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Kim Bayley, director of the ERA, blamed the slump on a weak year with few blockbuster hits.
"2012 was a tough year for entertainment due to a number of factors, but this sharp 25% shrinkage in sales of the biggest titles suggests that the quality of releases was at least partly to blame.
"Luckily 2013 has got off to a good start with Skyfall already selling more than two million copies - way ahead of last year's biggest-selling video, The Dark Knight Rises."
Skyfall, the latest James Bond film, is on course to beat Call of Duty's tally within just a couple of months of its release, the ERA said.
Sande's Our Version of Events was the top-selling music title by some considerable distance, aside from two "Now That's What I Call Music" compilations.
Other video games making a strong showing include Ubisoft's Assassin's Creed 3 - which shifted 886,198 copies - and Microsoft's Halo 4, with 753,489.
The chart also showed a strong showing for television series Mrs Brown's Boys.
The chart aggregates sales data from the Official Charts Company and GFK Chart-track to determine the year's standings.
/BBC/