The Queen highlighted the importance of sport as a medium to help build communities and create harmony in her Christmas Day message to the nation.
The annual broadcast focused on how sports games and exercise can positively distance people from their day-to-day lives.
The royals are all keen sportsmen and women, taking part in sports such as polo and golf.
The Queen's granddaughter Zara Philips represented Britain as a three-day eventing champion, following in the footsteps of her mother the Princess Royal who was in the national equestrian team.
The Duke of Edinburgh, his son Prince Charles and grandsons Princes William and Harry have all played polo.
Addressing the nation the Queen said: "In the parks of towns and cities, and on village greens up and down the country, countless thousands of people every week give up their time to participate in sport and exercise of all sorts, or simply encourage others to do so.
"These kinds of activity are common throughout the world and play a part in providing a different perspective on life."
The Christmas Day message is normally recorded at Buckingham Palace but this year the Queen suggested Hampton Court Palace as an alternative - the first time it has been used.
The historic building's Chapel Royal was the venue and its vaulted blue ceiling, made for Henry VIII in the 1530s and lavishly decorated with gold leaf, appeared in the address.
Her speech was concluded with 12 choir boys singing the traditional Christmas carol "While shepherds watched their flocks by night".
The Queen spent almost 10 minutes receiving flowers from over 50 children at a Christmas Day church service in Sandringham, where over a thousand people turned out to catch a glimpse of the Royals.
Police collected bouquets from the children and put them into the Queen's car.
A major security operation was underway headed by police as the 10 royals, including the Queen and the Duke of Edinburgh, arrived for the annual service at St Mary Magdalene Church in Norfolk.
Zara Phillips was also absent as she was spending Christmas Day with her fiancé England rugby union international Mike Tindall. Autumn Phillips is expecting a baby so also did not make it.
The Princess Royal and her husband were not at the service and a royal spokesman was unable to explain why.
Police searched members of the public and at one point were seen speaking to a youth who had a long-lens camera.
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Children meet Queen
As the Queen accepted flowers from children, the rest of the royal party spoke to onlookers.
American Freedom Tansley, eight, from Cambridgeshire, and whose father Dennis serves at a base in England, was first to meet the Queen.
Anthony Yuenger, six, also American met the Queen. His mother Laurie, 29, said: "Anthony was with his brother Jeremy, but somehow they wandered out of the line.
"I think Jeremy was a bit unsure about what he was doing - he's only three. Anthony got back in the line and gave his flowers, then realised that Jeremy hadn't given his. So Anthony ran back, grabbed Jeremy's rose, then ran to give it to the Queen before she left."
Mrs Yuenger said her husband Shaun, 30, came from Fresno, California, and is an aircraft inspector at the United States air base in Mildenhall, Suffolk.
She said: "We've been here three years but he'll be posted before next Christmas so this was our last chance to do this."