Game apps in Germany: 23 percent growth in the first half of 2020

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Game apps in Germany: 23 percent growth in the first half of 2020

The game apps in Germany were very successful in the first half of 2020. Sales grew by 23 percent. A total of 1.1 billion euros were generated with game apps in Germany in the first six months of the year. The current growth figures are likely to have a lot to do with the special situation in the first half of the year. In the last few months there has been a lot of talk about the fact that digitalization could accelerate due to the health crisis. When looking at sales of game apps, it becomes clear that this is not an exaggeration. In Germany, sales of game apps rose by an impressive 23 percent in the first half of the year. This is a real house number. A look at sales shows that the game apps business in Germany is now a billion-dollar market. In the first half of the year it was possible to generate sales of 1.1 billion euros in just six months.

Crisis drives growth in game apps

The turnover consists on the one hand of the app purchases and on the other hand of the in-app purchases. In many game apps there is the option of activating additional features within the game after purchasing the game. In addition, there are also game apps that are initially free and then offer purchase options within the app for additional possibilities. The game apps business model has been working well for years, not just in Germany. But according to current knowledge, the current crisis has significantly accelerated growth in the first half of the year. That shouldn’t come as a surprise either, because the external circumstances forced many people to stay at home. Anyone who has more free time is automatically looking for new activities. So why not use game apps that are already used by many people to bridge small and large breaks in everyday life?

According to current knowledge, the game apps were not only used to play solo at home. An important factor for many users is the ability to interact with other players online. There are not only the big online games that also play an important role in esports, for example. Small game apps also often offer the opportunity to compete against other players online. For example, almost every board game is now also available in a digital version. It is very easy to do via the Internet to play these board games against relatives or friends, for example. In times when social contacts are suffering anyway, the game apps were a good help to make everyday life a little more entertaining. It is not yet entirely clear how the additional sales will be split between new and existing customers. But it is reasonable to assume that the existing customers played significantly more than usual and that many new customers also came along. The exact relationship will probably only be able to be determined after a certain distance on the basis of the business data of the various companies. For the entire industry, it is definitely positive that the game apps worked significantly better than many other products in the first half of 2020. Many industries suffered heavy losses. But above all the game manufacturers, not just the manufacturers of the game apps, are among the beneficiaries of the crisis. The second half of the year must show whether the trend will continue or whether there may even be a decline, because the situation in Germany has returned to normal somewhat.

Game apps have been developing well in Germany for years

Game apps are hugely successful, not just in Germany. But in Germany, too, it is easy to see how game apps have created a huge market in recent years. In 2018, the annual turnover was already over 1 billion euros. This year, the 2 billion mark could be exceeded for the first time. That would mean that sales would double within two years. Even if it is not yet entirely certain that this goal will be achieved, there is a clear trend. The exciting question in the next few years will be how big the market for game apps can still get. The smartphone has now become a natural part of everyday life for most people. Because of this, there are probably not many people left who even come within the range of the game apps by buying their first smartphone. But there is another effect that could help keep the growth going for many years to come. When it comes to the games, it is easy to see that the younger age groups are significantly more active. But the younger age groups are aging and therefore there will probably be significantly more game users in the older age cohorts than before in the next few years. This demographic effect could result in an even larger market than before. It is difficult to estimate how great the growth potential for game apps is. But all experts agree that the end of the story has not yet been reached. Another important factor is that the quality of the games has been improving for years.

The first game apps were very simple games without spectacular graphics. But now a smartphone offers excellent opportunities to implement complex games. The game manufacturers are still relatively early in their evolution, so it can be assumed that game apps as a whole will reach entirely new levels in the next few years. That could also help the game market to grow further. On the other hand, there is already a large market for smartphone users who use very simple games for entertaining entertainment. Not every app user wants to experience an extensive game with a complex set of rules. But it’s good that the range of game apps available is growing. The typical computer gamers who have very high standards can now be found more and more often as users of game apps. This is mainly due to the fact that there are more and more games that have a high level of content. For a real game fan who comes from the world of video games and computer games, spectacular graphics are not always the primary focus. It is even more important that there is a first-class game idea. Computer games and video games have developed tremendously over the past two decades. It can be assumed that the game apps will become even more exciting for users with ever better smartphones. The smartphone will remain the most important technical device for most people for the foreseeable future. With every evolutionary stage of the smartphone, however, there will also be a new evolutionary stage in the game apps, so that the next few years will definitely be exciting for game fans.

Online casinos are also growing in Germany

In addition to the game apps, there are not just the video games and computer games. Casino games have also become an important economic factor. In Germany there are many online casinos that have EU licenses. But from mid-2021 there will be gambling regulation in Germany that will also include online casinos. That is why there will also be online casinos with a German gaming license in the future. The exciting question for the next few years is how the online gaming market will develop in Germany. A precise distinction must be made between the regulated market and the unregulated market. At the moment there is only one market in Germany as there is no gambling regulation of the online providers. The market for casino games has grown tremendously in recent years. Ultimately, that is also the reason why politicians feel compelled to implement gambling regulation in this area. But in the future a distinction must be made between the regulated market and the unregulated market. Ideally, almost the entire currently unregulated market will be transferred to a regulated market. But it may well happen that this does not work out optimally. In addition to the regulated market, there are also offers that do not work under a German license. Why is that important? When it comes to the growth of online gambling, it is not just the regulated market that must be considered. It is important to see all of the growth to get a realistic estimate.

There are various scenarios that are currently being brought into play by experts. One possibility would be that the market as a whole will become smaller due to the new gambling regulation. Another option would be to have a relatively small regulated market and a very large unregulated market next to it. It is rather unlikely that the regulated gaming market in Germany will grow at the same pace as the unregulated market in recent years. Why is that? The requirements for casino operators in Germany are much stricter than those of the licensing authorities that issue EU licenses. Because of this, the online casinos with a German license will in all probability not be as attractive as the online casinos with an EU license. In the end, the exciting question will be whether the German authorities manage to keep the unregulated casinos out of the market. That would be positive for gambling regulation. But on the other hand, that would likely result in the market growing more slowly or even shrinking overall. Since there has never been any regulation for online gambling in Germany, it is difficult to estimate in which direction the market with German casino licenses will develop. But it is clear that some things will change for German gambling fans from mid-2021, when the State Treaty on Gambling comes into force.

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