Andreessen Horowitz is raising a new gaming-focused fund and has added two general partners to lead it

The firm announced on Tuesday that it's promoted general partner Jonathan Lai and hired James Gwertzman, from Microsoft's gaming division, to spearhead the effort.

In a blog post announcing the changes, general partner Andrew Chen hinted at the new fund. 

"We're investing in nascent game studios, new infrastructure, and platforms for building the games and games-adjacent social apps that aim to connect gamers," Chen wrote. "But together we're kicking off a huge effort to do more — a lot more."

The fund has been in the works for several months, according to two sources. When it closes, it will be the sixth fund Andreessen Horowitz has rolled out in 18 months. The titanic $2.2 billion crypto fund was the firm's largest sector-specific fund ever. Substack writer Eric Newcomer first broke news of the gaming fund earlier in September.

Sprinting to back the next Roblox

There's been a surge of gaming-specific funds over the last decade, but they're mostly small vehicles of less than $200 million, according to a report by Evan Van Zelfden, the managing director of Games One, an advisory firm.

The interest in gaming from a flagship firm indicates the sector's growth, as millions of people headed indoors for long periods during the pandemic lockdowns. The video-game industry made more money last year than global movies and North American sports industries combined, according to data from market intelligence firm IDC.

After it led a funding round for Roblox, valuing the online game company at $4 billion, Andreessen Horowitz began plugging more money into gaming. It's backed startups such as Parsec (acquired by Unity), Sleeper, Forte, Mainframe Industries, Lowkey, and others — investing in both gaming studios and tech companies related to games.

To be sure, Andreessen Horowitz isn't new to the sector. The firm cinched its first hulking exit in gaming when Facebook bought Oculus for $2 billion in 2014. It's also an early investor in Sandbox VR, a startup that's bringing virtual reality experiences to malls and stores. That company impressed the firm so much that, in 2019, some partners flew back from Las Vegas to hammer out a $68 million deal at an In-N-Out in the middle of the night.

Chen, who's led many of its gaming investments, told VentureBeat reporter Dean Takahashi in an interview last year that the firm seeks to back the alumni of blockbuster gaming studios. Chen makes a pitch to those teams spun out of Riot Games, Blizzard, and Epic Games that they could finance their games using publisher money — and hand over their IP and creative direction — or raise money from VCs.

"It allows young teams with a lot of hustle, teams with a lot of creative vision and impact, to be able to build the games that they want on their terms and bring them to market directly, where they have a direct relationship with their customers," Chen told Takahashi. "Then they can build it into potentially a multi-billion-dollar outcome."

Lai, the recently promoted general partner, has deep ties to those networks. He previously worked as a product manager at League of Legends developer Riot Games and led the games investments team at Tencent.

Gwertzman also brings connections and operating experience as a repeat founder and executive. He built a games-infrastructure startup, called PlayFab, and sold it to Microsoft, where he joined as a general manager in 2018.

On Twitter, Gwertzman said he's looking forward to serving developers on the investment side.

"There has never been a more exciting time to be in games," he wrote.