Germany′s video game industry seeks help amid boom | Germany| News and in-depth reporting from Berlin and beyond | DW | 26.08.2018
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Germany's video game industry seeks help amid boom

Germany's video game association has warned that without state support, developers stand little chance in a booming industry. But the government could be looking to change that. DW examines the situation.

The video game industry is booming. Last year, global video games sales hit $121.7 billion (€104.6 billion), according to Amsterdam-based business intelligence firm Newzoo. That represented 14 percent growth compared to the year before.

In Germany, the video game industry is mirroring the trend, growing nearly 10 percent last year. And yet, all is not well.

Sales of German-made video games shrank last year by nearly 8 percent. That's significant when taking into account that Germany is the fifth-largest marketplace for the industry and German-made games made up only 5.4 percent of all games sold in the country last year.

'More expensive' to produce

Germany's industry association has pointed to a lack of state support for game developers based in the country, saying they receive little to no assistance.

"We cannot reach a level playing field worldwide if we don't have political help," Felix Falk, director of the German Games Industry Association (GAME), told DW. "Other countries are providing much more support to help and fund the games development sector."

"The result is that in Germany, making a game is up to 30 percent more expensive than in France, England or Canada, for example. We need help to not only be the fifth-largest market for consumption, but also to be a bigger market in terms of production."

Infographic showing domestic market share of games vs. German-developed games

Berlin promises

But that could be changing. Following months in which Germany was without a government, German Chancellor Angela Merkel's Christian Democrats (CDU), the Christian Social Union (CSU) and the Social Democratic Party (SPD) in March formally agreed to build a government together.

Part of their coalition agreement included support for the industry. The deal stated that "with a view to comparable European country subsidies," the government would support developers "to strengthen Germany as a developer location and make it internationally competitive."

"They promised to get the fund done as soon as possible," Falk told DW. "If that happens, then we can establish a level playing field, and over the coming years, German game developers will have a chance to grow significantly."

Read more: How Germany is depicted in video games

German Chancellor Angela Merkel at Gamescom

In 2017, German Chancellor Angela Merkel attended Gamescom, one of the world's largest gaming conventions, hosted in Cologne

New horizon

But game development isn't the only sector in Germany hoping to stake its claim on the global industry. Berlin-based GamerToken, a startup focusing on blockchain technology, is hoping to revolutionize the gaming ecosystem by creating a new way of managing in-game content with trust and transparency.

"By harnessing the power of blockchain technology, we have created an API that allows game developers to enhance their in-game economies by creating items that are unique, verifiably scarce and provably authentic," GamerToken spokesperson Benjamin Robson told DW.

"This creates an entirely new revenue stream, and enables authentic collectors items for famous eSports players and fans."

Read more: The blockchain revolution comes to climate action

Robson noted that one of the challenges has been shaking off some of the flak blockchain technology has received since Bitcoin prices collapsed after peaking at nearly $20,000 (€17,200) per token last year.

But with microtransactions — or micropayments for virtual goods — becoming an increasingly integral part of video games, comprising €659 million ($767 million) of German video games sales in 2017, GamerToken's concept has its prospects.

Infographic showing value of global video games market

Bright future

Meanwhile, eSports has grown from a "niche sport into a mass phenomenon in a short amount of time" in Germany, according to GAME. Forecasts put eSports business revenue in Germany at €130 million ($150 million) by 2020, according to New York-based consultancy Deloitte.

Read more: Will German eSports be recognized as a sport?

With all signs pointing up, Germany is poised to ride the global growth trend surrounding the industry. However, it could be a downhill ride for developers without political support to compete internationally.

But GAME's Falk is optimistic.

"I think in 10 years' time, there will be many more games from Germany taking the top spot as the biggest blockbusters and most exciting indie games on the show floor," Falk said.

GAME director Felix Falk speaks at Gamescom 2018

GAME director Felix Falk remains optimistic that the government will move forward on supporting developers in Germany

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