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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

  1. What is the next milestone?Define the specific outcome the funding is intended to deliver.
  2. What will it cost? Build the budget from people, time and resources rather than starting with the maximum amount available.
  3. When will the cash be needed? A grant approval, publisher milestone payment or tax offset may arrive well after costs have been incurred.
  4. What remains unfunded? Identify the gap and the realistic source of the balance, including founder capital, revenue or external finance.
  5. 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:

VicScreen supports digital game projects, studios and practitioners through project investment, incentives and industry development programs.

Screen NSW offers digital games support that may include rebates, seed development, industry programs and market opportunities.

Screen Queensland provides games grants, a development incentive and talent or industry development initiatives.

Screenwest provides funding and support for WA game projects, studios and practitioners, including production and market development opportunities.

South Australian Film Corporation supports the local games sector through development funding, a state rebate and industry programs

Screen Tasmania includes video games within its development and production support programs for eligible Tasmanian practitioners and businesses.

arts ACT includes digital games within its broader arts funding programs, subject to the requirements of each round.

Screen Territory offers staged support for Territory game development, from early concepts through to more advanced playable work.

NOTE: Program availability, eligibility and application dates change. Review the current guidelines and speak with the relevant agency before relying on a program in a finance plan.

Screen Australia options

Screen Australia’s Games Production Fund provides grants of up to $100,000 for original Australian independent games with budgets of up to $500,000 at the time of application. It is intended to help an eligible project reach a significant development milestone.
The Emerging Gamemakers Fund provides smaller grants for original new projects, including prototypes and micro-scale games, and may be relevant to emerging teams or established creators undertaking more experimental work.
These are competitive programs with defined eligibility and assessment criteria. A strong application needs more than a creative concept: the project scope, budget, rights position, team capability, audience and development plan need to tell the same story.

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 (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.

The R&D Tax Incentive may be relevant where a studio is undertaking eligible experimental activities to resolve technical uncertainty. Developing a new game, feature or tool does not automatically make the work eligible; the activities must satisfy the program requirements and be supported by contemporaneous records.

Publisher and investor funding

For larger development, external commercial capital will likely become part of the funding mix. The value is not only the amount invested; the right partner may also bring distribution, platform relationships, marketing capability, production support or commercial discipline. The wrong arrangement can constrain the studio long after the initial cash has been spent.
A publisher may provide an advance against future revenue in exchange for distribution rights, recoupment, a revenue share or other commercial rights. The agreement may also include milestones, approval rights, delivery obligations, exclusivity, marketing commitments and consequences if the project changes or slips.
Angel, venture capital or private equity investors typically invest in the studio rather than funding only one game. That can support team growth and a broader pipeline, but it also introduces expectations around ownership, governance, reporting, future fundraising and eventual return or exit.
Before entering either conversation, understand who owns the IP, which rights are already committed, how existing grants or incentives interact with the proposed arrangement, and what the studio wants to look like after the current project is released. Capital should support the long-term business model, not merely postpone a cash crisis.

Other ways to finance development

Not every part of the funding plan needs to come from grants, offsets or outside investors. Operating revenue can preserve ownership and reduce reliance on competitive funding, although it also creates its own demands on time and delivery.
Contract development, co-development or specialist services can fund a team while original IP is being built. The risk is that client work consumes the capacity needed to advance the studio’s own projects.
A campaign can raise funds and test audience interest, but success usually depends on an existing community, a clear proposition and a realistic fulfilment plan. Campaign revenue is not free of platform, marketing, tax and delivery costs.
Some projects can generate revenue while development continues. This creates a direct relationship with players, but it also creates expectations around updates, support and delivery.
Self-funding can preserve control and demonstrate commitment, but it should be governed by a defined budget and decision points rather than becoming an unlimited personal subsidy.

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.

DISCLAIMER The implications of any funding decision will vary depending on your studio’s circumstances, structure and broader financial objectives. Reviewing your position early before committing to a particular path may help identify the most appropriate options and ensure any arrangements remain aligned with your long-term goals.

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

What is the minimum spend to access the Digital Games Tax Offset?

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.

Can Australian game developers combine state and federal funding?

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.

Is the DGTO the same as the R&D Tax Incentive?

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.

Do I need to be based in a specific state to access funding?

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.

When should a studio approach a publisher or investor?

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.

What makes a game development budget credible?

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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