Azra Games raises $15M to take Web3 games to mainstream gamers

Azra Games, a blockchain games company aimed at building mainstream collectible and combat RPGs for the Web3 era, has raised $15 million in funding.

The company is run by Mark Otero, who previous led the development of Electronic Arts’ smash mobile game hit Star Wars: Galaxy of Heroes while he was at Capital Games. (Last year, the Star Wars game hit 100 million downloads).

Andreessen Horowitz (from both the newly announced games fund and their crypto fund) led the round, with participation from NFX, Coinbase Ventures, Play Ventures and Franklin Templeton.

In an exclusive interview with GamesBeat, Otero said Azra Games is on a mission to create deep, immersive game universes, with a specialized in-game economy and virtual collectibles, powered by Web3 technology such as non-fungbile tokens (NFTs). This seed funding will be used to accelerate development on Azra’s first game – an epic, fantastical collectibles and mass combat RPG titled Project Arcanas.

“As a kid, I spent countless hours role playing with all of my different toys,” said Otero. “At Azra, we are making a game to recreate this joy, to re-engage adults’ imaginations once again with the ultimate collectibles fantasy, combined with the ultimate fast-paced mix-and-match combat that is accessible yet deeply strategic. Imagine role playing giant monsters, robots and creatures, and leading your favorite heroes and villains to battle – and on top of satisfying game sessions, a vibrant marketplace and a sustainable economy based on real value that only web3 can unlock to deliver the most compelling and complete play experience.”

Otero is working with fellow entrepreneurs Sonny Mayugba and Travis Boudreaux. The company has also hired veterans from Capital Games. Their new title must be exciting as Electronic Arts recently announced that those who stayed at Capital Games are working on a pretty exciting mobile game based on The Lord of the Rings franchise.

“CEO Mark Otero is a seasoned game director who was at the forefront of mobile free-to-play games with the hit franchise Star Wars: Galaxy of Heroes,” said Jonathan Lai, general partner at A16z, in a statement. “We’re excited to partner with Mark and the Azra team as they apply their expertise to web3 games in creating new types of gameplay and economy design.”

Otero said Azra Games is re-imagining the delights of collecting toys and limited edition items through a dedicated NFT ecosystem. Azra’s first game will be prolific gamemaker Otero’s ninth in collectible and combat RPGs, as he is joined by a veteran game team with a deep history in the genre.

“We are incredibly impressed by what the team is building,” said Gigi Levy Weiss, NFX general partner, in a statement. “I believe Azra will be the first games company that will unlock the happy blend of games and digital ownership and offer ultimate value and entertainment to players.”

Azra Games’ backers represent selective and successful key figures across games and crypto companies and investors and also include industry luminaries like YGG co-founder Gabby Dizon, Twitch co-founder Justin Kan, and Dapper Labs co-founder Roham Gharegozlou.

Origins

Michael Chang, founder of Mavent Partners, is an adviser to Azra Games, as he knew Otero and his team going back to the days when Electronic Arts acquired Otero’s former company, KlickNation, which became Capital Games. (Chang, formerly of EA, met Otero at a GamesBeat event).

“We did close this rather fast. We started raising this round [in mid-February]. And we closed this round about a week ago,” Chang said. “These groups recognized very quickly there was something interesting here, and they moved appropriately.”

After leaving Capital Games some time ago, Otero took a break from gaming. Then he started trying to do some programming on the blockchain, and he felt like he had an “aha moment” as he fell in love with the concept of gamers being able to own the game assets that they purchased. Normally, players essentially rent the things they buy, and if the publisher ever shuts down, the players lose their whole investment. With NFTs, Otero felt like players could authenticate their unique items and truly own them.

“Others have talked about this, but it really just kind of blew me away that the players can own the assets, and through ownership, they can do so many things with them,” Otero said. “They can recombine them with other assets, they can rent them, they can sell them. And so this was true ownership for the first time, and I just knew that it was going to come to gaming in a way that didn’t exist before in a free-to-play world. When players are purchasing virtual goods, they don’t really own them. They can use the assets. And that’s about it.”

This idea motivated Otero to start the new company and go to work on his ninth collectibles and combat RPG game.

“It’s a genre that I’ve honed over the years. And, you know, I made a lot of mistakes, and then learned what worked and what didn’t, and really just kind of pushed me on innovating with each one.”

Otero also worked on Heroes of Dragon Age, Supreme Heroes, Age of Champions, and Superhero City. During his time at KlickNation/Capital Games, the team grew to 76 people and it produced the smash hit Star Wars: Galaxy of Heroes.

As for the new game, Otero said, “I won’t go into too much detail today. I will save that for another conversation. There was one big thing I wanted to solve in the RPG world, and I believe we’ve solved it. And it’s an opportunity for us to re-envision what RPGs need in terms of how the player experiences play. And what I mean by that is, growing up as a kid I think you can relate to this story, is I had a box full of broken toys and misfit toys like GI Joe, Star Wars, and more. And I remember doing these epic battles just mix and match.”

He added, “And I never felt that I was able to capture this in any of the games we’ve done before. And so I was really inspired by these childhood memories. And now that I’m a father of two sons, I’m able to just watch them play with their toys, and they don’t have any rules like games have. And so I’m just able to just watch their unlimited capacity to roleplay and mix and match. And really, that’s the inspiration of what brought me back.”

The new studio is about a mile from the original game studio, and about 70% of the new team at Azra Games worked at Capital Games before. Azra Games now has 24 people.

“We’ve assembled a team here which is super impressive,” he said. “I’ve worked with them for years, released multiple games with them. We’ve brought the band back, you know, to build an incredible RPG experience on chain.”

Otero, who grew up in South Korea playing Dungeons & Dragons and then eventually immigrated with his family to Sacramento, said he will enjoy being a Dungeon Master again. (I noted that gave me a clue, as he clearly didn’t say he would be a Jedi Master again). As for passing up the chance to make a game based on The Lord of the Rings, Otero said, “In a few months, when we get to reveal a lot more about the game, I think it’s going to excited gamers out there.”

Otero said the round was oversubscribed and the investors are aligned with the vision.

Blockchain technology

As for the specific type of blockchain technology the company will use, Otero said in an interview, “We are taking our time and we’re in no rush [to identify the tech stack]. That’s because we’re focused on quality gameplay first. And we are aiming to build a genre-defining game for the RPG space in general. And blockchain is really going to amplify that experience. We need the technology amplifying the experience as opposed to it making the game and so we’re just religiously focused on the gameplay.”

Asked about the objections that some developers and hardcore gamers have about the blockchain tech, Mayugba said that a lot of developers raced into the blockchain game space with the wrong approach.

“They really created games with unsustainable economies,” Mayugba said. “Having read just so many different white papers, I can say that [the bad reputation] is definitely well earned. And so as we enter the space, we’re doing so very, very carefully and thoughtfully. And so first of all, we feel no pressure to do anything other than build a great game. And so we’re going to build a great game first and foremost. And then it just so happens that the blockchain will amplify our gameplay.”

Otero hopes the team’s credibility will help it succeed with the NFT-based game. That is why the company started its funding with credible game VCs rather than an NFT token sale.

Otero said he has his own philosophy of fun and how to build great games. He noted some of the NFT game entrepreneurs have never built games before.

“That’s becoming very clear. And so there is a bit of a backlash against that. And once again, that’s very fair,” Otero said.

Otero said the hardest thing is to build a fun game, but once you do, it will retain users, and they will want to keep playing the game.

“Therefore, the assets within the game itself have immediate utility. And so really, utility of the asset is really the function of the quality and fun of the game. And so that’s, that’s the part where most people miss because I don’t think they know how to design a fun game,” Otero said. “And so that’s one. Two, once you design a fun game, the assets immediately have a variety of utilities. Some are very, very obvious things like after you’re done using something, you could rent it out to other people to enjoy, or you can resell it in the marketplace. And so immediately, just very obviously, you have immediate utility because your game is fun and players desire those assets.”

He added, “The second thing is this. The blockchain and ownership also provide a new type of player type where players can compose many of their own assets, players can specialize in building assets within a game that are interesting to other players.”

Mayugba said that the company isn’t disclosing which technologies it will use yet. But he said the company will closely at how the tech affects the user experience. And it will evaluate the different tradeoffs among the technologies that are available in terms of types of blockchains or partners.

“We want to make sure that we have a partner that can work with us and scale with us,” Mayugba said.