Gaming has been revolutionized in recent decades thanks to the technology boom. Today, it has one of the most profitable entertainment industries in the world and has a bright future. Thus, it is unsurprising that the gaming biz has attracted the eye of noted VC firm Andreessen Horowitz, which launched its first fund targeted solely at investing in gaming companies.
Games Fund One, as it will be known, is based on the idea that games will play a pivotal role in defining how we socialize, play, and work over the next century. The new vertical $600 million fund, which a16z has been working on for nearly a decade, will be led by Andrew Chen, Jon Lai, and James Gwertzman, general partners at a16z.
The backers of the million-dollar fund include noted names in the gaming industry such as Roblox founder David Baszucki, Discord founder Jason Citron, Marc Merrill, (co-founder of Riot Games), and Mike Morhaime (co-founder of Blizzard). Aleks Larsen and Jeffrey Zirlin (co-founders of Sky Mavis), Twitch co-founder Kevin Lin, Zynga founder Mark Pincus, and Riccardo Zacconi (founder of King) are also included in the list.
This is not a16z’s first brush with the gaming biz – it is known to have backed companies like Zynga, Oculus, Epic Games, Sky Mavis, and Roblox. With its inaugural fund to invest in the gaming industry, a16z plans to make investments in game studios, game x consumer, and infrastructure.
To elaborate, these investments come as “games-as-a-service” have evolved into rich, interactive social networks where players form meaningful connections and in-game friendships. This leads to the growth and thriving of player communities, and a16z believes that some of the most innovative consumer companies will be built around the same.
With the evolution of games into virtual worlds and online services (which is accelerated by the metaverse), there is a need for a strong and adequate infrastructure to build and maintain these games (something that the new fund will focus on). a16z also believes that the coming metaverse will be made by game companies using game technologies.
If this is not enough, the VC firm will continue to add more functions and develop deeper networks that are tailored to the games ecosystem. This will be done so it can help its portfolio companies with all functions, ranging from building digital communities to managing their virtual economies, IP-licensing best practices, and helping build their development teams.