However, according to associations, even greater growth would be possible. Why a strong gaming industry benefits everyone.
Some enthusiasts appear as Berserk, Freya, or Keyleth, wearing detailed and colorful costumes from their favorite games. At the largest trade fair of the video game industry, Gamescom in Cologne, the diversity of this sector is once again evident. The world of games is often still considered a niche area of the economy. Yet several hundred thousand visitors are expected to attend this convention alone.
Companies from Bavaria are also present at Gamescom. In total, there are approximately 345 studios in the Free State that are involved in the development of games and together employ more than 3,500 people. The Association of Bavarian Business (vbw) speaks of a “huge potential” in this industry. In order for this potential to be used, the association demands a more targeted strengthening by politicians. The framework conditions must be made significantly more attractive.
Different Funding Instruments for Games
One of the major hurdles lies in the fact that the production of games in Germany is comparatively expensive compared to abroad. In countries such as France, Canada, or the United Kingdom, development studios, for example, pay considerably lower taxes.
Since the year 2020, the Federal Government has been supporting the games industry with up to fifty million euros annually. However, these funds are tied to funds and, according to the industry association Game, have already been suspended three times by April 2025 because the demand was simply too great.
This is expected to change in the future: Federal Research Minister Dorothee Bär (CSU) has announced that funding will be increased to 125 million euros starting in 2026.
In addition to the Federal Government, the European Union and individual federal states also provide financial support for the video game industry. Bavaria provides funds through the FilmFernsehFonds (FFF). For concepts of video games, there is up to 30,000 euros, for production a maximum of 500,000 euros. In addition, the “Gamerei” in Munich also receives funding from the Free State. There, developers and young start-ups are provided, among other things, with office space and rooms for events.
Bavarian Games Association: Funding Still Too Low
The financial support is basically positive, emphasizes Hendrik Lesser, chairman of the Games Bavaria Munich Association and managing director of a production studio for video games. However: “From my point of view, this is far too little money.” In addition, he would like to see less complicated procedures for applying for subsidy funds as well as greater awareness of the high innovative power and significance of the games industry.
The Innovative Strength of the Games Industry
Without the games industry, for example, social networks would not exist in their current form, says Lesser. Real-time communication was developed through multiplayer games, which today forms the foundation of social media. The games industry has also achieved important progress in the field of Virtual Reality and Augmented Reality. Thus, according to Lesser, the industry does not only deliver entertainment products but also creates new professional fields and drives technological developments forward.
Nvidia as the Most Valuable Company Worldwide
An example of the economic significance of the global games industry is the success story of the U.S. chip company Nvidia. The company grew large through graphics cards for games, explains Lesser. In the meantime, it also benefits from the boom surrounding artificial intelligence and, among other things, produces processors for data centers.
In July 2025, Nvidia reached a market capitalization of four trillion U.S. dollars. This makes the corporation more valuable than all the companies of the German DAX combined.
What Is Understood by Virtual Reality and Augmented Reality?
Virtual Reality (VR)
Virtual Reality is an artificially created world that is detached from the real environment. It is made accessible through special headsets, which, with the help of a 360-degree field of vision, create the illusion that one can move in a virtual environment. This space is represented in such detail that complete immersion of the users in the artificial world is possible.
Augmented Reality (AR)
Augmented Reality extends the real world with overlays or superimpositions of virtual elements. Reality and digital content merge and complement each other without pretending to the users a complete separation from the physical environment. A well-known example of this is the smartphone game Pokémon Go.
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