Computer: Promoting German games: States criticize federal plans

There is growing concern in Germany's computer games industry that the gap to foreign competition is increasing due to a lack of government aid.

Computer: Promoting German games: States criticize federal plans

There is growing concern in Germany's computer games industry that the gap to foreign competition is increasing due to a lack of government aid. After the Game Association criticized the Federal Ministry of Economics' funding course, representatives from the federal states also made their discomfort clear when asked by the dpa.

The Berlin proposal for new funding rules would be “no tailwind for the industry,” said Bavaria’s Digital Minister Fabian Mehring (CSU). "I miss the serious will and full commitment to make Germany a gaming location internationally competitive." NRW Media Minister Nathanael Liminski (CDU) complained that the rules would not solve the problem of a lack of planning security. Hamburg's media senator Carsten Brosda (SPD) also expressed criticism.

The computer and video game industry is growing in the digital age. According to a market survey, Germans spent almost 5.8 billion euros on games last year, an increase of six percent. However, German games only play a minor role - according to an older estimate, less than five percent of industry sales come from games developed in Germany. There has been funding from the Federal Ministry of Economics since 2020. In 2023, 70 million euros will flow into the industry, and 50 million are planned for 2024. How much it will be in 2025 is unclear. Since May 2023, companies have not been able to submit new applications because the money is only sufficient to pay for applications that have already been approved - the funding is paid out gradually, year after year.

According to a study commissioned by the Federal Ministry of Economics, German games companies only receive just under a quarter of the funding usual in other countries. The head of the game industry association, Felix Falk, is calling for more support. "Without internationally comparable funding conditions, we have no chance of making Germany a leading market for games." But that is actually exactly the goal of the federal government, says the industry representative.

Contents of the key issues paper

The Federal Ministry of Economics recently presented key points for the future funding guidelines - the criticism refers to this paper. Among other things, it is about leaving the funding of small studios to the federal states and reserving federal funds for larger projects. In addition, subsidized studios should no longer be reimbursed at least 25 percent of their costs, but only 20 percent. This number can increase to the previous level through funding bonuses - for example if a game has additional functions that help people with disabilities. From Falk's point of view, the bonus rules make things unnecessarily complicated; in other countries it is easier. The proposal for funding rules does not offer the planning security that the studios need.

The Federal Ministry of Economics wants to say goodbye to supporting small game developments - only projects that cost at least 400,000 euros should be subsidized by the ministry program. “That would be a bitter blow for small studios,” says game boss Falk. They would only be entitled to separate games funding from the states. In total, they add up to around 17 million euros per year, which is much less than the federal budget.

Pressure on federal states is increasing

Depending on where a studio is located, it could be in trouble: federal states like Hesse hardly do anything, Bavaria and North Rhine-Westphalia do more - but their funding programs are not really big. Bavaria had a funding budget of 4.4 million euros in 2023. The Federal Ministry now sees the states as having an obligation to provide more money. Criticism comes from them. The 400,000 euro limit would be “problematic for start-ups and independent entrepreneurs,” says Hamburg’s media senator Brosda (SPD). “Since the federal government began funding computer games, they have proven many times that innovations and projects that are successful on the market can be created even with less start-up funding.” Hamburg currently provides almost half a million euros per year to promote games.

NRW Media Minister Liminski considers the 400,000 euro limit to be “rather arbitrary”. NRW supports games companies with 3.5 million euros per year. The FDP Bundestag member Nicole Bauer also doesn't think much of the 400,000 euro limit. “Good ideas don’t have to have an expensive price tag,” says the liberal. A spokeswoman for Berlin's Economics Senator Franziska Giffey (SPD) emphasizes that Germany needs to catch up when it comes to promoting games in order not to be at a competitive disadvantage when it comes to international settlements. “The federal government must quickly fulfill its responsibility for the German games location.”

In addition to the funding, tax relief would also be helpful for the games companies. These don't exist here yet. The State Secretary in the Federal Ministry of Economics, Michael Kellner (Greens), wants to advocate for a “tax credit system” - then companies could claim certain costs for tax purposes and would be financially relieved. Bavaria's Digital Minister Mehring sees such support for the industry as positive. But this should not come at the financial expense of the states, he says. When it comes to games tax relief, NRW Minister Liminski accuses the federal government of not having sought discussions with the states so far.

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