Games subsidies in Germany

What kind of games can benefit from public funding?

Developers can apply for subsidies from a German state-level (Länder) funding organisation where their games have educational and/or cultural merit (these elements are also required to pass the cultural test under the EU subsidy rules). The FFF Bayern, for example, requires the game to have some connection to Germany or to the EEA. This might take the form of the main characters in the game referring to Germany or the EEA, or representing a famous German or European historical character. nordmedia prefers games that “convey knowledge and cultural values”.

Conversely, state-level public funding is not available for games that "potentially violate the Constitution or any applicable German laws, or that offend ethical or religious sensibilities or portray sexual or brutal acts in a coarse or obtrusive manner."

It should also be noted that subsidies are usually only granted where the games have an age rating of not higher than twelve, although in some cases, it can be up to 16.

Typically, different stages of the games development process can receive public funding in Germany, including the development of the game concept and the game prototype, as well as the actual production of the game.

What are the sources of public funding for games in Germany?

In Germany, almost all institutions that provide public subsidies are established at state level. At federal level, the Federal Ministry of Transport and Digital Infrastructure, as well as two German computer games industry associations (currently BIU and G.A.M.E. which are about to merge), annually award the German Computer Game Prize worth around a total of EUR 385,000.

The amount of public funding available for games in Germany is significantly lower than in many other countries, including France, the UK and Canada. According to a recent study by Hamburg Media School, total subsidies available at German state level currently amount to EUR 3m per year. In comparison:

• the Canadian province, Quebec, subsidises games projects by up to EUR 110m per year (2015);
• France’s games-related subsidies are around EUR 12-14m (2015); and
• the UK’s funding equals around EUR 50m (2015).

In 2016, the average amount of funding per publicly subsidised games project was EUR 500,000. Usually, the amount of public subsidy for a single games project in Germany is no higher than EUR 200,000. Having said that, Bavaria increased its single-project subsidies to up to EUR 500,000 per project from 1 January 2018.

The following institutions at state level currently provide public subsidies for games projects in Germany:

• medienboard Berlin Brandenburg GmbH (in Berlin and Brandenburg)
• FilmFernsehFonds (FFF Bayern) (in Bavaria)
• Film- und Medienstiftung NRW (in North Rhine-Westphalia)
• nordmedia – Film- und Mediengesellschaft (in Lower Saxony and Bremen)
• gamecity Hamburg (in Hamburg)
• Medien- und Filmgesellschaft (MFG) (in Baden-Württemberg)
• Mitteldeutsche Medienförderung (MDM) (in Saxony, Saxony-Anhalt and Thuringia)

Subsidies are usually granted on a per project basis in the form of limited recourse loans, i.e. the loans will only have to be repaid if the game is successful.

Often, the funding organisations give precedence to applicants situated in the federal state where the respective funding organisation is based. Others require successful applicants to spend the entire subsidy amount in the federal state of the funding organisation (also called “Regionaleffekt”, i.e. “positive impact on the region”).

Possible future developments

Due to the significant funding gap in Germany compared to other countries, the German games industry associations BIU and G.A.M.E, are lobbying for a substantial increase in the overall amount of available subsidies and favour automatic funding at federal level. This could be in the form of cash funding (similar to the “German Federal Film Fund” (DFFF), available for films), or a tax credit, modelled on the successful UK system.

The industry associations estimate that subsidies of at least EUR 50-100m per year are necessary to provide meaningful support to the industry. They have gone so far as to present a suggested draft bill to allow for a tax credit of 25%.

At this point, it is unlikely that the proposal will actually make it into draft legislation. However, a number of high-ranking politicians, including Chancellor Merkel during 2017 Gamescom, have recently acknowledged the importance of the games industry. Hopes are, therefore, high that the incoming government will move to increase the public funding available for games, bringing it in line with Germany's main competitors.

If you have any questions on this article please contact us.

Regulatory

Privacy & Cookie Policy

Terms of Use

© 2020 Taylor Wessing LLP