Video game funding axed

Video game developers have taken 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 $20 million into local game development over three years.

Budget papers show the fund will end on July 1, saving the government the remaining $10 million.

Local 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.