In what ranked as a poor month in overall console sales, analyst group NPD reports Microsoft's Xbox 360 outsold Nintendo's Wii console in February. In doing so, the Xbox 360 claimed the top spot in U.S. monthly sales, a feat it hasn't achieved in over two years.

Despite Microsoft's strong showing, it was a pretty bad month for consoles. Combined sales for software, hardware, and peripherals came out to $1.26 billion, with console sales slumping 20 percent to $426 million.

"Honestly, I had expected the industry to perform somewhat better this month," said Anita Frazier, a games analyst at NPD.

Not surprisingly, Nintendo's DS dominated the handheld gaming space, selling 613,200 units compared to Sony selling 133,400 PlayStation Portable units.

As for the games people are playing, Take 2's "Bioshock 2" topped the sales chart with 750,000 copies across all platforms, and 562,900 for the Xbox 360. "New Super Mario Bros." came in second with 555,600 units, and "Call of Duty: Modern Warfare 2" slipped into third place with 667,100 units, now the third best selling game of all time with lifetime sales approaching 10 million units.

Nintendo's Wii console is starting to grow up. No, you still can't watch Blu-ray movies, or even standard DVDs, on the game console, but the best selling (and least expensive) current-gen console is going to integrate Neflix's online streaming video service.

Netflix is already available on both the Xbox 360 and PlayStation 3 consoles, and up to this point, Nintendo has been content to focus solely on gaming. According to a report in The New York Times, however, Nintendo may be feeling the pressure to compete on a larger scale than just console games, which are having to contend with a rise in cheap (smartphones) and free (social networking sites) gaming alternatives.

"You have to wonder if people are going to buy prepackaged $60 videogames in the future," said Mark Mahaney, managing director for Internet research at Citigroup. "If you are a console maker, you better quickly hurry to add more functionality and features to your console."

Wii owners will need a broadband subscription and have at least a $9/month Netflix subscription to enjoy the streaming service, which is a better deal than Xbox 360 owners get, who must also have an Xbox Live Gold membership.

The service will be available this spring.