Two thirds of British gaming companies are focusing exclusively on online gaming, according to a new study.

Research from gaming association TIGA has revealed that 67 per cent of firms are ignoring the retail sector altogether in favour of internet, mobile and social networking games.

The study also predicted that the online gaming sector is set to grow by 21 per cent every year for the next three years at least, whilst retail gaming will fall by over 3 per cent a year.  

According to digitalspy.co.uk, such rapid growth could be seen as a major threat to the existence of traditional gaming retailers such as GAME and HMV. Such stores could face a "gradual erosion," it was claimed.

Patrick O'Launaigh, who is chairman of TIGA's self-publishing committee, was highly supportive of the anticipated trend.

Discussing the figures with joystiq.com, he said: "Online gaming can deliver greater company stability and revenue sustainability for studios.

"This is because studios can circumvent traditional publisher business models and build relationships directly with customers. Network gaming businesses can create original games, retain their IP and attain greater financial stability."

Of all the gaming companies set up between 2008 and 2011,  just 29 per cent were focusing on producing traditional games to be sold by retailers.