From global players to indie studios - Hamburg is an attractive location for game developers. And games are also becoming more interesting in marketing. Where does the industry stand? We took a look inside.
If you want to understand what drives the German gaming industry, you should look to Hamburg. Thanks to many years of targeted economic development, the Hanseatic city is an attractive location for game developers, from global players to indie studios. And that is only half of the success story. In conjunction with Hamburg's broad media and digital scene, completely new marketing ideas and business models are also emerging across industry boundaries.
The joy of play is one of the fundamental human characteristics. In the digital age, this joy can be experienced in so many different ways that the gaming industry has become a flourishing economic sector in its own right. In 2024, for example, around 30,000 people working in the gaming sector across Germany generated a turnover of 9.4 billion euros. Around 2,450 of them work in Hamburg. The Hanseatic city is home to a number of industry giants such as InnoGames and Goodgame Studios, as well as numerous medium-sized and small indie studios and publishers.
Contrary to what the cliché sometimes suggests, the target groups for games are diverse - some games are aimed primarily at young people, while others serve as a pastime for older people, right up to the 60+ generation. This also makes digital games attractive for marketing purposes. Companies are increasingly using games as a marketing measure or resorting to monetization models from the gaming sector.
Estimated turnover of the German gaming industry in 2024
This is how many people work in the games sector in Hamburg
Estimated number of companies in the Hamburg gaming industry
Sources: Games.de and Gamecity (links at the end of the text).
"Newspapers and magazines primarily rely on a subscription model online. (...) From a gaming perspective, however, we would say that this only catches a very small part of the price-sales curve, namely the people who regularly follow a particular medium."
How revenue from games is generated also varies greatly. Many gaming business models have now increasingly spilled over into other sectors. Microtransactions in particular promise more stable income than the term suggests. They are the main source of income in free-to-play games. For example, in the games of InnoGames, Hamburg's largest games company with 350 employees. One of the highlights of InnoGames' offering is the game "Forge of Empires", in which several hundred thousand people worldwide build their own virtual city in their PC browsers or on their mobile devices every day.
Michael Lenz, Chief Analytics Officer (CAO) at InnoGames, explains how the company earns money with microtransactions: "As the name 'Free-to-Play' suggests, you can play completely free of charge. However, there is cross-financing from players who have little time but disposable income. They shorten waiting times, for example when producing resources or constructing buildings, by spending money. Around ten percent of players do this occasionally. Most spend small amounts, such as one or two euros a month." A few, however, invest significantly more, says Lenz: "In rare cases, the value of a car comes together over the entire lifetime of the game. This mix results in a nice total amount - and a fair business model. Instead of spending a lot of money on a downloadable title or a physical copy that you haven't played before, with free-to-play games you only spend money - if at all - when you are sure that the fun of the game justifies the investment."
The fact that Lenz knows so precisely how users behave is part of the business model. The company analyzes several billion anonymized "events" every day to understand exactly what is popular with players.
The majority of players that InnoGames reaches are 40 years old or older, many even over 60. A large proportion of them have enough money for one or two voluntary investments. Lenz, who studied media management himself, believes that microtransactions could also work outside the games industry, for example in the media sector. "Newspapers and magazines primarily rely on a subscription model online. I'm sure a lot of effort, time and analysis went into this decision," admits Lenz. "From a gaming perspective, however, we would say that this only captures a very small part of the price-sales curve, namely the people who regularly follow a particular medium." This is where he sees an approach for microtransactions, says Lenz. These include, for example, staggered prices for one, five or ten articles, so perhaps a small commitment, but not a permanent obligation.
However, the gamification potential is far from exhausted with tiered item prices and microtransactions - other mechanics from games could also bring profit elsewhere. Lenz believes that two important success factors of InnoGames games can be transferred to media offerings: A lively, active community and the opportunity to compete with other players*. "For example, you could say: you've read 20 articles in the foreign section this month, so you get our diplomat label - similar to leveling up in gaming. You can then show this off in the community, for example in the discussion forums," says Lenz. "If you read a lot of articles in the foreign section over a longer period of time, you reach the next level and so on. You could also reward particularly valuable contributions to discussions in a similar way, for example. Even a simple reward system can have amazing effects on customer loyalty."
"For example, you would have to produce a lot of film content and push it through advertising to get people to engage with a brand for 15 minutes. Gaming can do this better and really gets users to interact."
Gamification only transfers the incentive systems from games to other sectors. But can games themselves also be used as a marketing measure? "Of course," says Insa Hollenberg, Head of Strategy at Headraft. The Hamburg-based company discovered a market niche for itself in 2016, and there is still little competition. "We develop games for brands, often in the context of comprehensive campaigns," explains Hollenberg. "The benefits differ from traditional campaigning. Games are characterized by the fact that they achieve a particularly high dwell time. For example, you would have to produce a lot of film content and push it through advertising to get people to engage with a brand for 15 minutes. Gaming can do this better and really gets users to interact."
Hollenberg uses an example to explain what this looks like in concrete terms. For a new cell phone with a good camera, Headraft developed an app game in which users had to help a small robot save the world. Within three months, the app had been downloaded 50,000 times - a complete success, says Hollenberg.
In other projects, Headraft creates its own content for the online platform Roblox, a virtual world full of landscapes, puzzles and mini-games that are designed and played by the very young community itself. For example, Headraft implemented a project for the Austrian radio station Kronehit. "In the game, users had to steal a crown from each other. There were also events, and the station's presenters had their own avatars that players could chat with," says Hollenberg.
Business is going well at Headraft, although not all marketing experts think of games when planning campaigns. "We work a lot with agencies, and there are a lot of them in Hamburg," says Hollenberg. "Agencies are increasingly aware that games work well, but they often can't or don't want to implement them in-house".
In fact, very special know-how is required to develop good games. Most of the almost 20 employees at Headraft know their way around the gaming world because they also enjoy playing games in their free time. Many are interested in XR, and quite a few have an unusual background. "For example, we have a developer who used to do jewelry design," says Hollenberg. "Then she started designing jewelry in augmented reality and eventually ended up with us via Snapchat filters and Tiktok effects - which we also offer." Overall, the team is very young - "We turned 30 on average last year," says Hollenberg.
One of the special features of Headraft is that the team is very open to new technologies. In addition to using the game development tools "Unity" and "Unreal Engine", more and more artificial intelligence is also being used. The situation is similar at InnoGames. "It used to take us about two weeks to develop a mood image as a loading screen," says Michael Lenz. "Today, we can create the basis for this in one to two days with AI. However, our artists are still in demand to complete the image." However, finished game content has not yet been created using AI. But the industry is working towards this - InnoGames is also already experimenting in this direction.
Nevertheless, it is not the technology alone that is making the gaming industry so successful. It is probably more the mixture of technological know-how, elaborate analysis of user behavior and creative thinking that distinguishes the gaming scene - and can also serve as particularly good inspiration for marketing and media companies.
In other words, an appealing presentation, exciting interaction and storytelling are just as important for success in media and marketing as they are in games - after all, the joy of playing games is a fundamental human characteristic across all industries.
Sources:
Like nextMedia.Hamburg, Gamecity Hamburg is an initiative of Hamburg Kreativ Gesellschaft and is committed to promoting the games industry. The aim of Gamecity Hamburg is to improve the framework conditions for companies and founders in the games value chain in the city, to support them in their further development and to anchor Hamburg in the public perception as one of the leading games metropolises in Europe. It is the point of contact for Hamburg's games funding and the Games Lift Incubator and also offers programs, events and services to strengthen local developers in close cooperation with the games industry.
