German States' Statement Raises Hopes for Quick Agreement

Following the initial individual reactions, the German federal states have now coordinated a joint statement. The requested improvements do not appear to be excessive and a compromise is within reach. A further development towards a tax credit system is also not off the table.

After the Federal Ministry of Economics presented its key points for a new funding guideline, criticism was not long in coming, especially from Berlin, Bavaria and North Rhine-Westphalia. However, there was also praise and approval from all sides for one point or another. Now the 16 federal states have also agreed on a united response and issued a coordinated statement, which is available to GamesMarkt.

In it, the federal states first emphasise that the predictable and reliable provision of funding is an essential prerequisite for a functioning games funding system. In the joint statement, the federal states also welcome the plan to revise the existing funding. "The states share the stated objectives of the funding. A strong games centre in Germany is in the interest of the federal states," the paper says.

As the federal government had hoped, the federal states also see the key points as proposals, which they are now commenting on and assessing. The reaction is made up of five points.

Firstly, the federal states criticise the proposed minimum size of 400,000 euros for projects eligible for funding. They argue that it does not take into account the current industry structure, which essentially consists of small and micro enterprises.

Secondly, the federal states criticise - as in the initial individual responses - the fact that the cumulation of federal and state funding is to be abolished. "The declared common goal of interlinking federal and state funding should not be abandoned," the paper states. Although the opinion of the Federal Audit Office in this regard is noteworthy, it cannot be cited as the sole argument in favour of the ban on cumulation.

Thirdly, the federal states are against the planned funding bonuses, which would, for example, provide special funding for games with certain thematic references such as sustainability. As a counter-argument, the federal states cite the bureaucratic effort involved in such bonuses and the fact that this would make funding more unpredictable.

Fourthly, the federal states welcome the intention to make an age rating procedure mandatory for funded projects. At the same time, they refer to the new USK classification regulations, which also take into account interaction risks such as in-game purchases and loot boxes, for example.

And fifthly, the federal states are also in favour of further developing funding for the games industry in Germany. This is necessary in order to create competitive framework conditions in comparison to other international locations. The federal states also explicitly mention "suitable tax regulations, for example in the form of a tax credit system", which should be examined in the near future.

Overall, the response from the federal states is positive. The points where they see a need to catch up are not insurmountable. A compromise on funding seems possible in the near future. And the fact that the federal and state governments are both open to the issue of tax credits gives us hope that this wish of the industry (and the suggestion of PricewaterhouseCoopers) could be fulfilled one day in the not too distant future.