The British government will put $5.2 million (£4m) to develop immersive games and experiences based on established IP.
This comes as part of a wider $42.6 million(£33m) Industrial Strategy investment, aimed at pushing the country’s immersive tech sector.
One example of where this funding will be used comes from Wallace and Gromit creator Aardman Animations, which will work with Tiny Rebel Games, Potato, Sugar Creative, and the University of South Wales to create AR and VR projects based on the claymation series of films.
London-based VR studio Maze Theory will also be creating a virtual reality title based on Peaky Blinders, due in 2020.
"Success stories like award-winning Wallace and Gromit, and BAFTA-winning Peaky Blinders are part of the reason why our creative industries are truly world-leading,” said UK business secretary Greg Clark. “Attracting audiences both here in the UK and internationally and helping create a sector already worth some £100 billion to our economy."
"It's why, through our modern Industrial Strategy, we're investing to build on this huge global demand for UK creative content and ensure we lead the world in the next generation of entertainment.
"This backing will also give our home-grown talent the opportunity to lead the way in creating and using virtual and augmented reality technologies, remain at the cutting edge and create thousands of highly-skilled jobs."