Group chat application Discord saw a surge in popularity in 2020 due to the rise of gaming and its use as an alternative to Zoom. Now, reports are coming in of Microsoft buying Discord for a reported $10 billion or more.
According to a Bloomberg report, the talks around Microsoft’s of Discord acquisition are led by no less than Phil Spencer himself, Xbox’s figurehead and the Executive Vice President of Gaming at Microsoft. VentureBeat, on the other hand, reported that Microsoft had has made an offer of at least $10 billion dollars which suggests that a deal is imminent.
That said, neither report nor the personalities close to the matter have confirmed the finality of the acquisition.
This deal is not the first time Microsoft has acquired an essential or popular service. Microsoft has already acquired GitHub for $7.5 billion last 2018 and even acquired Minecraft for $2.5 billion during the same year. Major VoIP service, Skype was also acquired by Microsoft back in 2011 and Twitch competitor, Mixer back in 2016.
The rumored acquisition has also generated a lot of discussion on social media. Here, fears were running rampant that Discord would go fully commercial and that its key services that are currently provided free-of-charge may be monetized in the near future. (Read: Twitter is testing out new feature “Spaces” voice chat room)
Discord primarily relies on its Nitro subscription service to make money. The service adds expanded features to Discord servers, including various profile customization tools, server boosts, bigger uploads and higher HD video streaming. Server boosts, in particular, allow Discord servers to receive more custom emojis and emotes, better voice quality channels and an increase in upload size limit for all server members.
Esports commentator Rod “Slasher” Breslau also shared his thoughts regarding the ongoing talks for the acquisition. He specifically took jabs at Microsoft’s acquisitions of Skype and Mixer, both of which ended up being shut down after losing much of their user bases, having seen to have failed to match up against its rival competitors.
But in a follow-up tweet, Breslau also admitted to the possibility that Discord might thrive in a way similar to Minecraft, which is considered one of the biggest videogame titles to this day and GitHub, which has remained an essential tool for programmers and developers. Breslau conceded that the acquisition may be Discord’s best option at “staying good.”
Microsoft is in talks to purchase Discord for more than $10B according to Bloomberg. based on the history and state of Mixer and Skype I'm sure nothing could go wrong 👍
— Rod Breslau (@Slasher) March 23, 2021
Discord is coming hot off the heels of a stellar year in 2020 where the company’s userbase grew to over 140 million monthly active users, over 300 million accounts and generated $130 million in revenue—a 188 percent growth from last year. Currently, Discord is reportedly valued at $7 billion, more than twice its reported value last year.
Aside from Microsoft, Bloomberg also reported that Discord has had previous conversations with Amazon and even Epic Games for possible acquisition. That said, in the same report, Bloomberg also hypothesized Discord mat instead go public rather than get itself bought.
While no official announcement has been made, Microsoft buying Discord could potentially be one of the largest tech acquisitions for the first quarter of 2021. Other notable acquisitions during this time include Okta acquiring Auth0 for a massive $6.5 billion all-stock deal, Cisco acquiring optical technology company Acacia for $4.5 billion and Qualcomm acquiring high-performance CPU chip-makers Nuvia for $1.4 billion.
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