In a sign that the industry is prospering despite global financial woes, the NPD Group, GfK Chart-Track Ltd. and Enterbrain Inc. report said that videogame sales grew by 15 percent in Britain during the period and eight percent in the United States.
Overall, sales of videogames in the three largest markets rose by just one percent during the three months ending September 30 as compared with the same period last year.
Analysts attributed the 21 percent decline in sales in Japan to a lack of popular titles during the third quarter and other factors.
"2007 was a banner year for the Japanese software market with the titles released in the third quarter of 2008 not being as highly anticipated as those released during the same time period in 2007," said Ricky Tanimoto, a global marketing analyst at Enterbrain.
"Also, software titles generally have stronger launch sales in Japan, which represent a large percentage of the total sales in Japan compared to the US and Britain," he said.
Tanimoto said he expected "overall video game sales in Japan this holiday season will not be greatly affected by the world financial crisis."
"New portable hardware systems like Sony's PSP-3000 and Nintendo's DSi will prove to be driving market forces in Japan throughout the 2008 holiday season," he said.
The UK market in particular is gearing up for a best-ever fourth quarter performance overall, "even under the well-documented financial climate," said Dorian Bloch, Business Group Director at GfK.
The top title in the United States during the third quarter was Madden NFL 09 from Electronic Arts, which sold 2.96 million units, followed by Nintendo's Wii Fit on sales of 1.28 million units and LucasArts' Star Wars: The Force Unleashed with sales of 1.42 million units.
The Wii Fit sold 460,000 units in Britain during the third quarter and 346,000 units in Japan.
Nintendo's Pokeman Platinum was the top-selling game in Japan in the third quarter on sales of 1.48 million units.