The study, hailed as the first of its kind in Australia, carried out a total of 1397 interviews, including 344 with children aged between eight to 12.
About 40 per cent of them said they don't have anyone to play with while 55 per cent say they'd like to spend more time playing with their parents. 45 per cent said they were not playing every day.
The MILO State of Play study, which also interviewed 733 parents and 330 grandparents, found that more than 94 per cent of them believed play was essential for child development.
But it is still rapidly falling off the list of priorities, said child psychologist Paula Barrett.
"The longer we de-prioritise it, the more likely we are to have unhappy and inactive Australian kids which are more likely to be anxious and depressed, resulting in a raft of social problems in adulthood," she said.
Dr Barrett said unstructured, active play was essential to help children learn important life skills, develop imagination and creativity.
"This finding highlights a concerning yet common misperception that many parents share - they dont think that kids need to play regularly after the age of eight," she said.
"In reality, active play is extremely important for eight to 12-year-old children as it is a critical development stage."
Dr Barrett also warned that parents and children could miss out on the opportunity for important bonding time that happens during play.
"Interestingly, kids are actually calling for parents to join them at playtime," she said.
The study, carried out by ii Sweeney Research, said a lack of inspiration, time pressures and an over-reliance on technology were the common barriers to play time.
Almost 40 per cent of the children surveyed said they turned to electronic devices when they had run out of ideas for play.
The study found 47 per cent of play time for kids was now spent watching TV, playing video games or on electronic devices.
What do you think of the research findings? Do they surprise you?