Metaverse and Web3 games see $3B in a month as a16z launches $600M fund

Venture capital firm Andreessen Horowitz (a16z) has launched a $600 million fund dedicated to investing in gaming startups with a focus on Web3, saying that "gaming infrastructure and technology will be a key component of the Metaverse."

Dubbed "GAMES FUND ONE," the fund will invest in three main areas: game studios, consumer apps that support player communities (such as Discord), and game infrastructure providers.

The a16z team stated that "the upcoming metaverse will be built by game companies using game technology" and that the industry has "solved many of the problems that need to be solved to create a metaverse". The company believes that gaming will become "the primary way people spend their time."

The move by a16z marks nearly $3 billion that venture funds and gaming industry giants have poured into Web3 games or Metaverse projects since mid-April. In April 2022, VC firm White Star Capital raised $120 million for its decentralized finance (DeFi) and gaming-focused fund, while Framework Ventures invested $200 million in blockchain gaming projects.

The Metaverse project has also received significant funding from gaming industry giants. Last month, Epic Games, maker of the hit game Fortnite, raised $2 billion from Sony and Lego to create the Metaverse.

The team at a16z points out that games like Minecraft generate billions of dollars in revenue, citing the open world game as an example, which has a long-lived and active community that functions more like a social network . Even though Minecraft was released 11 years ago, it is currently the best-selling game in history, with an average of 173 million monthly players over the past 30 days, according to game statistics platform ActivePlayer.

This is a16z's first fund to invest exclusively in games, but the firm has backed successful games-related projects in the past, including virtual reality (VR) company Oculus and game developer Zynga, and says the investments make it "reinforced in their belief: games require dedicated attention."

Joining the fund are game development companies and founders of popular titles such as Marc Merrill, co-founder of Riot Games, Aleks Larsen and Jeffrey Zirlin, co-founders of Sky Mavis, which owns hit blockchain game Axie Infinity, and gaming company Metatheory Founder Kevin Lin, the company raised $24 million in a funding round led by a16z.

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