The Government, through its Strategic Investment Fund, is to pump £3.5 million into the UK games industry through new facilities at the University of Abertay, Dundee and Media City UK.

The two linked centres of excellence will both gain new specialist usability facilities and also help fund new prototypes for games studios. Developers can use these funds to develop new IP prototypes that they otherwise could not afford, while the centres of excellence will be able to put proven, talented graduates to work on real projects - a finishing school for games, as it were.

£2.5m of the amount has been allocated to Abertay, while Media City UK is to be supported by a further £1m.

“This is a great day for the games industry and really good news for Dundee," said secretary of state for Scotland Jim Murphy ahead of a visit to Abertay University today.

"Dundee has always been a city of innovation and has a well-earned reputation as the heartland of Scotland’s gaming industry. This investment now confirms Dundee as one of the key centres in the UK as well, and will allow Abertay University to grow Scotland’s international reputation for its talents in video games creation. The prototypes developed here will be used to help attract content investment and build investor confidence in new products – driving funding and growth in the industry.”

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He added: “A crucial element will be the deployment of talented students working together with small firms on prototype creation – breaking new ground in on-campus working and ‘industry-ready’ graduates. This innovative approach and new investment will ensure we continue to develop the homegrown talent. This is vital if we are to ensure our video games firms are best placed to take advantage of the growing global market."

Over the first three years of the project it aims to create 30 new companies, assist 80 others, help establish 400 new jobs and help the skill development of a further 300 people.

For Abertay, the move is in essence an companion to its world-reknowned Dare to be Digital competition, which seeks to get students experience of working as part of a team and creating a complete product.

"This announcement allows us to scale up further our support to UK games developers, including our fellow members of TIGA," said Paul Durrant, director of business development at Abertay University.

"We are particularly keen to make sure that growing companies can take forward new IP without having to divert resources from core business. The link between the facilities in Dundee and Manchester is also crucial to the successful reach of this project.”

The move has the support of the burgeoning Dundee game development community.

Dave Jones, founder of Crackdown and APB developers Realtime Worlds said: "Using a prototype fund to provide computing and arts students with the opportunity to get hands on experience of real projects will help equip them better for working in our high growth industry and help feed the demand we have for talent."

“Denki’s growth potential is driven entirely by our ability to realise original concepts, and anything that accelerates that process would be extremely valuable to us,” added Colin Anderson, managing director of Denki.