Does online console  multi-player gaming use up as much as or less bandwidth than streaming videos on Netflix?

Probably slightly less. I’d say downloading a game uses about as much as Netflix, but most games seem to require 50kb/s plus, where Netflix or other streaming videos will use closer to 150 or 200 plus to work right.

Netflix will modify the quality/ amount of bandwith it uses per quality of signal and internet connection. Even though video games can do this, it causes lag. Which means gaming consoles use up more bandwith.

No.

Netflix requires sending all of the information, including the video stream which is what takes up most of the considerable bandwidth.

Online gaming runs much of that stuff client-side; you already have the graphics on your machine and merely needs commands on how to position the stuff that is already in your computer/console.

For example, when watching video on my computer, I have seen my 7Mbps DSL connection running all-out (depending on the quality/resolution of the stream), yet when I play World of Tanks, my network monitor barely blips to one-twentieth that.