Sales in the UK for videogame hardware dropped 32 per cent to £256 million in the first half of 2010, from £378 million last year.
Total sales for all videogame software was also down by 10 per cent, from £592 million to £533 million, according to data from Chart-Track, ELSPA and ISFE.
Overall total gross sales generated in the UK during the first 26 weeks of 2010, including games, hardware and accessories, was £963 million, down 16 per cent from £1.143 billion in 2009.
The data does not include any figures from PC and console digital distribution services, nor from the second hand market.
"UK consumers are still facing economic uncertainty and everyone is looking to how they can make savings, which has naturally impacted on the entertainment industry as a whole," commented Michael Rawlinson, director general of ELSPA.
Although unable to supply any data on digital distribution, ELSPA did acknowledge its significant contribution to the games landscape.
"UK consumers are getting their gaming entertainment now in a variety ways," said Rawlinson. "Consumers are increasingly downloading videogames from websites, and are also increasingly playing games not only on consoles, but also on their mobiles or through social networking sites, such as Facebook.
"This is proof that interactive entertainment is expanding way beyond its traditional boundaries."
Despite the overall decline, ELSPA also said that the three current generation consoles – Wii, PlayStation 3 and Xbox 360 – saw a combined increase in sales over the first half.