The Australian independent video game industry has experienced a remarkable resurgence, generating over $608 million in revenue during the 2025 financial year. This period marks significant growth and international success, following a transformation from a challenging decline in the early 2010s.
The industry's recovery is supported by increased government incentives and the emergence of independent studios, with several Australian-developed titles achieving global recognition, though challenges related to funding and scaling remain.
Recent Industry Growth and Achievements
The Interactive Games and Entertainment Association (IGEA) confirmed that Australian video game studios achieved over $608 million in revenue in the 2025 financial year, showcasing substantial growth.
One of the most notable successes is Hollow Knight: Silksong, developed by Adelaide-based Team Cherry. Its release with limited prior notice in September reportedly caused digital storefront outages due to immense demand. By the end of 2025, the adventure game had sold over seven million copies worldwide and received the "Best Action/Adventure Game" award at The Game Awards. Ari Gibson, co-founder of Team Cherry, emphasized that consistent progress requires significant time, a sentiment echoed by the success of its predecessor, Hollow Knight (2017), which was also critically acclaimed for its world-building and gameplay.
Industry Transformation and Historical Context
The Australian game industry faced a significant downturn in the late 2000s and early 2010s. In the early 2000s, Australian developers were primarily involved in 'AAA' (big-budget) games, often through local branches of international companies. However, economic pressures, high operating costs, and international tax incentives led to the closure of several international operations, including Pandemic Studios, THQ, and Electronic Arts' Visceral Games, between 2007 and 2011. Additionally, Team Bondi, known for LA Noire, entered administration in 2011 amidst allegations of poor working conditions.
By the mid-2010s, a crucial shift occurred, leading to the formation of smaller, independent teams. Many of these new studios were founded by experienced developers from larger companies. For instance, Uppercut Games was established in 2011 by former 2K Australia developers Ed Orman, Andrew James, and Ryan Lancaster, initially succeeding with mobile games like Epoch before moving to exploration games such such as Submerged (2015). The mobile gaming sector also saw major successes with titles like Halfbrick Studios' Fruit Ninja and Hipster Whale's Crossy Road. IGEA Chief Executive Ron Curry noted that the industry's recovery benefited from developers' experimentation and creative freedom during the downturn.
Key Independent Game Successes
Several Australian independent games have garnered global success and critical recognition:
Untitled Goose Game(2019): Developed by Melbourne studio House House, this distinctive game, where players control a goose causing disruptions, sold one million copies within its first three months.Unpacking(2021): Created by Brisbane's Witch Beam Studios, this "zen puzzle" game achieved remarkable sales, selling 100,000 copies in 10 days and one million within its first year. It also earned multiple accolades, including two BAFTAs, with lead designer Wren Brier drawing inspiration from personal experiences.Cult of the Lamb(2022): Developed by Melbourne-based Massive Monster, this title blends dungeon-crawling with cult management. As of March 2026, it had sold seven million copies, reportedly generating approximately US$90 million in revenue by April 2025. Co-director Julian Wilton stated that the studio expanded to support the game and recouped costs from pre-orders.
Government Support and Industry Initiatives
For many years, the Australian game industry received less government support compared to film or television. However, this support has significantly increased over the past four to five years:
- Digital Games Tax Offset (DGTO): Introduced in 2023, the DGTO enables eligible companies to claim 30 percent of qualifying Australian development expenditure.
- State-level incentives: Several states, including Victoria, New South Wales, Queensland, and South Australia, offer rebates, typically ranging from 10 to 15 percent of in-state expenditure, through their screen agencies. Victoria is recognized for offering the most comprehensive incentives. Julian Wilton of Massive Monster highlighted that Cult of the Lamb received approximately $40,000 in early funding, crucial for creating a publisher pitch package, and noted that government support encourages developers to take greater creative risks.
Efforts are also underway to build a broader development ecosystem:
- MASS and Monster Fund: In Melbourne, Massive Monster launched MASS, a co-working space for developers, and Monster Fund, an investment program providing funding, mentoring, and access to the co-working space. These initiatives are supported by VicScreen and Creative Victoria.
- South Australian Grants: In October, the South Australian government announced grants of up to $100,000 to support local video game creation.
Ongoing Challenges
Despite the recent growth and success, several challenges continue to impact the Australian independent game industry:
- "Missing Middle": Ron Curry identified a critical gap in support for companies attempting to scale up after achieving initial success. Uppercut Games addressed this by securing international investments, including a minority investment from Tencent in 2021 and a publishing deal with Focus in 2024, enabling them to expand their team to over 51 people.
- DGTO Threshold: Julian Wilton noted that the Digital Games Tax Offset's minimum expenditure threshold of $500,000 can be prohibitive for smaller studios.
- Funding Disparity: Funding for games remains lower when compared to other screen industries, such as film and television.
- Survivorship Bias: Ed Orman of Uppercut Games pointed out that while successful projects gain attention, many other endeavors fail to find an audience.
- Varying State Support: Several states and territories continue to have lower levels of support compared to those with more established incentives.
The industry's momentum signals increasing recognition of Australian games as a significant creative and economic export on the global stage.