Dusseldorf Computer and video games remain in high demand in Germany. After high growth during the pandemic, sales increased by one percent to around 9.9 billion euros in 2022, as the German industry association Game announced on Wednesday. That is more than is generated in Germany with films, books and music – the offers that compete with games for the available free time and at the same time have the highest intersections.
Demographically, too, gamers are moving further into the middle of society, as can be seen from the association figures based on GfK. Women make up almost half, the average age is now 37.5 years, and 80 percent of the players are older than 18 years.
Despite the good figures for the industry, there is a problem: only a fraction of the proceeds goes to Germany. In the past it was less than five percent, says association head Felix Falk. In the past year, the number had not been collected at all. Large Japanese companies like Sony, Nintendo or Bandai Namco do the business, and large parts also flow into the USA (EA, Activision Blizzard, Microsoft, Take Two).
German games not within range of “Call of Duty”, “Fifa” or “Pokémon”
In relation to Germany, Falk speaks of a “medium-sized character”. Away from the sales machinery of the large corporations, there are definitely independent German games that ensure good reviews and respectable success. With Gamescom, Germany also has a leading international trade fair for gaming and pop culture, including influences from comics, anime and manga.
Only the “blockbusters” are missing – games that dominate the sales charts on the international market. Last year, these included the football simulation Fifa, the war game series “Call of Duty”, the latest Pokémon releases and the role-playing game “Elden Ring”.
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The whole of Europe is having great difficulty keeping up in this high-tech industry. Even the largest European manufacturer Ubisoft, which maintains a location in Düsseldorf, has only a few such plannable blockbusters on offer. This makes Germany in the current wave of consolidation in the industry, led by the antitrust controversial purchase of Activision Blizzard by Microsoft, only a target – not a player.
The head of the association, Falk, gives hope for the home location because of the development in Poland. There, the game developer CD Red has become an internationally successful provider, “The Witcher” became a pop culture phenomenon via the Netflix series of the same name.
“We see the potential for blockbusters,” says Falk. “However, it is a long way to the international top five”. The association therefore has high hopes for games funding from the Federal Ministry of Economics. After some quarrels about an application freeze around the turn of the year, 70 million euros are planned for the current and the coming years, “through non-partisan efforts”, as Falk emphasizes.
Games market stable at a high level – games funding should help in the long term
In its own strategy paper for the funding concept, which is initially planned for five years, the association even puts the need at 100 million euros a year. “The funds are increasingly being exhausted, the funding volume must grow with the project volumes,” Falk renewed the call for more funds on Wednesday.
The number of start-ups is already increasing – Falk speaks of a quarter more – and the number of jobs created. Last year more than 11,000 people were employed in more than 780 companies in the industry.
Sales are no longer growing as strongly as during the corona pandemic. Especially when it comes to hardware, i.e. computers, consoles and accessories, most consumers are currently still supplied. A fact that is also depressing the growth rates of computer manufacturers.
Gaming is no longer just a youth phenomenon.
(Photo: Game Association)
However, Falk sees German development studios and publishers in front of a leap if the funding pushes production. Data on the funding effect is currently being collected: “But we will only see the effects first, a game needs several years of development before it can be sold,” he says.
In the long term, the association wants a different path for Germany anyway. “The majority of international gaming locations work with tax breaks as a subsidy,” explains Falk, “and we also demand that.”
In-game purchases and mobile phone games are becoming more important – “silver gamers” in demand
However, a look at the sales development also shows that the industry’s income is increasingly decoupled from pure games and hardware sales. A key sales driver are so-called in-game purchases, i.e. additional digital content acquired in a game, such as new outfits for game characters. These purchases account for 5.5 billion euros in the German market, and for games for mobile devices these payments account for 99 percent of sales.
This is not bad news for game developers: The Hamburg company Innogames, for example, currently the largest German developer, has now exceeded the billion mark in sales over several years with comparatively few games.
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Cloud services are still a trend, even if Google and Telekom recently stopped trying. Amazon and Netflix are trying to win players as customers. And individual manufacturers such as Microsoft, Sony, but also the graphics card manufacturer Nvidia are trying to steer players into subscription models.
There is definitely plenty of potential in the German market. According to GfK data, 58 percent of six to 69-year-olds play, with the older gamers known as “silver gamers” becoming increasingly important in the mobile market.
A representative survey by market researcher Appinio sees the proportion of gamers in Germany as even higher: According to this, 86 percent of adults play at least occasionally, and 43 percent every day. According to this survey, the most popular platform: the mobile phone, at 83 percent.
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