Why did Deck choose to bet on games after raising $600 million in gaming funds?

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

On the first anniversary, Andrew Chen, the manager of Games Fund One, disclosed the fundraising deck of the fund in 2022. Deep Tide TechFlow interpreted it and added Andrew Chen's current comments. For example, in Andrew Chen’s opinion, if he wrote this Deck today and talked about why he is investing now, then he would definitely write “AIAIAIAI” and take AI as a new investment theme.

Overview: Why Games?

The main points are:

A vibrant consumer ecosystem has developed around games;

Games are often the biggest killer app on new platforms;

Games today are also a massive social network;

Today, the game has also changed dramatically.

Andrew: Ah, because some games, such as The Last Survivor, Super Mario, etc., are expanding their entertainment IP and turning them into movies.

Why now?

a16z elaborates from four aspects.

Emerging Markets: There Are Over 3 Billion Gamers in the World Today

The younger generation: 250 million kids are lifelong gamers

The Pandemic: Accelerating the Entry of Non-Traditional Gamers

Web3/VR wave: Web3 games will explode in 2021, and VR/AR will be at an inflection point

Andrew: Here's the slide on why now, but today we're going to update that slide with AI AI AI AI AI AI :).

Core investment areas:

Game studios: Invest in next-generation games, such as cross-platform, business models derived from online revenue, dominated by players

Gaming-related consumer applications: Gaming is often the biggest killer app for new platforms, from PC to MOBILE to VR/AR to Web3.

Infrastructure: In a16z's view, software and tools built for the game will be the building blocks of the MetaVerse.

Andrew: Last year we were mostly focused on game studios, Web3 and infrastructure, and this year we're continuing that focus but really moving into the AI space.

In the first quarter alone, we encountered more than 100 AI x Games companies, and by 2023, 80% of the investments of game funds have a major artificial intelligence component-reshaping core gameplay or creation tools. We need to balance our investment approach to cover all key areas of the game, while also adapting to new trends.

What are the advantages of a16z investing in the game field?

a16z believes that their strengths lie in the following aspects:

An investment team with senior experience in the game industry, such as partners from major game companies such as Riot/Tencent;

Own a professional operating platform for game companies;

Cross-game communication and integration, such as games and Crypto\financial technology\consumption;

a16z has ten years of experience in investing in games.

Among them, a16z focused on an enabling platform they created for game founders, which can provide assistance from early financing, distribution, marketing to growth, recruitment, commercialization, etc., and cooperates with the world's most important game companies. A cooperative relationship has been established.

Strong post-investment has always been the feature and advantage of a16z, and the relevant operating personnel also account for the vast majority of it. Therefore, in the eyes of many people, a16z is not so much a VC as a company or a media.

Andrew: A major part of a16z's differentiated investments is that we can help the operating teams of the invested companies. In fact, the vast majority of a16z's staff is focused on this, with only a small percentage focused on investing. Game startups need help with: recruiting/creating/distributing/publishing.

Last year we hired @DougMcCracken from Supercell to lead Marketing, @Chen from Youtube to lead the Creator space, and @justmazer from Riot to lead Talent Acquisition. Everyone has an entrepreneurial mindset, and we all act like masters, working without clear instructions. (And many more to join!)

Andrew: Given the poor economy, we've spent countless hours working on our portfolio to maximize its likelihood of long-term success. This is when the operations team is so strong. Builders need to help builders, we built the team in our first year and hired talent from Blizzard, Supercell, Youtube, Riot, Twitch, and Unity to join us!

In recent months, we've also established SPEEDRUN, our game startup school, to make it easier for new founders to get started.