The Game Developers' Association of Australia has said it is "dismayed and mystified" by a decision to cut government funding for Screen Australia's Australian Interactive Games Fund (AIGF).
The government saved $5 million by axing the AIGF, which was earmarked for a total of $20 million worth of funding over three years to 2014-15.
"The decision is completely at odds with the government's claims of support for Australian culture and innovation," a GDAA statement said.
The decision to cut the AIGF was made with "absolutely no consultation with industry", according to the GDAA's CEO.
"We made numerous attempts to contact the Attorney-General’s office in the months leading up to last night's announcement, including providing economic data and highlighting the successes the Australian game development sector has had on the global market," Antony Reed said in a statement. "We have yet to receive a single response."
"There is no question that the games industry is a significant contributor to the economies of every country that has a thriving game development sector; adding billions to the GDP’s of the US and Canada annually," Reed said.
"Moreover, games are cultural products, developed by teams of highly skilled people across multiple disciplines; games now inspire other media sectors including film, television, music and literature."