Background: Falls are the leading cause of fatal and non-fatal unintentional injuries in older people. In the community, 30% of adults aged 65 fall per year. The use of Exergames (active video-based exercise games) is a possible innovative, community-based approach to improve balance and function, and thus reduce falls risk. Objective: To determine the effectiveness of a tailored OTAGO based strength and balance Exergame programme for improving balance, maintaining function and reducing falls risk in older residents of assisted living facilities in the UK. Design: A two-arm cluster randomised controlled trial. Participants and setting Adults aged 55 years and older living in 18 assisted-living (sheltered housing) facilities (clusters) in the UK. Interventions: Tailored 12-week strength and balance Exergame programme, supported by physiotherapists or trained assistants plus standard care (physiotherapy advice and leaflet) versus standard care only. Main outcome measures: The primary outcome measure was balance at 12 weeks post-baseline, as assessed by the Berg Balance Scale (BBS). Secondary outcomes included: fear of falling, mobility, self-reported physical activity, falls risk, pain, mood, fatigue, cognition, healthcare utilisation and health-related quality of life; and self-reported falls over a 3-month period. Randomisation and blinding Clusters were randomised in blocks of two after participants were recruited and baseline data were collected. No blinding of those delivering or receiving the interventions, collecting or analysing data was possible. Results: Eighteen clusters were randomised (9 to each arm) with 56 participants allocated to the intervention and 50 to the control condition (78% female, mean age 78 years). Fourteen participants withdrew over the 12 weeks, mainly due to ill health, drop out rates did not differ per arm. Intention-to-treat analysis of respondents (49 Exergames; 43 control) revealed that balance was significantly improved at 12 weeks in the Exergame group; adjusted mean improvement in balance (BBS) of 6.2 (95% CI 2.4 to 10.0) and significant improvements in falls rate (p=0.001), fear of falling (p=0.007) and pain (p=0.02).The mean attendance at Exergames sessions during 12 weeks was 69% with a mean exercising time of 33 minutes/week. In the control group 12 (24%) participants fell 38 times over 3 months compared to 11 (20%) participants of the Exergame group who fell 17 times. The change in falls rates significantly favoured the intervention (incident rate ratio 0.31 (95% CI 0.16 to 0.62, p=0.001)). The point estimate of the incremental cost effectiveness ratio (ICER) was £15,209.80 per QALY. Using 10,000 bootstrap replications, at the lower bound of the NICE threshold of £20,000 per QALY, there was a 61% probability of Exergames being cost-effective. This rose to 73% at the upper bound of £30,000 per QALY. Conclusion: Exergames, as delivered in this trial, improve balance, pain and fear of falling and are an effective fall prevention strategy in assisted living facilities for older people. Health economic analysis suggests that Exergames represent a cost-effective fall prevention strategy. Clinical Trial Registration: Trial Registration ClinicalTrials.gov: NCT02634736 Funding Statement: This study was funded by Innovate UK through their SBRI programme. LM acknowledges financial support from the MRC Skills Development Fellowship (MR/N015126/1). The authors would like to acknowledge the contributions of Ms Kelly Banham, Ms Margaret Clarke, Ms Tina Duckworth, Ms Megan Lloyd, Dr Katie Thomson, Dr Calum Leask, Trafford Housing Trust, Pennine Care NHS Falls Service (Ms Debra Maloney, Dr Jay Chillala, Ms Angela Easdon), Mr Bibhas Roy, Dr Richard Deed, Prof Jackie Oldham, Dr Mark Pilling, Ms Joanne Thomas, Ms Bernadette O’Dowd. Declaration of Interests: Dawn Skelton is a Director of Later Life Training, a not for profit training company that provides training in delivery of the Otago and FaME Programmes with the UK, Europe and Singapore. No other conflicts of interest are declared. Ethics Approval Statement: Ethics approvals for this study were obtained from London - Camden & Kings Cross Research Ethics Committee, reference number 16/LO/0200.