With a16z’s $600 million, Metaverse games funding reaches $3 Billion

Paigambar Mohan Raj
Source: RaillyNews

Andreessen Horowitz (a16z) has announced a $600 million gaming fund with an emphasis on Web3, claiming that games infrastructure and technologies would be critical building blocks of the Metaverse.

The fund, dubbed “GAMES FUND ONE,” would invest in three areas: game studios, consumer apps that promote player communities (such as Discord), and gaming infrastructure suppliers.

a16z says,

“The coming Metaverse will be built by games companies, using games technologies […] solved many of the problems that need to be solved to create the Metaverse.”

The a16z team cited the billions of dollars in the income generated by games like Minecraft, citing the open-world game as an example of a title with a long-term active community that acts more like a social network.

Although this is a16z’s first fund dedicated completely to gaming, the business has previously sponsored successful game-related companies such as virtual reality (VR) startup Oculus and game producer Zynga.

Regarding the funding, a16z stated,

“cemented our belief that games require a specialized focus.”

Founders of game development companies and popular games such as Riot Games co-founder Marc Merrill, Sky Mavis co-founders Aleks Larsen and Jeffrey Zirlin, who own the popular Axie Infinity blockchain game, and Kevin Lin, founder of gaming company Metatheory, which received $24 million in a funding round led by a16z, joined the fund.

Since mid-April, almost $3 billion has been invested in Web3 gaming or Metaverse initiatives by venture firms and gaming industry titans.

White Star Capital secured $120 million for its gaming and decentralized finance (DeFi) investment. While Framework Ventures put a $200 million allocation to blockchain gaming projects. Both of these funds were raised in April 2022.

Gaming industry heavyweights are also increasingly investing in metaverse initiatives. Epic Games, the maker of the famous Fortnite game, got $2 billion in investment from Sony and LEGO last month to develop a metaverse.