Microsoft May Buy Discord for $10+ Billion
- Paul Thurrott
- Mar 23, 2021
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33
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.
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“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.
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chump2010
<p>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. </p><p><br></p><p>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. </p>