The games industry in Germany
More players, more revenue – the impressive upward trend of the games industry continued in 2021, and signs point to further growth in future. Yet in many different segments of the games industry, the full potential for innovation has yet to be tapped. This demonstrates that the games industry is once again fulfilling its role as an important cultural asset, a driver of economic growth and an agile innovation factory.
The market researchers at Newzoo also predict further international growth for 2022: the number of game players around the world is expected to increase by more than 4 per cent to over 3 billion people. And the revenue generated by games is set to rise by more than 5 per cent to over 203 billion US dollars – cracking the 200-billion-US-dollar mark for the first time. This data underscores that the games industry still boasts highly vibrant growth, not just in Germany, but around the globe. And this momentum is actually increasing, as evidenced by a new record number of acquisitions. In 2021, the value of mergers and acquisitions in the international games industry totalled approximately 85 billion US dollars1. And the next wave came right at the beginning of 2022, when Microsoft made a takeover bid for Activision Blizzard amounting to 68.7 billion US dollars. Take-Two Interactive hopes to acquire mobile games provider Zynga for around 12.7 billion US dollars, and Sony Interactive Entertainment has its sights set on games developer Bungie for approximately 3.6 billion US dollars. This wave of acquisitions has continued in Germany as well: British publisher Team17 acquired astragon Entertainment for 100 million euros, and French publisher Nacon bought Daedalic Entertainment for 53 million euros. And those are just a few examples of the numerous mergers and acquisitions that have taken place recently. Whilst in other countries, local companies are both buying and being bought, the situation in Germany is relatively one-sided: companies tend to get acquired rather than make their own acquisitions.
At the same time, however, the German games industry is relatively young, agile and on the rise, as the results of the study ‘Die Games-Branche in Deutschland 2018/19/20’ (The games industry in Germany 2018/19/20) conducted by the HMS Hamburg Media School indicate. The average games company in Germany is just 7 years old, and half of games companies are less than 5 years old. Consequently, most companies are correspondingly small: 7 out of 10 employ less than 10 people. Despite the large number of small and relatively new companies, however, employment in the games industry is much more stable than in other creative and cultural industries. For example, 8 out of 10 employees hold positions that are subject to social insurance contributions, 7 out of 10 are employed full time, and 8 out of 10 are on unlimited contracts. Additionally, the games industry is particularly diverse. The percentage of women in the industry still needs to grow, but at 25 per cent, it is already much higher than in other sectors of the digital economy. The high percentage of employees without German citizenship is another positive standout: whilst in other sectors of the cultural and creative industry this figure is only 17 per cent, it is an impressive 27 per cent in the games industry. One reason for this is the fact that the industry has to meet some of its demand for highly specialised employees by hiring experts from abroad. The particularly globalised nature of games companies also plays a role here. 47 per cent of games are exported – far more than the 7 per cent export ratio in film and television production, approximately 9 per cent in the books market and 10 per cent in the music industry.