become demoralized. So maybe picking up a game of your own will never happen, why don't you ask your son "Hey son, I was looking at the Nintendo and I thought Game A looked really interesting! Will you show me?" If he says no, ask him why, if it's too hard maybe you CAN jump in for a second and help him :)
I'm against using video games as babysitters, but utilized as a way to bond with your child and encourage things like good sportsmanship, knowing when to take a break, teamwork, etc? I'm all for it! So think about the situation and proceed from there - just try not to speculate on your son possibly being ungrateful when you're upset, take some time and when you feel ready just talk to him :) I know I built a lifetime of trust and respect for my dad that all started with a little video game time as a child. If your son learns now that he can talk to you and be honest "This game isn't fun" without you getting angry "Why aren't you enjoying it? If it's too hard or just not enjoyable let's sell it back and look at getting a game you'll enjoy" you could have amazing communication for life. I also recommend going with a gaming shop that buys/sells used games - I live in the US but we have Gamestop where I can buy a used game at a fraction of the cost and sell it back when I'm done or get a $15 membership and basically play as many games as I want - and as long as I bring them back it costs practically nothing compared to shelling out $60 every time for every game.