In 2016, revenue generated by the boxed games market dipped by 16.4 per cent.
That's according to data from the retail trade body ERA, which – citing GfK figures – says that 776m was generated by software sales during 2016, down from 2015's 927.7m.
This is due to some titles underperforming compared to their predecessors, as well as sales of PlayStation 3 and Xbox 360 games declining.
Though physical revenue was down overall, ERA claims that physical handheld games sales were in fact up by 21.3 per cent. A large factor in this could be the success of Pokmon Go which served to drive sales of Pokmon Sun and Moon on 3DS.
While the physical software market is down, it's not all bad news. According to IHS estimates, video games digital revenue rose by 12.1 per cent for the year, from 1.9bn to 2.2bn. This means that digital constitutes 74 per cent of total games revenue. This includes both digital games sales and mobile gaming.
Overall the games market brought in 2.9bn, a rise of 2.9 per cent on 2015's figures.
Though not the fastest growing sector in ERA's data, video games brought in the most revenue, smashing that of video and music. Music made 1.1bn, while video made 2.3bn.
Unlike previous years, ERA has not released a combined chart of video, games and music due to the difficulty of getting accurate digital information for games and video. However, counting physical copies alone, FIFA 17 clearly beat Star Wars: The Force Awakens as the best-selling release of 2016, selling 2.51m units compared to the sci-fi film's 2.3m.
Given FIFA's higher retail price, the football title would have beaten Star Wars even with digital figures.
Overall, ERA says that with the additional of digital sales, revenue from music, video and games are 1bn higher than those seen four years ago.
In total, the UK entertainment sales market saw a three per cent rise, bringing in 6.3bn in revenue.
The music, video and games industries were understandably nervous about the advent of new digital services, but these figures provide resounding evidence of the benefits of our members' investment in innovation,” ERA CEO Kim Bayley said.
To have added over 1bn in new revenues in just four years is an incredible achievement. To put it another way, take away today's digital services and the entertainment market would be barely a third the size it is today."