UK retail game sales are "half of what they should be", an analyst has claimed.
The UK games retail market is 25 per cent down compared to last year, according to a report by MCV.
2012's major new games are selling between 10,000 to 48,000 copies during their first week on sale, sources told MCV. Last year big games were selling 35,000 to 80,000 copies.
The first UFC game outsold the UK's current number one game, UFC 3, by 3:1 during the same period, MCV reported.
"We are trying to understand it, but everything is selling well below what it should," a publisher said.
"It is an absolute nightmare. I'm not making half the money back I'm spending on marketing."
Why is this happening? Don't blame specialist retailer GAME, which has been unable to stock some recent new releases.
"There are some stock shortages at retail, but I don't think that's what's causing these figures," the UK boss of an unnamed Japanese publisher said.
"The big games of last year are available cheaply. But also consumers don't want to spend money, and we as an industry are not giving them any reason to change their minds. I will be watching Mass Effect 3 and Syndicate very closely."
GAME Group Marketing Director Anna-Marie Mason told Eurogamer this week's Vita launch was vitally important for the UK games industry.
"The traditional packaged goods market, year on year, has been in decline," she said. "Even at our most busy period last year, as an industry, that market shrunk, and it shrunk significantly."
In a separate MCV report, Chart-Track, which releases UK sales data, said boxed retail still accounts for 70 per cent of the UK software market - what amounts to a Ł1 billion industry.
MD John Pinder said publishers "would have bitten your hands off" ten years ago for the sort of sales figures posted today.
He stressed the importance of the industry managing the transition to digital "very carefully" and called on publishers to "learn from the mistakes of the music industry".
"Hopefully games will learn from that and manage its transition in a way that doesn't destroy its big revenue area - which is boxed retail," he said.
"Right now we have the perfect storm. The appalling state of the economy combined with the end of the console lifecycles."