Pahdo Labs Raises $15M to Let Players Make Anime Games With AI Tools

Prolific investment firm Andreessen Horowitz (a16z) is expanding its footprint in the gaming and AI space, announcing Monday that it led a $15 million Series A raise for gaming startup Pahdo Labs, the company behind the upcoming anime-style action role-playing game (RPG), Halcyon Zero.

Along with an anime-inspired game world, Halcyon Zero will provide players with generative AI tools that let them quickly develop their own worlds for the game. According to a tweet thread from Andreessen general partner Jon Lai, Pahdo is “opening up creator tools for players to build their own anime games, enhanced via AI/procedural generation.”

Lai further emphasized that Andreessen Horowitz is keen on the potential of anime-style games, which break from the more realistic visual aesthetic of many “AAA” games today. He cited the hit game Genshin Impact, which has generated more than $3 billion in revenue since 2020, along with growing anime viewership on streaming platforms and expanding “vtuber” use.

Founded in 2021, New York-based Pahdo Labs aims to build games that allow players to “make a long-lasting impact in a shared world,” according to its website. Pahdo did not officially announce other Series A investors, but Crunchbase notes firms like BoxGroup, Long Journey Ventures, PearVC, and 2 Punks Capital as participants in the round.

Generative AI tools are increasingly being adopted by online games and metaverse plaforms to let players develop user-generated content (UGC) more easily than in the past. Other platforms and publishers using AI technology to facilitate game development include Roblox, Ubisoft, Hiber3D, and Blizzard.

“With generative AI tools lowering the barriers to entry for creation, we believe the velocity of player creativity is at an inflection point today,” Andreessen Horowitz wrote in a statement. “We’re very excited about the potential for AI-assisted UGC to transform IP into dynamic, never-ending game franchises.”

Billions of dollars in investments have gone into the generative AI field since last November's public launch of OpenAI’s ChatGPT, with companies like Microsoft, Google, Meta, and Amazon all diving heavily into the emerging technology.

Earlier this year, a16z led another Series A round for AI chatbot developer Character AI totaling $150 million, which included investments from Nat Friedman, Elad Gil, SV Angel, and A Capital.

In June, UK-based AI startup Gensyn AI said it had secured $43 million led by a16z, with the aim of decentralizing machine learning. That same month, Andreessen Horowitz co-founder Marc Andreessen laid out the case for AI development.

"Big AI companies should be allowed to build AI as fast and aggressively as they can—but not allowed to achieve regulatory capture, [and] not allowed to establish a government-protect cartel that is insulated from market competition due to incorrect claims of AI risk," Andreessen wrote.

A16z and Pahdo Labs have not yet responded to Decrypt’s request for comment.