Sales of boxed product in the UK - video game consoles, accessories and software - continued to decline in 2011, falling another 13 per cent to £2.520 billion, compared to £2.875 billion the previous year.
Entertainment software, PC and console game sales dropped 7 per cent to £1.43 billion, with 51 per cent of annual sales generated in the fourth quarter - Activision's Call of Duty: Modern Warfare 3 generated £83 million in its first week alone.
Console software sales amounted to £1.35 billion during the 12 months, with growth coming from Microsoft's Xbox 360 and Nintendo's 3DS. Console hardware sales generated £646 million.
The decline of boxed product is no surprise, with sales falling dramatically over the past four years, but the figures released by UKIE once again do not include any mobile, DLC, social or second-hand data.
Accessories for PC and console games were down 17 per cent to £454 million, with motion control devices making up 27 per cent of revenue.
Despite the falls, UKIE was as optimistic as it was last year, pointing out that the decline wasn't as bad as anticipated.
"In a year when overall consumer spending was down, 2011 proved to be a better than expected year for the UK's boxed-product games market," offered UKIE chairmand Andy Payne.
"Helped by the launch of many top quality titles, particularly in quarter four, total software sales of £1.42bn was better than many predicted"