From Guitar Hero to Wii Fit and Grand Theft Auto, Britain has become a nation of gamers - and that means not only teenage sons hogging a console or a keyboard but entire families fighting for the chance to play.

Unaffected by piracy and able to maintain premium prices of more than £40 for new releases, the games industry was easily the most successful entertainment business during 2008, with sales of computer games soaring 23 per cent to a record £1.9 billion.

According to Mike Rawlinson, the managing director of ELSPA, the computer games trade body: “What we have seen is the market broaden. There is a new category of family games - Mums, Dads and children playing on a Wii - or older people playing games like Brain Training, which they may not consider a game but which is interactive entertainment.”

Moreover, the gap between computer games sales and music sales has never been wider. Music sales are expected to have fallen by up to 10 per cent to about £1.33 billion last year. DVD sales also slipped, hurt by supermarket discounts. Sales were down 0.4 per cent to £2.4 billion last year, in spite of the record success of Mamma Mia!.

Wii games on the motion-sensing Nintendo console notched up £481 million worth of sales at the tills, up by 112 per cent, overtaking Microsoft's Xbox 360. Sales of 360 games totalled £443 million, up 38 per cent, while games for Sony's PlayStation 3 reached £334 million.

The demand for games is so great that the overall entertainment market will be ahead in 2008 - at about £5.63 billion, versus £5.39 billion last year - despite the economic downturn, the collapse of Woolworths and the descent of Zavvi into administration. Their problems are estimated to have reduced demand for DVDs at Christmas by about 3 per cent.

Kim Bayley, director-general of the Entertainment Retailers' Association (ERA), said that Woolworths' demise reflected its own difficulties, not wider industry problems. “Woolworths was caught between trying to compete with supermarkets on one hand and specialist retailers on the other. Zavvi's problem was that it was caught in the Woolworths collapse, because it was supplied by a Woolworths distributor,” Ms Bayley said.

The ERA believes that the overall entertainment market will grow again in 2009. “I don't see any reason why consumer demand will alter, although growth may flatten out. Entertainment has always done well in downturns,” she said.

Album sales volumes increased slightly in the fourth quarter, in spite of the recession and Woolworths' troubles. The number of albums sold in the period was 49.8 million, ahead by 0.9 per cent, helped by Take That's The Circus. However, price pressures mean that the value of sales is expected to be lower. Asda sold the Take That album at £7, below the wholesale price charged by Universal Music, the record company.

Lavinia Carey, director-general of the British Video Association, said that the DVD market could return to growth in 2009, as consumers switch to Blu-ray high-definition DVDs, which cost a few pounds more. Blu-ray DVD sales were up 316 per cent at £65.7 million, with 3.75 million discs sold.

“We think that this year 17 million Blu-ray discs could be sold,” she said.

That's entertainment

Computer Games

Games software
Total games sales £1.9 billion (+23%)
Wii £481 million (+112%)
XBox 360 £443 million (+38%)
PlayStation 3 £334 million (+115%)
Nintendo DS £481 million (+17%)

Games Hardware

Consoles £1.42 billion (+14%)
Peripherals £549 million (+82%)

Source: ELSPA/GfK Chart-Track

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