The popularity of the new BioShock 2 game may have been behind Microsoft’s sales of 422,000 Xbox 360s in February, an eight percent increase from a year earlier, according to NPD Group. Nintendo sold 397,900 Wiis and Sony sold 360,100 PlayStation 3 consoles in February.

The BioShock 2 game for the Xbox 360 and PlayStation 3 was released on Feb. 10 and sold 750,000 units. Of those, 75 percent, or 562,900, were for the Xbox 360.

“We’re excited about the biggest February in Xbox 360 history,” said Dennis Durkin, COO of Microsoft’s interactive entertainment business, in an e-mail. “We know consumers are hungry for our 2010 portfolio of exclusive blockbuster games, industry-leading online experiences over Xbox LIVE, and for the holiday release of Project Natal for Xbox 360.”

A Sense of Excitement

While BioShock 2 has created a buzz among gamers, so have sensing controllers. Microsoft’s Project Natal system will let Xbox players use body motions to control the game instead of pressing buttons or waving a controller.

Microsoft wasted no time in getting celebrities to praise Project Natal’s potential. Boxer Sugar Ray Leonard called the technology “amazing”; former NFL quarterback Willie Gault said it was one of the “most realistic game experiences” he has had; and pro beach volleyball player Misty-May Treanor said it’s great for someone who, like her, is in physical therapy.

This week, Sony revealed additional information about its own new motion-control sensor. Dubbed the PlayStation Move, Sony first provided details last June. The controller allows PS3 gamers to use an Eye web camera and a wand to detect motion.

The controller will be packaged as a starter kit with a PlayStation Eye, a PlayStation Move controller, and a demonstration disc. The black controller is similar to the Wii wand, developed in 2006, and will be priced below $100, according to Sony.

Nintendo Falls Behind in U.S.

Microsoft executives may be beaming with their new position in the gaming market, but Nintendo still leads worldwide. Nintendo has sold more than 67.5 million Wii consoles worldwide, compared with more than 39 million Xbox 360s and 33 million PS3s, according to NPD.

But that success does not come without challenges. Last month the U.S. gaming industry saw a 15 percent drop in revenue to $1.26 billion, according to NPD. The drop was a result of a 15 percent decrease in sales of gaming software and a bad month for Nintendo.

December was a record-breaker for Nintendo with 3.81 billion units sold. When that was followed by a 31 percent decrease in sales in January, analysts speculated Nintendo didn’t have enough inventory to meet demand. That was confirmed by Nintendo America President Reggie Fils-Aimé.

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Dear Nintendo, while I respect your president Reggie Fils-Aime’s decision to shrug off the Wii’s inability to do high-definition video as “no loss” in an interview with CNBC, I’m not sure you’re taking the long view.

And if recent HD usage survey results are accurate, you probably should be.

According to a November 2009 Knowledge Networks survey, 43 percent of people “watch HD programs every day,” up from just 26 percent in 2007. That’s a 65 percent increase in two years, significant enough to lead Knowledge Networks’ president to note “This sends a message to advertisers that HD is becoming the new norm for those with HD access across all program types.”

People apparently–and increasingly–want high-definition content. And you know what? Yes, only part of Netflix’s total catalog may be HD-ready today, but what…you think Netflix plans to wait for the Wii to catch up with an HD part? Care to wager how much Netflix’s HD library is going to grow in 2010 alone?

Think about your competition. Microsoft and Sony offer HD streaming content today. Both have deals with Netflix (Microsoft’s is integrated, but even Sony’s disc-based program includes the HD option). Yes, you need a fast connection to qualify for a high-def feed, and no, it still doesn’t look as immaculate as full-on Blu-ray (or for those of you who haven’t switched, HD-DVD–requiescat in pace). But it’s clearly a superior option, and for people slowly (or does that survey now imply ‘quickly’?) awakening to the perquisites of HD video, possibly even a deal-breaker.

Which means:

If you already have a 360 or a PS3, Netflix on the Wii isn’t a reason to buy one. If you have a 360 or a PS3 as well as a Wii, it’s not a reason to use the Wii (unless you want to service another room somewhere). And if you have none of the above but want to buy a Netflix compatible, HD-ready console that complements your existing high-def TV setup, your options are Microsoft or Sony, not Nintendo.

Reggie Fils-Aime’s response in that CNBC interview:

The vast majority of content that’s available for streaming on Netflix is not HD content, so there really is no loss for the Wii consumer, the fact that they can’t get any HD content through our system.

Accurate but shortsighted. As noted, Netflix’s HD development plans are hardly in stasis. But what’s worse, Fil-Aime has to go and conflate two spectacularly different forms of entertainment:

The consumer has voted, over 26 million consumers have bought a Wii. So the consumer is saying that the quality of the visual is not nearly as important as the overall entertainment, the overall value of that experience.

Earth to Nintendo: Movies aren’t games (last I checked, Netflix wasn’t streaming Mario or Donkey Kong). You don’t interact with a movie or TV show the way you do New Super Mario Bros or Wii Fit Plus. Video’s value is its visual content. And in that particular game, speaking as an unabashed videophile, HD matters–more each day.

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