Anime as a media category has exploded in reach and cultural influence around the world. 69% of Gen Z watch anime and half of Netflix’s 222M subscribers watched anime in 2021, with total anime watch time growing 20% annually. VTubing – where creators live stream via an anime-style virtual avatar – is also becoming increasingly popular on Twitch, growing at 350% YoY.
In 2022, anime games accounted for 20% of total mobile game spend at $17B, not inclusive of PC/console spend. Anime games are also pioneering new standards of gameplay. Mihoyo’s Genshin Impact has grossed over $3B in revenue since taking the world by storm in 2020, and in the process also redefined the standard for cross-platform, live-operated role-playing games (RPGs). What Fortnite is to the West, Genshin Impact is to the East and increasingly the world at large.
That’s why we’re thrilled to announce that Andreessen Horowitz is leading the Series A in Pahdo Labs, a game studio building a next-generation anime RPG Halcyon Zero alongside a UGC platform for players to create their own anime-style mods and worlds.
We’re big fans of the Pahdo team’s approach. Halcyon Zero will be natively PC/mobile cross play and multiplayer, and Pahdo is opening up its developer tools for anyone to build their own anime games. The demand for anime UGC is real – fans are passionate about their favorite IPs and many have become content creators. Anime fan fiction is exploding and the average anime fan in Japan spends over $700 per year on anime-related merchandise.
Where Minecraft and Roblox have succeeded in building horizontal platforms with broad capabilities, we believe that a vertical-focused UGC platform like Pahdo’s will have a distinct advantage in super-serving the needs of a specific audience first. And with generative AI tools lowering the barriers to entry for creation, we believe the velocity of player creativity is at an inflection point today. We’re very excited about the potential for AI-assisted UGC to transform IP into dynamic, neverending game franchises.
Jonathan Lai is a General Partner and founding investor of A16Z GAMES. Jon focuses on investing at the intersection of games and consumer, social, web3, infrastructure, and fintech.
Joshua Lu is a partner at Andreessen Horowitz on the A16Z GAMES investing team, focused on game studios and the intersection between games and social applications.
Robin Guo is an investing partner with A16Z GAMES focusing in web2 and web3 studios, games adtech, AI applications for games, and the intersection of healthcare and games.