More game developers than ever before are working on games that are distributed online rather than in high street shops.

As many as 77 per cent of UK games companies are already working either exclusively or predominantly on network gaming.

A total of 35% of UK video game sales were digital in 2012, up from 27 per cent in 2011, according to trade industry body TIGA.

Similar increases are expected this year and next, it says.

The results are from an extensive survey of the UK’s games businesses which shows developers have rapidly adapted to the ‘death of the high street’.

Only 23 per cent of UK game companies now work exclusively on retail games.

TIGA also found:

  • 94% of independent studios that started up in 2011 – 2012 are focused exclusively on network gaming
  • Across the UK games industry as a whole, 77 per cent of British games companies now work either exclusively or in part on network gaming – a rise of 10% over the last year.
  • Continuing a five year trend, the UK games retail market fell again in 2012, generating £1.6 billion, a 17.4 per cent fall from 2011.

Dr. Richard Wilson, CEO, of TIGA said: “The research shows the UK games development industry is already well ahead of the curve when it comes to digital distribution.

"Over nine-tenths of new UK game companies are working exclusively or in part on network gaming, such as mobile, massively multiplayer and social gaming.

"When you consider that digital video game sales grew 7.7% in 2012, making video games the most valuable digital entertainment sector in the UK, it’s clear how hard British developers are working to future-proof an industry that will become increasingly important to the UK economy.”

Patrick O'Luanaigh, MD of games developer nDreams, said: "The figures clearly illustrate the rapid movement that has happened in the UK over the last few years towards digital gaming and away from physical retail game development.

"The UK has a rich history developing some of the biggest retail games of all time, but sadly too many of the famous UK studios no longer exist. It's great to see so many exciting new start-up studios focusing on digital platforms."