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Interpreting a16z: What makes the $600 million Deck gaming fund so attractive?

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Andrew Chen, the manager of a16z Games Fund One, revealed the fund's fundraising deck for 2022. One year later, the fund has already made 25 investments.

Original title: "Interpreting a16z's $600 million gaming fund raising deck, why choose to bet on gaming?"

Original source: TechFlow Deep Tide

One year ago, the encryption venture capital giant Andreessen Horowitz (a16z) announced the launch of its first gaming fund, Games Fund One, with a scale of $600 million. After a year, the fund has made 25 investments.

On the occasion of its one-year anniversary, Andrew Chen, the manager of Games Fund One, revealed the fund's fundraising deck for 2022. TechFlow provided an interpretation of the deck and added Andrew Chen's current comments. For example, Andrew Chen believes that if he were to write this deck today and discuss why it is the right time to invest, he would definitely mention "AIAIAIAI" and make AI a new investment theme.

Overview: Why Games?

主要观点是：

translates to

The main point is:

An energetic consumer ecosystem has developed around gaming;

Games are usually the killer app on new platforms;

Today's games are also a huge social network;

Nowadays, the gaming industry has undergone significant changes.

Andrew: Games are driving the GenAI revolution, and these games are showcasing their cultural power at the "miracle moment", because some games, such as The Last of Us and Super Mario, are expanding their entertainment IP and becoming movies, etc.

Why now?

a16z elaborates on four aspects.

Emerging Markets: There are over 3 billion gamers in the world today.

Youth: 250 million children become lifelong gamers.

COVID-19 Pandemic: Accelerating the Entry of Non-Traditional Gamers

Web3/VR Wave: In 2021, Web3 games exploded and VR/AR reached a turning point.

Andrew: This is a presentation on "Why Now", but today we will update this slide using AI AI AI AI AI AI :).

Core Investment Areas:

Game Studio: Invest in the next generation of games, such as cross-platform and business models based on online revenue, led by players.

Game-related consumer applications: For new platforms, games are often the biggest killer application, from PC to MOBILE to VR/AR, and now to Web3.

Infrastructure: According to a16z, software and tools built for gaming will become the building blocks of the MetaVerse.

Andrew: Last year, we mainly focused on game studios, Web3, and infrastructure. This year, we will continue to maintain this focus, but we are truly shifting towards the field of artificial intelligence.

Only in the first quarter, we encountered over 100 AI x Games companies. By 2023, 80% of game funds' investments will have a primary artificial intelligence component - reshaping core gameplay or creating tools. We need to balance our investment approach to cover all key areas of the game while also adapting to new trends.

a16z What are the advantages of investing in the gaming industry?

a16z believes that their advantages lie in the following areas:

A seasoned investment team with extensive experience in the gaming industry, such as partners from major gaming companies like Riot/Tencent.

A specialized operation platform for gaming companies;

Inter-game communication and integration, such as games and Crypto/FinTech/Consumer.

a16z has ten years of experience investing in games.

Among them, a16z emphasized a platform they built for game founders, which can provide assistance in early financing, publishing, marketing, growth, recruitment, commercialization, etc., and has established cooperative relationships with the world's major game companies.

Powerful post-investment has always been a characteristic and advantage of a16z, and its related operations personnel account for the vast majority. Therefore, in the eyes of many people, a16z is more like a company or media rather than a VC.

Andrew: One of the main aspects of a16z's differentiated investment is that we can help the operational teams of the invested companies. In fact, the vast majority of a16z employees focus on this, with only a small portion dedicated to investment. Game startups need this help: recruitment/creators/distribution/publishing.

Last year, we hired @DougMcCracken from Supercell to lead marketing, @Chen from Youtube to lead the "creator" field, and @justmazer from Riot to lead talent recruitment. Everyone has an entrepreneurial mindset, and we all act like owners, working without clear instructions. (And more people have joined!)

Andrew: Given the economic downturn, we have spent countless hours managing our investment portfolio to maximize its long-term potential for success. This is where a strong operations team comes in. Builders need help from builders, and we formed a team in our first year, hiring talent from Blizzard, Supercell, Youtube, Riot, Twitch, and Unity!

Recently, we have also established SPEEDRUN, our game entrepreneurship school, to make it easier for new founders to get started.