It's an industry first, per entertainment retailers' org

LONDON — Video sales in the U.K. were overtaken by vidgames for the first time in 2011, according to the Entertainment Retailers Assoc.

With all sections of the market shrinking, video sales dropped 15% to £1.8 billion ($2.85 billion), while games sales shaded down by just 0.7% to £1.9 billion ($3 billion). Music fell 11% to just over £1 billion ($1.6 billion).

Figures are based on data from the Official Charts Company, GfK Chart-Track and IHS Screen Digest.

The relative strength of the games business is powered by digital sales worth £504 million ($797 million) in 2011. Digital music sales hit £333 million ($527 million), while digital video sales remain in their infancy at £97 million ($153 million).

Online and mobile delivery now accounts for 31% of the U.K. music market, 26% of the games market, but only 5.4% of the video market.

But ERA notes that video has fought back strongly in the first 11 weeks of 2012, with sales on physical formats worth more than twice those of games. Even when digital sales are included, video is still ahead so far this year.

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

With physical formats generally in decline, the only ones to register an increase in 2011 were vinyl albums (up 44%), Blu-ray (up 18.5%) and Xbox 360 games (up 3.3%).

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

Online retailers, led by Amazon, are grabbing an increasing share of the home entertainment market. Digital and physical product bought online or via mobile now represents 32% of the video market, 45% of games and 51.4% of music.

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