The Australian government is introducing its first-ever video games tax breaks.

The Digital Games Tax Offset will allow games companies a 30 per cent reduction on their tax bill, with the aim of raising Australia's profile in the global games scene. This is part of a package of incentives to help grow the country's digital economy, valued at AU$1.2 billion.

Australian video games trade body IGEA praised the government for recognising the important role that video games plan in the country's economy.

“This is a very welcomed day for Australian-made video games," CEO Ron Curry wrote.

"We congratulate the Prime Minister, Minister Hume, the Minister for the Arts the Hon Paul Fletcher MP and the Treasurer Josh Frydenberg MP for recognising not only that video games have an important place alongside TV and film in Australian screen production and storytelling, but also their unparalleled potential for supercharging Australia’s exports, attracting vast inward investment, and up-skilling a whole new generation of Australian digital workers."

“The Government’s new investment commitment today will do many things. It will spur the creation of brand new Australian game development studios, give existing Australian studios the support they need to take on ambitious new projects and accelerate their growth, plus attract further blockbuster AAA studios to Australia, all of which will create game development jobs in every state.

“This new federal investment will underpin a new wave of Australian video game development, leading to even more amazing Australian-made games to take to the almost $250 billion global video games market – which is arguably the largest entertainment market in the world – and bring new Australian voices and stories to a truly global audience."

Australian games studios generated $140.4 million in revenue during 2020.