I tried all sorts of permutations where Germany kept that stuff. Taking Cypress, or Malta or Gibraltar is pretty much required because the UK NO and USSR NO are +10 IPCs for the allies, per turn, every turn.
The best way to keep the Germany junk alive seemed to be buying an air base for Greece G1. However, especially if they KGF, you’re not going to have the money to waste on bases or strategic placements. Also, I consider NAfrica to be a deathtrap in all versions of the game, if you can’t rescue that stuff it will eventually get overwhelmed. In my experience, on G1-G3 you’ll need every fighter and every ship (well, and every IPC for land defense) to set up your strategic defense…none can be spent on luxuries. Germany doesn’t attain the critical income threshold in G42 in the same timeframe and also, instead of having 5-6 major armies/fleets it has more like 2-3.
Having said all that, your goal will be just as in G40; forget fleet/air buys with Italy and make an armored spearhead that can leapfrog. With Italy’s help, Germany actually can wreck Russia because relatively speaking, Russia is no more powerful in G42 as it is in G40. I didn’t think that there would be time to take Moscow, but in one game we forced them to abandon it (back out) or lose everything. Same india, they were forced to back away from the capital but despite multiple takes, Japan couldn’t keep it.
If you can sweep the allied fleets from the Atlantic, especially if they are KJFing, then the endgame is easy for the Axis because they only need to defend a limited group of territories. The Axis has an advantage without a bid because the economic victory (125 IPCs) only requires that they grab 1-2 regions of the board and keep what they have to start with…in most games they grab more like 3-4 regions (china, some money islands, south Russia, north Russia) and so they can even lose a capital and still win.