20 May 2022

by Glenn Kaonang

Andreessen Horowitz is Betting Big on Gaming and the Metaverse

Andreessen Horowitz is launching GAMES FUND ONE, a dedicated $600 million fund that will be used to invest in the games industry

Gaming is a very big industry. But as big as it is, we rarely hear news of VC money being put into game companies, just like in the tech or other industries. So when big time VC firm Andreessen Horowitz (a16z) announced its plan to bet big on gaming, it certainly demands attention from the public.

The firm recently launched GAMES FUND ONE, a dedicated fund that will be used to invest in the games industry. While a16z has invested in game companies like Zynga and Oculus previously, this $600 million fund essentially marks its commitment to focus more on the prospect of the games industry. In announcing the news, a16z said that the fund was founded on the belief that games will continue to play a pivotal role in defining how we socialize, play, and work over the next century.

The firm also noted how games have been "driving innovation across the entire consumer ecosystem", pioneering effective methods for boosting user engagement, retention, and monetization, such as microtransactions, battle passes, and web3 tokens. In the long term, a16z believes that games infrastructure and technologies will be "key building blocks of the metaverse".

In practice, a16z plans to use the fund to invest in three main themes: Game Studios, Game x Consumer, and Infrastructure. Based on the way a16z frames today's best games as games that are "continually updated online services whose players form an integral part of the game through multiplayer and user-generated content," it will most likely invest in studios working on live-service games — or perhaps blockchain games, especially since the firm has already invested heavily into the web3 ecosystem.

As for Games x Consumer, the firm is referring to consumer apps and services that are essential to the gaming ecosystem, using Discord and Twitch as examples. Meanwhile, Infrastructure refers to game development tools and services, which the firm believes will be the ones shaping up the metaverse.

Andreessen Horowitz isn't alone in its venture into gaming. It is also backed by some of the biggest names in the industry, including David Baszucki, founder of Roblox; Jason Citron, founder of Discord; Marc Merrill, cofounder of Riot Games; Mike Morhaime, cofounder of Blizzard; Aleks Larsen and Jeffrey Zirlin, cofounders of Sky Mavis; Kevin Lin, cofounder of Twitch; Mark Pincus, founder of Zynga; and Riccardo Zacconi, founder of King.

Via: Decrypt. Header image: Sean Do via Unsplash.