Computer games have become more popular than music and video, according to Verdict Research.
The company said total spending on games in 2008 will reach £4.64bn, that's a 42 percent rise on last year and is more than the total outlay on music and video, which is expected to hit £4.46bn.
Malcolm Pinkerton of Verdict Research told the BBC: "The music and video market is not just suffering from a slowing of growth but a massive transfer of spend to online".
When it comes to online music and video sales, it's the CD and DVD market which has grown rather than digital downloads, which still make up only four percent of the market.
However, the Entertainment Retailers Association (ERA) disagrees and says in 2007 games software sales stood at £1.7bn, compared with £1.4bn worth of music sales and £2.2bn generated by video sales.
Steve Redmond from the ERA said: "Our prediction is that games will overtake video by the end of this year, but not music and video combined".