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Games become the UK’s biggest entertainment category

Digital downloads and app sales surge, according to the Entertainment Retailers Association.

Games accounted for 40.2 per cent of the UK entertainment market in 2011, outselling both video (37.6 per cent ) and music (22.2 per cent ) for the first time in history, according to figures published today by the Entertainment Retailers Association (ERA).

Despite weak sales of console games, digital downloads and app sales propelled the UK games market to £1.93bn. Video sales totalled £1.8bn; music trailed behind at £1.07bn.

Kim Bayley, director general of ERA, said: “This is a dramatic time for the entertainment market. It is a historic development for the games sector to have overtaken video last year. Video has long been the biggest entertainment sector. Sales so far this year, however, suggest video is not going down without a fight.”

Online and mobile delivery now accounts for 31 per cent of the music market, 26 per cent of games and 5.4 per cent of video.

Bayley added: “Online and mobile are doing very well and this reflects the huge investment, much of it by retailers, in producing new products and services. Physical formats still account for the vast majority of entertainment sales – 80 per cent of albums are still sold on CD – but lack of investment and innovation in physical product means it is increasingly under pressure.”

Overall sales of games, video and music fell by 3.3 per cent by value to £4.8bn in 2011. Digital and physical products bought online or via mobile devices now account for 32 per cent of the video market and 45 per cent of games.

Bayley concluded: “Retailers know that innovation is key to maintaining consumer interest in entertainment. That’s why our members are investing heavily in new products and services. The real innovation gap is in the physical market, where our members buy finished product from film and music and games companies. We will continue to lobby them strongly to innovate, too.” 

Meanwhile, in yesterday's Budget, the Chancellor, George Osborne, announced tax breaks for the games, animation and TV production industries (taking effect from April 2013), in an effort to “turn Britain into Europe's technology centre”. The move has been welcomed by the industries and is expected to safeguard thousands of jobs.