The Xbox should be available in the UK in March

The UK is now the third largest market in the world for computer games, after the US and Japan.

Roger Bennett, director general of ELSPA, said the industry had seen its most successful Christmas ever.

"The leisure software market was boosted by the launch of new consoles and fantastic games to go with them," he said.

"The dramatic uptrend in sales values confounds some analysts who thought the market had reached the end of rapid growth."

Profits

There is also a thriving home-grown software industry, with exports exceeding those for both British film and television, according to ELSPA.

Software retailer Electronics Boutique announced records profits this week and they credited the sales growth largely to the popularity of Sony's PlayStation 2 (PS2) consoles.

The chain said like-for-like sales grew by 47% at its 290 UK and Irish stores in the last five weeks of the year.

More than 1.7 million PS2 consoles have been installed in UK homes since the product was launched in November 2000, compared with 700,000 of the first generation PlayStations at the same time in the sales cycle, the retailer said.

Xbox

Last summer Nintendo's new Game Boy Advance (GBA) also helped increase sales of consoles.

It broke UK sales records, becoming the fastest-selling console ever.

About 81,000 GBAs were sold over its first weekend in June.

The popularity of the industry looks set to continue in the UK as Microsoft launch the Xbox and Nintento unveil the GameCube this year.