Funding a Game Studio in Australia
Last updated: 6 August 2026
Update #1
Most Australian game developers know that funding exists. The harder questions are where to start, which options fit the studio’s stage, and what should come next.
The answer is rarely a single grant, rebate or investor. Studio funding is usually built in layers as a project moves from concept to prototype, production, release and ongoing development. Each layer brings different timing, eligibility requirements, obligations and trade-offs.
At LDB, we have worked alongside more than 60 Australian game studios. The studios that navigate funding most effectively are not necessarily those with the most polished pitch decks. They are the ones that understand their numbers before they start a conversation about someone else’s money.
Why the budget comes before the funding search
Budgeting can be treated as the administrative part of a funding application. It is the foundation of the funding strategy.
Before approaching a screen agency, publisher or investor, a studio should be able to explain what the project will cost, what the funding will achieve and what happens when that money runs out. That means defining the next meaningful milestone, whether it is a prototype, vertical slice, early access release or gold master, and costing the work required to reach it.
A credible budget should account for more than the obvious development work. It needs to reflect payroll and contractor costs, software and infrastructure, legal and accounting support, testing, localisation, marketing, contingency and the studio’s ongoing overheads. It should also distinguish between the total project cost and expenditure that may qualify for a particular grant, rebate or tax offset.
This clarity improves two decisions at once. It helps the studio judge whether a particular funding opportunity will materially advance the project, and it gives assessors or commercial partners confidence that the team understands the financial reality of delivery.
Five questions the numbers should answer
- What is the next milestone?Define the specific outcome the funding is intended to deliver.
- What will it cost? Build the budget from people, time and resources rather than starting with the maximum amount available.
- When will the cash be needed? A grant approval, publisher milestone payment or tax offset may arrive well after costs have been incurred.
- What remains unfunded? Identify the gap and the realistic source of the balance, including founder capital, revenue or external finance.
- What does the studio give up or take on? Consider reporting, repayment, recoupment, equity, rights, delivery commitments and ongoing compliance.
Think in layers, not isolated applications
The strongest funding plans match each source of capital to a specific stage and purpose.
A simplified pathway might look like this:
- Prototype: Founder capital, work-for-hire revenue or a small development grant establishes the concept and core gameplay.
- Vertical slice: State, territory or federal project funding helps demonstrate quality, production capability and market potential.
- Full production: A publisher, investor, larger grant or combination of sources finances the team and delivery plan.
- Completion and release: Milestone payments, operating revenue and working capital cover expenditure while tax offsets and rebates are processed.
- Ongoing development: Revenue, live-operations budgets and eligible incentives support updates, ports and additional content.
State and territory support: know where to look
State and territory programs can include project grants, production incentives, rebates, business development support, market travel and skills initiatives. The mix differs by jurisdiction, and funding rounds can open, close or change with relatively little notice.
Rather than assuming the program available in one state operates nationally, start with the agency relevant to where the studio is based and where the development expenditure will occur:
VICTORIA
NEW SOUTH WALES
QUEENSLAND
WESTERN AUSTRALIA
SOUTH AUSTRALIA
TASMANIA
AUSTRALIAN CAPITAL TERRITORY
NORTHERN TERRITORY
Screen Australia options
Games Production Fund
Emerging Gamemakers Fund
DGTO and R&D Tax Incentive
The DGTO and R&D Tax Incentive are separate programs. Expenditure claimed, or giving rise to notional deductions, under the R&D Tax Incentive cannot also be treated as qualifying expenditure for the DGTO. The interaction should be considered before claims are prepared, not after costs have already been allocated.
The Digital Games Tax Offset
The Digital Games Tax Offset (DGTO) is the Australian Government’s primary tax incentive for eligible game development. It provides a 30% refundable tax offset on qualifying Australian development expenditure, subject to a minimum of $500,000 in qualifying expenditure and a cap of $20 million per company or connected group per income year.
The DGTO can apply to the completion of new games, eligible porting work and ongoing development or live operations. A certificate must be obtained before the offset is claimed through the company’s income tax return.
The word refundable is important, but it should not be confused with upfront finance. The studio generally incurs the development costs first, completes the certification and tax processes, and then receives the benefit after existing tax liabilities have been applied. Cash-flow planning therefore matters just as much as the headline percentage.
Not every cost of operating a studio or bringing a game to market is qualifying expenditure. Studios considering the DGTO should establish appropriate project accounting, payroll records, contractor documentation and cost allocation processes early rather than trying to reconstruct them at the end of the income year.
R&D Tax Incentive
Publisher and investor funding
Publisher funding
Investor funding
Other ways to finance development
Work for hire
Crowdfunding
Early access and community-supported development
Founder capital and raised earnings
Real projects rarely follow this sequence neatly. The point is to know what each layer is expected to achieve and whether the timing works. A funding source that looks attractive in isolation may be useless if it arrives after the studio needs to make payroll, prevents another claim, or requires rights the studio has already promised elsewhere.
The Interactive Games & Entertainment Association (IGEA) is also a useful source of industry data, policy updates and advocacy. Following the broader policy environment helps studios understand not only which programs exist, but why governments support the sector and where future changes may emerge.
Talk to LDB
LDB has worked with over 60 Australian game studios across budgeting, grant readiness, project accounting, cash-flow planning, DGTO applications and claims, R&D considerations, structuring and broader business strategy.
Getting the numbers right early can help a studio pursue the right funding, avoid incompatible assumptions and understand the obligations attached to each option before committing to it.
Call us today on (03) 9875 2900 or get in touch online to discuss how LDB can help you explore the best options to fund your studio.
Frequently asked questions about funding
The DGTO requires a minimum of $500,000 in qualifying Australian game development expenditure per income year. It provides a 30% refundable tax offset on eligible costs, capped at $20 million per company group per year. Certification must be obtained before a claim can be made.
Sometimes. Game-specific state or territory support may be able to sit alongside federal grants or the DGTO, but every program has its own rules. Confirm which costs can be counted, whether funding changes eligible expenditure, and whether one program restricts access to another before building the combination into the budget.
No. They have different eligibility tests, application processes and policy purposes. Expenditure used for the R&D Tax Incentive cannot also be claimed as qualifying expenditure for the DGTO, so the cost allocation needs to be considered carefully. Typically DGTO will provide a better financial outcome at lower risk however R&D can sometimes be accessed earlier.
State and territory programs usually require a meaningful connection to the jurisdiction, which may include where the studio is based, where staff work or where qualifying expenditure is incurred. The test differs between programs, so check the current guidelines rather than assuming registration alone is sufficient.
There is no universal point, but the conversation is generally stronger when the studio can demonstrate the product, the market opportunity and a credible plan for the capital. A prototype or vertical slice can reduce uncertainty, but the right timing also depends on runway, bargaining power, IP ownership and the type of partner being sought.
A credible budget connects the scope, team, schedule and funding plan. It explains how costs were calculated, includes realistic overheads and contingency, identifies eligible and non-eligible expenditure, and shows how the studio will fund the period before grants, milestones, rebates or tax offsets are received
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