The fund is designed to help the country's indie developers kick start the development process. Hopeful applicants can be based anywhere in the UK, although they must be nominated for a grant by two members of the games industry.
The grants are being aimed small studios, specifically those with a 2-15 person team.
"The £4m Prototype Fund will promote a vibrant business environment for games developers, helping to accelerate growth in video games clusters all around the UK," said Ed Vaizey, the UK's minister of state for culture and the digital economy.
The deadline for the launch round is November 30. Successful applicants will be notified on the week commencing December 21.