Sales Revenue of German Game Developers Failed to Keep Pace with the Strong Growth of German Games Market

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The total sales revenue of game developers in Germany failed to keep pace with the strong growth of the German games market in 2020: although revenue from games from Germany increased, it did so at a slower rate than revenue from games developed abroad. The result is a slight decline in the market share of German-developed games in the domestic market. Whereas German game developers captured €4.93 of every hundred euros spent on games in Germany in 2019, their corresponding share in 2020 was just €4.17. These figures were published by game – the German Games Industry Association. The data is based on surveys conducted by the GfK Consumer Panel, GfK Entertainment and App Annie, and on game’s own market surveys and monitoring.

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A closer view shows significant differences in the performance of the individual market segments. The market share of game apps for smartphones and tablets rose from about 3 to nearly 4.1%, while the revenue share of German-developed games in the submarket of games for PCs and consoles dropped from around 1.9 to 1.3% within one year. Online and browser-based games registered a much sharper decline, with their domestic market share plummeting by more than half – from 17.6 to 7.2%. The inability of German-developed games to benefit more strongly from the boom in many areas in 2020 is in large part due to underlying market conditions in Germany that remain more difficult than those in other countries.

The first effects of the games funding programme, such as the increase in employment in the core labour market by 8%, are already evident. However, more comprehensive positive effects will only become apparent with a delay. In addition, the games market is strongly hit-driven and the number of especially successful games has an outsized impact on total revenue. The larger and more diverse the German game development landscape becomes in the future, the less influence individual studios or titles will have on the development of sales revenue overall.

“The development of the games market in 2020 was unique and has brought many games studios forward both internationally and in Germany. Overall, however, we as the German games industry have unfortunately not yet been able to profit enough from the historic leap in growth on our home market. We are not yet strong and broadly enough positioned as a games location. Although the nationwide games funding is already showing initial effects, such as the increase in employees in the core labour market, the full effect will only unfold in a few years. And even that will only succeed if we continue to work on the competitive conditions in Germany. The federal government’s games strategy points the way for this with topics such as skilled workers, digital infrastructure, start-up support, digital education and esports,” Felix Falk, Managing Director of game, said.

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German Games Market: Big Jump in Sales Revenue in 2020

The German games market recorded a strong jump in sales revenue in the Covid-19 year 2020: total sales revenue of around 8.5 billion euros was achieved in computer and video games and associated hardware, as already reported by game. This is an increase of 32% compared to the previous year. Sales of more than 3.2 billion euros were registered with games consoles, gaming PCs and the corresponding peripheral equipment. This is an increase of 26% compared to 2019. The submarket for computer and video games saw even stronger growth, with revenues of 5.2 billion euros achieved through game purchases, in-game and in-app purchases, subscriptions and charges for online services. As a result, this part of the market managed to grow by 36% compared to the previous year.

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