Handheld sales fell by 31.3%, while home console sales were down by 34.1% year-on-year, according to data obtained by UKIE/GfK Chart-Track (via MCV).
Combined, console sales were down 33.1% in 2012, despite the release of the Wii U, PS3 Super Slim, PlayStation Vita and 3DS XL.
The Xbox 360 was the year's biggest-selling console, but sold fewer units than in 2011.
It is speculated that tablet and smartphone sales may have impacted the figures, particularly in the handheld market.
The news comes after it was revealed that sales of CDs, DVDs and boxed video games were down 17.6% on 2011.
Digital sales of films, music and video games, however, exceeded £1 billion in the UK in 2012.
GAME and Comet both slipped into administration in 2012, although the former remains in business following an OpCapita takeover.