Additional games originate from Germany?
In a bid to stimulate investment in the gaming sector, the German government has proposed tax incentives for game developers, allowing companies to claim certain costs and pay less tax. This move is part of a broader federal strategy to boost Germany's share in the growing global games market.
The tax relief is primarily designed to benefit companies that pay their taxes in Germany, encouraging domestic game development. Alongside these tax incentives, the government is significantly increasing direct funding, with grants rising from €88 million in 2025 to €125 million in 2026.
These measures aim to strengthen Germany’s position as a game development hub, supporting innovation, job creation, and global competitiveness. The tax incentives are expected to spur investment in game development, helping both established studios and startups by reducing their tax burden and improving cash flow during development phases.
Industry leaders have expressed relief and optimism, viewing these measures as signals that the gaming sector is gaining more serious political attention. They believe this could reverse the recent 4% decline in the number of German game companies and foster a more sustainable growth environment.
Malte Behrmann, an industry expert, views the federal government's plans positively but calls for a shift in funding policy in the future, favouring game companies that tax their profits in Germany. State funding is a major topic at the upcoming Gamescom computer games trade fair, with Federal Research Minister Dorothee Baer (CSU) expected as a guest speaker.
However, implementing such a system would likely lead to lower tax revenues for the federal government and states in the short term. Bavaria's Digital Minister Fabian Mehring suggests that the federal government would need to offset corresponding losses in the tax revenue of the states.
Successful games from Germany include "Enshrouded" by Keen Games and "Hunt: Showdown" by Crytek, both studios are from Frankfurt. Other well-known classics include "Anno 1800" by Ubisoft from Mainz and Düsseldorf.
Politicians from various factions, including CDU/CSU, SPD, Greens, and from the federal states, have signaled approval for the tax incentive plan for game developers. Green MP Andrea Lübcke views gaming as "one of the central innovation and growth industries of the 21st century" and supports tax incentives for game companies, but emphasizes the importance of careful implementation.
Overall, the tax incentives combined with increased grant funding are expected to accelerate investment, boost the number and quality of game projects, and enhance Germany’s global competitiveness in the gaming industry.
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