Best times for visionary software ideas

When Christof Wegmann founded the company Exit Games in Hamburg in 2003, multiplayer games were rarely played online, instead LAN parties were organized. The world's leading cell phone manufacturer was Nokia, and the first iPhone would only turn the cell phone business upside down five years later. But Wegmann and his team of five were ahead of their time: they developed software that made mobile gaming possible with the cell phones of the time. "We were probably one of the first companies to offer software as a service, although the term didn't even exist back then. Our customers were the game providers. They didn't have to install the software themselves, we did that for them," says Wegmann. "In other words, we rented data center capacity and offered everything from player registration to multiplayer and high score management to in-app payment."

Software as a service for games studios

Today, "Software as a Service" (SaaS) is standard: software services for tasks that previously had to be solved in-house and often with extensive hardware. "We used to have a Siemens telephone system, our own email server and stored everything locally. Today, we use software solutions, such as cloud storage, for all of this and many other functions," explains Wegmann. While software as a service has become established, Exit Games was unable to generate sufficient profit with its business idea. So Wegmann changed the product when the start-up's investors withdrew, bought the company back with a business partner and focused on real-time multiplayer environments.

This proved that he had the right instinct. Today, Exit Games has around 60 employees and an office in the USA in addition to its headquarters in Hamburg's HafenCity. The most important product, "Photon", offers game developers a ready-made multiplayer environment that they can use for their games instead of having to program one themselves. "Deep tech is our core - we are all about highly complex programming," explains Wegmann. "Our customers are the creatives. If they were rock bands, we would produce important preliminary products and instruments so that they could make their music," Wegmann compares. This is why Exit Games is rather unknown to end customers. Large studios have their own software solutions for multiplayer programming. "As an independent solution, we are one of the market leaders. Photon is used in many multiplayer titles - from mobile to PC to VR," says Wegmann. Well-known games that rely on Photon include Stumble Guys (mobile), PEAK (Steam/PC) and Gorilla Tag (VR).

According to Exit Games, around one million developers have registered; Photon also reaches around 1.5 billion monthly active players. He attributes this success to the fact that Exit Games is very engineer-driven despite the increasing spread of artificial intelligence: "We only work with senior developers and focus entirely on our products - we hardly invest in marketing and sales," says Wegmann. The fact that even smaller studios can use Photon Engine for their games is due to a business model that is used particularly consistently in the gaming industry: Development with the software is free of charge, and even games with small numbers of users remain free of charge. Payment is based on usage - the fees increase with usage and therefore with the success of the game. The big advantage: alongside the big players, indie studios also have a chance on the market.

What comes after the subscription models

Valeska Wittgen is also very familiar with the various pricing models for software offerings. The Managing Director of OMR Reviews has a good overview of developments in the software industry: the online platform OMR Reviews bundles user reviews and testimonials about software tools in all categories. From Wittgen's point of view, it is primarily subscription models that will make way for new pricing models in the future. "Subscription models have many advantages from a company perspective, as well as from an investor's point of view. That's why they are still widespread. However, Wittgen believes that more companies will switch to usage-based payment models in the future.

This is suggested by a study conducted by OMR Reviews 2025 together with hy, a Berlin-based consultancy for digital business models and pricing strategies. According to the study, usage-based and hybrid pricing models will gain in importance in the future." Although only 37% of software providers currently use usage-based models, 69% plan to switch to them within two years, according to the study.

AI integration in software: important, but not (yet) decisive for purchases

In Wittgen's view, AI is currently a key driver of development in the software sector - for two reasons. "A lot of new tools are currently coming onto the market because AI has made it much easier to develop tools." Secondly, existing players are increasingly integrating AI into their products, observes Wittgen. "They want to meet the wishes of users, who are now used to chatbots and intelligent search, and ideally also to prompt logic." Although many customers expect AI to increase efficiency, AI integration is not (yet) as important for the purchase decision as other criteria. In particular, the question of whether software can automate processes and whether it can be easily integrated into existing systems would therefore lead to the purchase decision in the majority of cases.

"We are technically more advanced than legally and socially"

However, the fact that the number of tools on offer is growing is not only due to AI, Wittgen emphasizes. "Demand is also currently growing particularly strongly in the area of 'software as a service'. In 2025, more than 1.2 trillion US dollars will be spent on software worldwide, an increase of 12% compared to the previous year," says Wittgen. "Spending is expected to be even higher in 2026, with industry service Gartner forecasting growth of 15 percent." However, with the many new tools and the increasing use of AI come new challenges. "We are technically more advanced than we are legally and socially. This means that it is not sufficiently clear who is allowed to do what with which tools and what is not. I'm seeing new business areas opening up: consulting and guidance for the legally compliant use of AI," says Wittgen.

In her opinion, Hamburg is a good choice as a location for software providers - alongside Berlin and Munich; for example, the AI content suite Neuroflash or the project management tool awork originate from the Hanseatic city. Overall, tools from their own country would be well received, at least in Germany: According to OMR's Top 100 Report, 73 percent of the most popular 100 tools come from German software forges. This is also due to the fact that companies in German-speaking countries sometimes have different expectations of software, for example when it comes to data protection or server locations, says Wittgen. "Our Top 100 Guide is intended to show which tools are particularly popular with companies in Germany, Austria and Switzerland, and how diverse the market is. That's why it's nice to see that 73 providers in the ranking come from the region itself. So it doesn't always have to be a tool from the USA.

Combining tech skills and music knowledge

Agnes Chung is one of the founders who have helped shape the Hamburg software scene. Since studying systematic musicology with a minor in computer science, Chung has been an entrepreneur at the interface between music and tech. Without knowledge in both areas, it might never have occurred to her to close a gap in the music market with new software. Using her knowledge of both worlds, she and a business partner developed the Musicube software in 2019 to give unknown artists more visibility.

"You can only search for song titles or artist names in music databases like Spotify. That's why, with millions of songs, unknown musicians have little chance of being noticed outside their own bubble," says Chung. Musicube was designed to solve this problem by using artificial intelligence to analyze music tracks according to various criteria such as speed, mood or genre. This enabled Musicube to suggest unknown musicians for each individual music request. In 2022, Chung sold Musicube to the US music licensing company Songtradr, joined the company herself and remained Managing Director of Musicube and innovation strategist until 2025. But then she decided she wanted a fresh start, left Songtradr and began supporting start-ups. She doesn't have to leave the music sector to do this; she believes that the potential for innovative music software is far from exhausted. "It's always helpful to be passionate about a topic if you want to develop software for it. It's particularly easy to light the fire for music; almost everyone has something to do with it in one way or another. It's easy to build bridges. As a jury member at the music and tech incubator MusicWorx of the Hamburg Kreativgesellschaft, I see time and again that great new tools can be developed even without any in-depth musical knowledge," says Chung.

Putting a stronger focus on creativity thanks to AI

Even though she herself worked with artificial intelligence long before the AI wave, she is skeptical about the current hype surrounding the topic. "Everyone thinks they have to do something with AI now. But sometimes a good algorithm is all you need. In music, AI can take over many automation or routine tasks, such as keywording or mixing. My hope is that we can hand over this kind of hard work to AI and focus more on creativity ourselves." This attitude also leads Chung to specific requirements for good software: if it uses AI, then it should be transparent and the database should be clear, as this is the only way to gain the trust of users.

Chung also sees a current trend towards low-threshold and collaborative tools, such as the design platforms Canva and Figma, as well as software for particularly sought-after areas of application, such as the creation of social media content. In the music sector or for data-driven analyses of all kinds. "Such analyses can answer questions such as: Where are the listeners of my music actually located? This would be helpful for tour planning, for example, but can also be used in other industries to improve customer loyalty," explains Chung.

Strong ecosystems in Hamburg

From her point of view, such projects can be implemented excellently in Hamburg. "Hamburg has strong ecosystems in the areas of music, media and design," says Chung. "But Germany in general is sometimes a bit slow in the software sector compared to the USA or China. I wish we had more investors who would take the risk of supporting start-ups with their capital. Innovation and development are severely slowed down if there are not enough financing options for founders."