The basic apparel sponsorship contract is likely not based on appearances (Götze signed for 10 years with Nike in 2012 for the largest sponsorship fee in German history), but these types of contracts are also heavy in incentives based on additional appearances at major tournaments, promotional events, TV advertising spots, etc. I'm sure that as long as he's on a team somewhere, he's going to get his base fee from Nike. He's still going to lose a million euros a year or more in those additional sponsorship fees and add-ons though.
I don't think it's penetrated the English speaking world, but Götze is a fucking mega-star in the German speaking world. He's the face of Nike in the country (where Adidas is king and so Nike has to push him heavily to try and balance that), he's on every ad board in every sporting goods store and he's literally one of the 3-5 most famous people in the country (I mean, he scored the goal that won the freaking World Cup after all). He's 24 years old and has 59 caps for Germany, for fuck's sake - he's been a superstar on a national level since he was 17 years old.
He needs to be playing, and he needs to be playing at a high profile situation. Inside or outside of Germany doesn't matter that much, but there's a lot of money riding on him actually being on a pitch (both for him and for Nike). If he's not going to be first choice for Bayern, then he's going to force himself out (and Bayern seems happy to push him to the door as well).