The Future of Game Development: How GenAI is Transforming the Industry

Series, a game development platform powered by GenAI, has successfully secured $28 million from investors including Netflix, Dell, a16z, and others, all without much fanfare.

This year has been particularly fruitful for Penny Charitatos, head of the gaming industry. Last month, he quietly closed a Series A funding round, raising $28 million for his new startup, Series Entertainment, as confirmed by SEC documents and the company itself. Notable investors include Netflix, Dell Technologies Capital, along with follow-up contributions from early-stage investors like Andreessen Horowitz, BITKRAFT, and F4 Fund. This funding comes just a year after launching the company with a strong seed round of $7.9 million led by a16z.

In addition to securing funding, Series has already made a strategic acquisition. In July, the company purchased the mobile game studio Pixelberry, which is known for its interactive storytelling game, Choices: Stories You Play.

Also referred to in the industry as Series AI, the company aims to create video games utilizing large language models (LLM) and GenAI technologies. More ambitiously, it seeks to become the next Unity, empowering a legion of game developers. Charitatos and his team developed the Rho Engine, which leverages GenAI to assist game developers in rapidly creating games.

While skepticism exists regarding LLMs being a cure-all as touted by their most vocal proponents, the gaming sector is undoubtedly a realm where AI can thrive. Rather than manually designing every element, from characters to potions, game developers can leverage AI to enhance the interactivity of their games. Non-player characters (NPCs) could evolve into rich, fully realized figures that engage in trade with players, while players might enjoy extensive, possibly limitless customization options.

To realize these ambitions, developers need game engines equipped with advanced AI capabilities. Series claims Rho is the first fully integrated AI game development platform, handling everything from visual effects to sound. There are other AI-driven game engine competitors, such as Modl.ai Engine and Unity's Muse Chat. However, Rho positions itself as a more comprehensive solution, focusing on full-stack game development rather than just error detection or assisting as a basic AI tool, as with Muse Chat.

A16z investors Joshua Liu and Andrew Chen were enthusiastic about their investment in Charitatos a year ago, posting a blog entry that described Series as "a gaming studio and technology company redefining the future of game development through generative AI."

Part of the excitement for these investors stemmed from Charitatos himself. With decades of experience in game development, he has consistently been at the forefront of industry trends. When Adobe's Flash Player emerged as a multimedia technology in the late 1990s, he founded his first studio, which created browser-based games, ultimately selling it to Zynga. He later established a mobile gaming studio and sold it to Kongregate, a platform that thrived during the Flash gaming era. Charitatos then became CEO of Kongregate before selling it to the Swedish gaming firm MTG. In 2020, he was hired to lead Snap's gaming division, focusing on augmented reality and embedded games.

These credentials are a significant reason why his investors are among the biggest names in the gaming industry. Alongside support from a16z's gaming fund, Series attracted BITKRAFT, founded by esports pioneer Jens Hilgers, a co-founder of ESL and G2 Esports, who is one of the most active investors in gaming. F4 Fund, managed by David Kay and Joakim Ahrén—both of whom have built and sold multiple studios—also shares this commitment.

According to the company, Series' staff has expanded from 17 employees at the beginning of 2024 to over 100 today, including talent from Zynga, Machine Zone, Google, and Snap.

Although Charitatos declined to give an interview after TechCrunch reported the Series A funding, his team provided a statement praising the investors and expressing excitement about raising $28 million during a challenging funding year.

Pitchbook estimates that Series A accounted for about 15% of the company, valuing it at $190 million post-investment. The company chose not to comment on the accuracy of this figure.