Video games have long been a major economic force, and the games market is worth billions. Robin Hartmann supports the Bavarian games industry on behalf of Games/Bavaria and reports on the current situation here.
The incubator WERK1 in Munich is already a familiar name to many in the startup world. However, few know that the name WERK1 comes from the former Pfanni factories, which were located on the current site of the Werksviertel Mitte. Also not widely known is the Games/Bavaria, the umbrella brand of the Bavarian games industry, which is managed by WERK1, and that is exactly what it is about now:
Games industry and development in Bavaria
Outside of the gaming industry, I'm always met with surprised looks when I tell people that video games have been successfully developed in Bavaria for decades and that we have an estimated 200 companies here that make money from them. These include not only the developers themselves, but also publishers, various service and technology providers, and fully specialized degree programs at public and private universities.
These almost exclusively international companies often work with cutting-edge technology and not only employ a large number of players, but also create entire virtual worlds that are sure to inspire. This is just one of the reasons why many traditional industries, such as the automotive industry, are increasingly seeking collaboration and exchange with the gaming industry.
An economic factor that should not be neglected
For some time now, game developers have no need to shy away from comparisons with other media industries such as music or film. According to 2017 analyses by the market research agency Newzoo, the gaming industry generates approximately $108.9 billion in revenue worldwide, and the trend is rising. Germany, with approximately €4.4 billion in revenue (Newzoo 2017: The German Gamer) ranked #4 in the sales markets worldwide.
The volume of a game production ranges from several tens of thousands of euros for smaller productions to major productions. A very popular example here is the game GTA V, which cost a whopping $265 million to develop and market. On its first day, the film more than recouped its production costs with revenues of approximately $800 million.
However, game development is a hit-driven business. Not every project recoups its costs quickly—if at all. The smartphone sector, in particular, is extremely competitive. As recorded on Pocketgamer.biz, over 3,000 games are submitted to the Apple App Store alone every month. Even assuming that some of them aren't even accepted or are just updates, it gives an idea of how much movement is happening in the market. Unfortunately, it's no longer enough to simply create a high-quality product if you don't also manage to generate visibility for the product.
Despite potential challenges, quite a few people in Germany manage to make a living from games. The industry association BIU reports that around 28,460 people are currently employed in the computer and video games industry.
Why is industry support useful?
I was just throwing around big numbers and talking about billions in sales and now it's all about support?
Here, I'd like to quote the industry association BIU again. They state that only around 67% of revenue in Germany actually remains with our local developers and publishers. That's a rather sobering figure for such a large industry in our own country.
To increase this number and also improve the conditions for local companies, there are several initiatives and funding opportunities. In Bavaria, we have, first and foremost, our umbrella brand Games/Bavaria, which is supported by the institutions FFF Bavaria, Media Network Bavaria and the WERK1 The necessary funds will be provided by the Bavarian State Ministry for Economic Affairs and Media, Energy and Technology made available.
Through FFF-Bayern, games companies have the opportunity to apply for concept, prototype, and production funding. This has been done over 72 times in recent years. In 2017, a record amount of €1.2 million was available for this purpose, which is set to increase again to €1.8 million in 2018. The Media Network Bavaria is particularly strong through its networking between different industries. WERK1 now employs two full-time employees (including myself) to support the games industry. Whether through joint trade fair appearances at Gamescom to organize international surcharges such as on the GDC in San Francisco, to distribute information via website and newsletter, and to support the numerous initiatives of the industry itself.
Events such as the GameCamp Munich, which will celebrate its tenth anniversary next year. And even without the self-organized regulars' tables — in modern German User groups — the networking between companies and game creators would not be nearly as good.
Compared internationally, however, our funding and support are still a drop in the ocean. This makes it all the more important to be well-connected in an international market, to find suitable partners, and to support one another.
We are working on improving this even further, and I am happy about anyone who wants to help us and shows interest in our industry. If you are interested in the gaming industry, please let the Editorial staff Perhaps another article with industry insights will appear here in the future.
Further information
A large part of the events and activities of the games industry taking place in Bavaria are run under the umbrella brand Games/Bavaria (link to brochureHere you will find a company register of Bavarian gaming companies, an event calendar, contact information, and our monthly newsletter for those who like to stay up to date.
About the author:
Robin Hartmann Robin is a trained IT specialist and worked in the ICT industry for over seven years. He subsequently completed a degree in Production and Management for the Games Industry at the Games Academy Berlin and has since gained more than seven years of industry experience as a producer and project manager. Since May 2014, Robin has been working as a Games Project Manager in WERK1 and is responsible for projects supporting the games industry in Bavaria on behalf of the Bavarian Ministry of Economic Affairs.
