German Games Industry Confident for 2026 with €125M State Support
▼ Summary
– The German games industry’s federal funding is increasing significantly, from €50 million in 2024 to €125 million annually starting in 2026.
– Industry leaders credit this funding with mitigating recent global economic challenges and creating a more competitive environment for game development in Germany.
– The trade body Game argues the industry has high growth potential and pitches further government support by highlighting its economic, cultural, and innovative benefits.
– Game advocates for introducing tax breaks, a common global industry support model, to provide companies with long-term reliability and attract international investment.
– Research cited by the industry shows a strong return on public funding, with each €1 of support generating €4.80 in additional investment and €3.40 in tax revenue.
The German games industry is poised for significant expansion, fueled by a substantial commitment of €125 million in annual state funding set to begin in January 2026. This marks a considerable rise from previous support levels of €50 million in 2024 and €88 million in 2025. Industry leaders view this financial boost as a critical step toward solidifying Germany’s position as a premier global hub for game development, helping to buffer the sector from broader economic challenges.
According to Felix Falk, Managing Director of the German games trade association Game, this increased investment is largely due to the ambitions of the new federal government that took office in mid-2025. Germany already ranks as Europe’s largest market for consumer game spending and the fifth largest worldwide, providing a strong foundation for growth. Falk highlights the country’s advantages, including a robust talent pipeline and a funding framework that is becoming increasingly competitive with other major international centers. This creates a more level playing field and allows for faster market development domestically.
Falk credits long-time politician Dorothee Bär, the current Minister for Research, Technology and Space, as a pivotal advocate. With over two decades of engagement with the industry, her understanding of its potential and her current ministerial role are seen as major assets. While grateful for the 2026 funding increase, Falk is clear that this is just a stepping stone. He argues that the industry’s potential for growth far exceeds the current budget and that continued financial escalation is necessary for Germany to achieve its goal of becoming a top development hub.
The advocacy pitch to policymakers revolves around three core pillars: economy, culture, and innovation. Game emphasizes the industry’s vast potential to make Germany a “worldwide relevant player.” This argument is bolstered by pointing to international success stories, such as Canada, the UK, and France, where sustained government support has yielded strong results. The recent, aggressive investment strategies of nations like Saudi Arabia serve as a further wake-up call for Germany and Europe to remain competitive.
A powerful part of the argument comes from economic impact research. Data indicates that for every €1 in government funding, an additional €4.80 in private investment is generated. This is complemented by €3.40 in tax revenue and social contributions and €8.70 in gross value added. These figures demonstrate a compelling return on investment for public funds, making a stronger case for ongoing support.
Looking beyond direct grants, the industry’s long-term objective is to secure tax relief schemes, which are a global standard but rare in German financial law. Falk notes that such breaks provide companies with the reliability needed for long-term planning, encouraging both organic growth from domestic studios and attracting international firms to establish a presence in Germany. The new government has expressed openness to exploring this model in the coming years.
A survey conducted by Game near the end of 2025 reflects this growing optimism. While challenges remain, 29% of member companies expect 2026 to be more positive than the previous year, a figure nearly double that of the prior year’s outlook. Over half of the respondents believe their business performance will improve. This shift in sentiment is attributed to clearer, more consistent signals of support from the current government, marking a positive change from the more uncertain “stop-and-go” policies of the past.
(Source: Games Industry)
