The Scots led 3-1 after three ends against a team they had beaten 12-2 in the round-robin phase.
But the Germans hit back after that, scoring in the next three ends to help seal victory.
It means Scotland will have to qualify for next year's World Championships in Switzerland.
The Scots, who had won Winter Paralympic bronze last year while representing Great Britain, had made a strong start to the round-robin phase, beating Germany and Sweden in their opening two games.
But the team of Aileen Neilson, Angie Malone, Gregor Ewan, Jim Gault and Hugh Nibloe struggled to get wins after that.
They lost to China (6-4), Russia (6-3), Norway (6-2), Canada (6-4), Slovakia (6-5) and Finland (8-4), with their only other success against the USA (4-2).
The tournament was the first opportunity to gain qualification points for the 2018 Pyeongchang Winter Paralympics.
Scotland's wheelchair curlers have lost 6-3 to Germany in their relegation play-off at the World Championships in Finland.