Titles like Grand Theft Auto IV could see games sales thrashing sales of DVDs and music CDs by the end of this year.
According to research by Verdict Research, games sales could overtake music and movie sales for the first time this year.
The retail analysts claim that video games are now the UK's most popular form of entertainment.
It is predicting that spending on games will rise by 42% to £4.64bn in 2008, with sales on music and video at £4.46bn.
Over the last 5 years, sales of music CDs have levelled off while video games have doubled.
And this is bad news for the highstreet, as those people who are buying CDs and DVDs are doing more and more of their shopping online.
"The music and video market is not just suffering from a slowing of growth but a massive transfer of spend to online", says Malcolm Pinkerton of Verdict Research.
But despite this, digital downloads still only account for around 4% of music and video sales.