a16z’s $600 Million Games Fund One Themes to Support Game Studio, Games x Consumer and Infrastructure.

Matt Swayne
person sitting on gaming chair while playing video game
a16z is not playing around with investing in gaming. (Photo by Florian Olivo/Unsplash)

Citing a new era of gaming, venture pioneer a16z announced its creating an inaugural fund dedicated to gaming, according to a company post. Specifically, the company will spread Games Fund One’s $600 million across three themes across the space: game studio, Games x Consumers and infrastructure.

a16z predicts the future of gaming will go beyond mere games. They see entirely new worlds of interaction. In their Game Studios’ theme, the venture fund will look at companies where players aren’t passive, they’re active participants in building that world.

The best games today are continually updated online services whose players form an integral part of the game through multiplayer and user-generated content,” the company states. “These “games-as-a-service” have become rich, interactive social networks, with players making in-game friendships that are just as meaningful as those made in-person.”

Similarly, Games x Consumer theme will incorporate startups looking to build the next Discord or Twitch.

They write: “The rapid growth in the number of gamers worldwide has created a thriving ecosystem of consumer apps to support them. As games become the dominant way people spend time, we believe some of the most innovative consumer companies will be built around player communities. (Social apps like Discord that help gamers build community, or platforms like Twitch where millions tune in daily to watch creators livestream video, are just a couple examples of this).”

Finally, a16z plans to invest in Infrastructure, without which these new worlds of gaming will not be able to launch and grow. Demand for infrastructure is already skyrocketing, the company points out.

a16z sees that the fate of the Metaverse and gaming are inexorably linked: “As games evolve into virtual worlds and online services, the demand for tools and services needed to build great games is skyrocketing. Not only is this infrastructure important for games in its own right, we also believe that the coming Metaverse will be built by games companies, using games technologies. From content creation to multiplayer enablement to virtual economy management and live ops, the games industry has already solved many of the problems that need to be solved to create the Metaverse.”

The fund is built on the idea that games are not just merely games. They will “play a pivotal role in defining how we socialize, play, and work over the next century.”

Obviously, they expect the space to be extremely lucrative, pointing to the income-generation machines that are leaders in the gaming space now. They believe the billions generated by today games is only a fraction of the potential.

a16z writes: “The most successful games today, such as Fortnite, League of Legends, and Minecraft, are communities that retain loyal, long-term users and generate billions of dollars in annual revenue. Furthermore, games are also driving innovation across the entire consumer ecosystem, pioneering best-in-class mechanisms for user engagement, retention, and monetization, such as microtransactions, battle passes, and web3 tokens. And long term, we believe games infrastructure and technologies will be key building blocks of the Metaverse, an opportunity that dwarfs the current $300 billion game industry itself.”

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