Microsoft May Buy Discord for $10+ Billion

Posted on March 23, 2021 by Paul Thurrott in Games, Xbox with 30 Comments

Multiple independent reports state that Microsoft is in early talks to buy the messaging platform Discord for over $10 billion. The platform is popular with video gamers, so Microsoft would probably integrate it more deeply with Xbox.

News of the Microsoft/Discord talks comes via Bloomberg, The New York Times, and Venture Beat, and each claims that the discussions are early and may not culminate in a sale. Indeed, Discord has been investigating going public in recent weeks and it is apparently more likely that it will pursue that avenue instead.

“I know they are in active discussions with a select few parties,” one source told Venture Beat. “The market is in a state where they could command strong double-digit billions of dollars.” Those other parties include Amazon and Epic Games.

Discord is described as a social media company by some and as a messaging platform by others. It aims to create communities of users, and one of the more popular uses of the service, which commands 250 million users overall and over 100 million monthly active users, is among videogame players. Discord currently has clients that run on Windows, Mac, Linux, Android, iPhone, and iPad, plus the web.

Microsoft had its own videogame streaming service called Mixer, but it shut it down in mid-2020 and then tried to purchase TikTok for about $20 billion. Since then, Microsoft has made the Xbox platform somewhat agnostic towards third-party services, but a community-based service like Discord could make some sense and pump up the userbase numbers.

Last year, Discord raised $140 million in funding based on a valuation of over $7 billion. It reportedly has about $100 million in annual revenues, based largely on a paid version of the service.

Tagged with

Join the discussion!

BECOME A THURROTT MEMBER:

Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Register
Comments (33)

33 responses to “Microsoft May Buy Discord for $10+ Billion”

  1. Avatar

    vladimir

    OMG, this would be a very relevant acquisition. I still wonder why they gave up on Mixer. Discord is huge in the gaming world. It's also expanding in the business sector and it may actually be in competition with Teams

    • Avatar

      Paul Thurrott

      Microsoft gave up on Mixer because it was unprofitable and never attracted enough users to justify the cost.
      • Avatar

        wolters

        In reply to paul-thurrott:

        So do you think this could "kinda-sorta" replace Mixer? I find Twitch an exercise in frustration when trying to stream on XBOX. I wasn't a huge streamer but anytime I played a game I would stream on Mixer because it was easy and my friends could easily jump in.

      • Avatar

        vladimir

        In reply to paul-thurrott:


        To be honest, I still don’t get it. They left a de-facto monopoly in the hands of twitch/amazon. Twitch is still not profitable today but growing exponentially. Obviously it was not enough to recruit Ninja to make Mixer relevant. If they thought that it would be enough it sounds very amateurish and a bit disappointing. Regarding profitability, surface is not likely to be profitable either. Probably game pass is not profitable today. These things take time. Game streaming is huge and I would have expected Microsoft to invest on it longer. I still wonder why they left this field

  2. Avatar

    remc86007

    I'm really having trouble trying to figure out how $10 billion dollars makes any sense. Maybe Microsoft is about to make a serious push into capturing more revenue from PC gaming? Valve won't be happy, but I think if Microsoft plays their cards right (mostly leveraging Game Pass), they could make serious inroads. Imagine if all new Zenimax/Bethesda releases were only available for purchase through the Xbox app. It might take a couple years, but I think Steam's deathgrip on PC gaming would begin to fade.

    • Avatar

      vladimir

      In reply to remc86007:


      why is Microsoft’s grip on pc gaming better than steam? Steam today is a much better experience than the Xbox app and the Microsoft store

      • Avatar

        MikeCerm

        In reply to Vladimir:

        Maybe it's not so much about Microsoft being better or worse, and just about having some decent competition for Steam. Sure, EA and Epic have their own marketplaces, but I would never buy anything through either one if it were available through Steam. Microsoft's PC+Xbox strategy could be a unique angle.

  3. Avatar

    gregsedwards

    So, when Microsoft buy Discord, should I go ahead and delete my account or wait for them to do it when they kill the service in 18 months?

  4. Avatar

    nbplopes

    There seams to be someone inside the company that it is a compulsive shopper.

  5. Avatar

    j5

    It'll be interesting if they do purchase Discord and how Microsoft treats both Discord and Teams going forward?

    Will they use features from Discord in Teams and vice versa? I think it's a smart purchase just based on that it keeps them in the ring far as having something that has popularity and longevity for them.

    • Avatar

      matsan

      In reply to j5:

      Given how terribly Microsoft managed Skype I wouldn't hold my breath.

      • Avatar

        hallmanac

        In reply to matsan:

        My perception was that Skype mismanaged Skype and that Microsoft senior brass largely left them alone.

      • Avatar

        j5

        In reply to matsan:

        I hear that all the time but Skype worked great when I used it personally and when we used it at work before transitioning to Teams. Why do a lot of people here say it was miss managed?

        • Avatar

          hallmanac

          In reply to j5:

          They went through a few UI "iterations" (to put it mildly) for no apparent reason other than they wanted to. Those UI overhauls confused many users.


          Many believed they should have used those development resources to address more problematic issues as well as add more useful features that weren't just UI related.

          • Avatar

            j5

            In reply to Hallmanac:

            Ah ok, sounds like it was behind the scenes drama. Well lots of people are still using Skype though. I think that's what they use for Windows Weekly no?

            • Avatar

              hallmanac

              In reply to j5:

              I believe so. I thought I heard them talking about switching to something new in a recent episode (I'm probably crossing my memories there). I know Paul has pontificated on all the issues he's had with it over the years.


              Either way, it's undoubtedly a useful application and still has huge name recognition and usage out in the world. I do think, however, it feels stagnant it its development. I can't articulate specifically why though since I don't really use it. :-)

  6. Avatar

    codymesh

    Wouldn't Microsoft ruin Discord just like how they ruined Skype and MSN (Windows Live) Messenger ? Just by virtue of Microsoft being so focused on Teams?

  7. Avatar

    glenn8878

    Microsoft is moving to Teams instead of Skype. They are orphaning Skype. Another technology down the toilet. $8 billion flushed down the drain.

  8. Avatar

    red.radar

    I think this is a smart move. However I bet Discord is just shopping around to justify their IPO valuation. I doubt this really happens.

  9. Avatar

    evox81

    Kind of hate to say it but... Goodbye Discord, it was nice knowing you.


    (I'll keep using Discord as long as it exists... but in Microsoft's hands, that may not be for long.)

  10. Avatar

    spacein_vader

    Have to say my initial response was "I hope they don't Skype this up".

  11. Avatar

    scovious

    This is a smarter choice with more potential synergy than Pinterest or Tik Tok. I hope they would be planning on treating it like their LinkedIn purchase and not like their Skype purchase. Having this integrated into Xbox would be a massive boon to cross platform gaming.


    Epic Games and Amazon have such a minor gaming presence it would be wasted on their smaller platforms, especially considering Sony and Nintendo would end up blocking it for cross play in favor of their own locked down integrated communication services.

  12. Avatar

    Cassius Clae

    I wonder if this has anything to do with the Xbox live recent name change. Could one part be the Xbox network and Discord becomes the social part of the Xbox community now?

  13. Avatar

    tripleplayed

    If Discord is on the market it is an absolute must buy if Microsoft wants to be at the top of the gaming market. 10 billion would be worth it.

  14. Avatar

    chump2010

    I have to ask what do they think they are going to do with this platform? They bought Skype ages ago and failed abysmally to do anything good with it. MSN messenger they shut down ages ago. Microsoft Lync was eventually morphed into something else. Is this just buying the competition - ie Discord is a potential competitor to Microsoft Teams. Different uses yes, but similar abilities. What Microsoft should really be doing, is seeing if they can integrate Discord user names into Microsoft Teams ie give you the ability to login to Microsoft Teams with your discord account. That way they can capture both sets of users - Teams users and Discord users. After that they can work out whether it is worthwhile to buy Discord.


    Otherwise all that will happen, is what has happened with most of their messaging acquisitions. Buy it, find that it is incompatible in some way, gradually disband the team and then create their own service.

    • Avatar

      chronocidal

      In reply to chump2010:

      My entire circle of gaming contacts abandoned Skype when it mutated into a bloated desktop SMS system, and just became a miserable experience for gaming. The last thing I want to see is for Microsoft to torpedo Discord the same way, and cause everyone to jump ship again to the next viable platform to use for a few years.


      If MS wants to adopt the way Discord manages contact lists, voice chat and streaming integration, then I don't blame them, it's precisely why so many gamers I know left Skype in the dust years ago. But Discord and Teams have completely different audiences, and I cannot for a moment believe that anyone I know on either Discord or Teams would ever want to merge those two facets of their digital lives.


      I can't consider Discord as a competitor for Teams at all. While the two share a functional basis, they need to stay separate to cater to their individual communities. If Microsoft wants to acquire them just so they can copy their infrastructure, that's fair, but don't bulldoze the gaming community in the process. Let the two exist side by side. The absolute last thing either community needs is to be merged.

      • Avatar

        vladimir

        In reply to chronocidal:


        I do use discord at work, in spite of having a m365 business subscription. If you only need chat and voice/video communication discord is a much better experience than teams. Obviously it lacks the integrations with other business services and SharePoint but many people don’t use those and they just bloat the system

    • Avatar

      Chris_Kez

      In reply to chump2010:

      Different platforms, users and use cases; there is room for both to accomplish their respective missions in totally separate parts of the company.

    • Avatar

      rsfarris

      In reply to chump2010:

      Even gaming stuff isn't necessarily safe either... *cough*Mixer*cough*. I agree with you. Anytime Microsoft buys anything that isn't a game studio, my default response is, well, goodbye *insert service*. It amazes me Skype has survived this long, but I think its days are numbered (at least it might be rolled into Teams somehow).

Leave a Reply