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Chat Platform Discord Could Be Bought By Microsoft For £7bn

Sun Mar 28 2021

But… If the platform doesn’t get the right offer it’s prepared to go public instead

It’s been reported that Microsoft are in talks to buy the chat platform popular with gamers, Discord, for an estimated £7.25 billion ($10b).

According to sources close to the deal. Discord is currently exploring sales options and has reached out to several buyers.

It’s thought that, as well as entering talks with Microsoft, Discord executives are also speaking to Amazon and Epic Games, with Xbox chief Phil Spencer keen to make something happen.

However, a high up source at Discord, speaking with Bloomberg, stated that if a favourable deal couldn’t be found then the company was prepared to take themselves public instead.

 

The purchase of Discord makes sense as its popularity has soared during the pandemic, with many people furloughed and turning to video games for entertainment.

Discord, based in San Francisco, is a popular, gaming-focussed platform that lets anyone, chat via voice, text or video in real time whilst playing computer games with around 130 million current users.

That being said, the firm is keen to move away from their ‘gamer’ reputation and become ‘the’ place to talk. They’re also not currently profitable as most of their software is free to users. The revenue they do have coming in is based on micro-transactions or subscriptions that give users more advanced features such as additional sticker packs, HD screen sharing capability and a larger upload limit.

 

At their last valuation (last December) Discord was valued at around £5bn ($7bn) after receiving a round of funding of around £72.5m.

Discord wouldn’t be the only online community Microsoft would have purchased in recent years, as they currently own the likes of LinkedIn, Github and the game developer that created Minecraft to name but a few.

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Microsoft possibly acquiring Discord makes a lot of sense as it continues to reshape its gaming business more toward software and services. 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. We expect Xbox to remain acquisitive to keep bolstering the value proposition of Game Pass and drive subscriptions higher.

Matthew Kanterman – Intelligence Analyst, Bloomberg

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Sun Mar 28 2021

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