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The U.K. consumer games market was valued at £7.16 billion ($9.4 billion) in 2021, a growth of 1.90% from £7 billion in 2020, according to the annual valuation report released by trade body, the Association for U.K. Interactive Entertainment (Ukie).

The sector grew a record 30% from £5.35 billion in 2019 to £7 billion in 2020, but that was fuelled by a surge in demand due to the COVID-19 pandemic.

Game hardware sales grew 17.4% to £2.66 billion in 2021, driven by a bump in sales of console hardware like Sony’s PS5, Microsoft’s Xbox Series and Nintendo’s Switch. Virtual Reality hardware sales soared 41.9% to reach £183 million in 2021.

The consumer game software market was valued at £4.28 billion in 2021, a 6.32% decline in spend from 2020, but a growth of 11.4% from 2019’s £3.84 billion.

Spend on digital console games declined by 5.59% to £1.65 billion with digital PC revenues down by 7.02% to £620 million. The Ukie attributes this to the lack of major releases. The sale of physical games also fell by more than 20%. Mobile game revenues were steady at £1.46 billion.

Sales of toys and merchandising was the biggest factor in the growth in games culture spend, increasing by 33.6% from the previous high of £119.6 million to £159 million, with “Pokemon” being the fastest growing video game related property.

The biggest decline was in the film, TV and soundtracks category, which plummeted 82.6% to £3.98 million in 2021, with the market suffering from reduced box office takings and a limited number of releases based on video game IP. The report forecasts an uptick in 2022 as the sequel to 2020 hit film “Sonic the Hedgehog” releases this week.

Ukie CEO Jo Twist said: “The U.K. consumer games market has consolidated effectively following significant growth during the COVID-19 pandemic. The U.K. is a nation that loves its video games and we should be proud of the positive contribution this sector makes to the economy, to our culture and to wider society.”

The valuation takes place every year ahead of the start of the London Games Festival (Apr. 1-10) and is compiled with the support of ABC, the BFI, GfK Entertainment, Kantar, OCC, Omdia, Nielsen and NPD, alongside the Ukie.