Market Insider By Peter Tremblay 158 Views

Microsoft Wants to Buy Discord for More Than $10 Billion

Discord is known as being the primary communication platform for online streamers, content creators, developers, and gamers. Plenty of people in Toronto are signed into Discord right now. Even some companies are embracing Discord and using it to replace Slack, Zoom, and Microsoft Teams.

However, Microsoft recently expressed an interest in buying the communication platform- for $10 billion! Epic Games Inc. and Amazon discussed possibly purchasing Discord in the past but never moved forward with it.

What Is It?

Discord is based in San Francisco and is well known in Toronto as the free service that keeps video game lovers in touch. However, with many people now stuck at home, everyone is using the platform. It provides great ways to stay in touch.

Many use it as a place for virtual gatherings. Clubs, classes, and study groups all use Discord to meet over video and use messaging. The app has more than 100 million active monthly users and is quickly broadening its horizons. With more and more people investing in tech, it is important it is easy for anyone to access.

How It Started

Discord was always meant to help gamers stay connected. The creator, Jason Citron, had previously worked on social gaming platforms. He wanted an easy way for him to communicate strategies in games that software at the time was not providing. This led to Discord being developed.

It was released in 2015 and became widely used by esports and streamers, although Citron never had a specific target audience in mind. As the audience grew, the app’s slogan changed from “Chat for Gamers” to “Chat for Communities and Friends”.

As more people want easy ways to communicate online, Discord was there to provide them. It has become a very popular tool and is likely to continue to grow for a long time- making it very appealing to companies.

Sales Talks

Discord is not currently a public company. It is owned privately and funded by around $500 million in venture capital, which is provided by many investors. Recently, however, Discord has been talking to potential buyers.

One that stands out is Microsoft, as the company is a tech giant. There is no deal imminent yet and there are rumors that Discord will become a public company instead. Still, Discord is engaged in sales talks with multiple businesses.

Microsoft attempted to buy TikTok and Pinterest last year and still is shopping around for other platforms. Microsoft seems to be looking to social media platforms that already have many users, which allow them to expand even faster.

As Discord continues to grow into a platform for everyone to use to stay in touch, more companies are likely to come forward with sales talks. Still, Microsoft seems to make the most sense as a potential buyer. The company would be able to provide more software services to the platform.

The discussion has been going back and forth, but Microsoft has offered $100 million to acquire the platform.

Discord Users are Concerned

Many Discord users are worried that Microsoft will treat their favorite app the way they treated Skype. Microsoft bought Skype back in 2011 and since then, it has greatly declined in many ways. Users are concerned that Microsoft will do this again.

However, Microsoft buying Discord would go differently. The company wants Discord to keep its gaming focus and integrate it into its Xbox features.

Why Microsoft Wants Discord

Discord is popular with gamers all over the world. That makes it fit quite nicely with Microsoft’s Xbox console and services. Most of Discord’s user base is made up of those interested in games; they want to communicate with each other through the app.

Microsoft is also one of the few companies that can afford to buy Discord right now. Especially with a $10 billion price tag on the app- not many other companies are looking to buy it. Sony, Nintendo, Epic Games, and EA could not manage that steep price point.

While Facebook could afford it, they currently have a few antitrust lawsuits against them for their acquisitions of WhatsApp and Instagram. The company is probably not going to buy another platform with that happening.

Conclusion

All that being said, Discord currently has no official plans to sell its platform to Microsoft. The software giant has only made an offer so far; it is not clear yet whether Discord is going to take the deal or not.

If Discord were to be acquired by Microsoft, the two would be able to grow together. Discord would have more access to software and technology, while Microsoft would have access to a much larger audience.

What do you think about Microsoft offering $10 billion to acquire Discord? Be sure to leave us a comment below with your thoughts. We also have plenty more technology articles for you to check out.



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