Microsoft is in discussions to acquire online messaging and chat company Discord for $10 billion, it has been reported by Bloomberg. However, no deal is imminent, with a number of other companies also in the running, and Discord is weighing up going public instead of selling itself.
If Microsoft does buy up Discord, it would be the latest in a long line of big money acquisitions by the tech giant. They acquired previous online chat giant Skype for $8.5 billion in 2011, snapped up business networking platform LinkedIn for $26.2 billion in 2016, software development platform GitHub for $7.5 billion in 2018, and bolstered their first party studios with numerous acquisitions that has (so far) culminated in the $7.5 billion purchase of ZeniMax Media and Bethesda earlier this month.
It’s worth noting that the reporting suggests that Discord is looking for suitors, apparently also holding discussions with Epic Games and Amazon.
Discord has rocketed to prominence since its initial release in 2015, initially positioning itself as a meaningful alternative to in-game voice and text chat options, and to Skype and TeamSpeak as other external VoIP platforms on PC. In particular, it boasted lower system resource usage, as well as offering permanent servers that allowed for persistent community hubs to exist – ideal for MMORPGs like World of Warcraft and clans for competitive esports games like League of Legends and Overwatch.
The platform’s growth has continued through 2020, doubling the monthly user base to 140 million, and seeing a change in company motto from “Chat for Gamers” to “Chat for Communities and Friends”, and introducing a new slogan “Your place to talk”.
Despite all of this, Discord is yet to turn an annual profit. Though it is immensely popular, it is free to use, only offering a $10 per month premium Nitro subscription, having discontinued its digital game store in 2019.
There’s also one place that Discord cannot conquer on its own, and that’s console gaming. Discord currently lives in mobile and computer apps, as well as in browser windows. Microsoft and Discord support connecting Xbox Live accounts with Discord, but there’s no apps available on Xbox or PlayStation to allow for native chat on the consoles. Analyst speculation is that Microsoft could purchase Discord and integrate it into Xbox, offering the service’s premium Discord Nitro as a perk for subscribing to Xbox Game Pass.
Of course, there are concerns with this. Microsoft’s previous purchase of Skype has not gone well for the once dominant VoIP platform, and it has faded into obscurity. Skype was integrated into Xbox One at launch, but eventually sidelined as users preferred the built in friends and party chart. The difference is that Discord is already popular with gamers, and there’s been a sizeable contingent of gamers calling for Microsoft to integrate Discord support into the Xbox system software with an app.