Its official: Video games are saving the High Street

Video games were the shining light of the High Street last year – pulling the overall UK entertainment retail sector kicking and screaming to a five per cent increase in revenues.

Games software enjoyed a 21.1 per cent rise in annual sales in 2008 according to the Entertainment Retailers Association – as video revenues remained stationary and music sales plunged.

And ERA has predicted that games will finally eclipse revenues generated by video this year – to become the true king of entertainment markets.

ERA’s annual report for 2008, released this week, shows UK games software sales generated 2.1 billion in the year, narrowly smaller than DVD and video’s revenue sum of 2.3 billion. Both categories made almost double the cash generated by the music trade.

For games to enjoy double digit growth in a recession-hit market is quite astounding,” ERA director general Kim Bayley told MCV.

If we look at the first three months of 2009, the pattern of games sales growing and video remaining static is continuing. One would expect games to grow and video to remain broadly flat – meaning games will overtake or knock at video’s door by the end of 2009.”

And in what will be music to indie retailers’ ears, supermarkets’ share of software sales dipped in 2008, according to the ERA figures. Grocers’ annual unit share dropped from 11.2 per cent to 9.4 per cent; with value share down 11.4 per cent to 10.1 per cent.

Online retail was the biggest beneficiary, with unit market share up from 20.1 per cent to 26.4 per cent and value up 18.6 per cent to 24.6 per cent.

Excluding PC, console software sales jumped by a giant 27.1 per cent in 2008.

Wii generated the most cash with 481 million in software sales Xbox 360 created 443 million in the year, with DS on 366 million and PS3 on 334 million.