Video game developers have taken a A$10 million hit in the federal budget with the axing of the Australian Interactive Games Fund.
The fund was established by Labor in 2012 to pump A$20 million into home-grown game development over three years on the back of a successful run by Australian developers internationally. It was part of a strategy to foster creative industries and growth in the sector that employs designers, musicians, actors and software developers.
Some A$5 million was allocated in each of the first two years, with the remaining A$10 million to be spent in 2014-2015.
Budget papers show the fund will now end prematurely on July 1.
Australian game development has struggled in recent years because of high labour costs. Generous government subsidies in countries such as Canada have prompted the major studios to abandon their Australian operations.