Microsoft is seeking to acquire Discord, a popular messaging app used primarily by gamers, for over $10 billion according to Bloomberg sources. These reports claim that Discord reached out to Microsoft to gauge interest, and Xbox chief, Phil Spencer, has been part of these chats.
These talks are still preliminary as other potential buyers such as Amazon and Epic Games have also expressed interest in acquiring the company. In addition, going public as an IPO (Initial public offering) is also a real possibility for Discord instead of seeking acquisition from private investors. In December 2020, Discord was valued at $7 billion so it comes as no surprise that they are receiving offers of this magnitude.
Discord’s software is free, but the company makes money through a monthly subscription service called Nitro ($9.99 per month or $99.99 per year) that offers more advanced features like bigger uploads, extra profile customization, and higher resolution streams. This monetization method has helped raise nearly $600 million to date and the app is able to maintain upwards of 140 million monthly active users. In recent months, Discord has expanded from a chatting platform for gamers to a universal multi-purpose communication software in response to the significant increase in users, due to the Covid-19 pandemic.
If Microsoft manages to secure Discord, it would be interesting to see how they will implement the app into their Xbox platforms for easy and reliable communication between users. We’ve already seen Nitro subscribers rewarded with Xbox Game Pass memberships and exclusive perks for games such as Gears 5, so it would be wise to assume that similar bundles could accompany an acquisition by Microsoft.
However, the deal is still far from confirmed and both parties have not commented or responded to these reports yet.