Negotiations are afoot as Microsoft pursues to acquire Discord for over $10 billion, according to sources. The popular gaming focussed messaging and VOIP service recently priced themselves at the ten billion figure due to multiple potential buyers’ interest.
Discord is a popular VOIP and messaging platform designed to create communities focussed on various topics, ranging from games to education. Initially released on May 13, 2015, the application is free to use and allows users to interact with other fellow users by joining servers or directly messaging them. The creation of said servers is free of cost, with each user can create or join a maximum of 100 servers in total.
Though some features such as sharing or using various animated emojis, increased resolution of screen sharing, and bigger upload limits are locked behind a small subscription fee of $10, the application still can be used and enjoyed thoroughly even without it.
Why is it important for Microsoft?
Boasting 140 million monthly users, which have only further increased with the onset of the global pandemic, Discord has piqued not only the interest of Microsoft but also of Epic Games and Amazon in the past. Hence further justifying the price tag it carries.
According to sources, the competitor to Teamspeak has already signed an exclusive acquisition discussion with a single patron signalling that a deal is on the horizon.
Irrespective, Microsoft has been busy trying to acquire various social media applications like Tiktok since last year and even held a review to acquire Pinterest. Unfortunately, such ambition turned vain as the multinational corporation failed to purchase them.
Though regardless of such a negative onset, Microsoft did secure ZeniMax Media, the parent company of Bethesda Studios, which created the Doom series and award-winning Elder Scroll series. This acquisition allowed Microsoft to add these amazing titles to their monthly subscription named Xbox Game Pass, making it more valuable in the eyes of gamers who love a varied library of games.
Mathew Kanterman, a Bloomberg Intelligence Analyst, commented that it made sense for Microsoft to further pursue various other acquisitions in the field of video games as they aim to reshape its business model in gaming more towards software and services.
This acquisition could be a game-changer for team Microsoft as it might signal the end of Xbox Live, which has been acting as the bridge of communication for various gamers since the early Xbox days. The number of users on Xbox live cannot hold a candle against the number of users being pulled into Discord. Also, purchasing Discord would allow the tech giant to combine the perks of Discord’s nitro and Xbox game pass, which might lead purchasers of either service to enjoy the best of both worlds.
“There’s a big opportunity to bundle Discord’s premium offering, Nitro, into the Game Pass service to drive more subscriptions from the last reported 18 million,” said the Intelligence Analyst from Bloomberg as he drew a tangent between the Xbox Game Pass offering and Discord’s Nitro.
Negotiations from Microsoft’s side are led by Phil Spencer, who is the Executive Vice President of Gaming in the corporation. The chances of Discord being purchased by Microsoft are high as sources say that Discord stretched out to the tech giant to measure their interest in the said acquisition.
But if negotiations do fail, the San Francisco based application, Discord, will be likely to go public rather than sell it for a lesser price tag as it stands strong to its competitors such as Teamspeak and Skype.
Another company that decided to go public earlier this month was Roblox. Being an online platform that gave the user freedom to create various games to play with other users, it had a solid market debut since it went public through a direct listing rather than IPO (initial public offering). This could also be an incentive for Discord to go public rather than sell its application for a lower price than what it says on the tag.