Report: Microsoft in talks for $10 billion acquisition of Discord

Microsoft is reportedly in the late stages of $10 billion acquisition talks with Discord, a gaming-focused community chat platform, according to unnamed “people familiar with the matter” who spoke to Bloomberg.

Epic Games and Amazon were also involved in acquisition talks previously, according to Bloomberg’s sources. VentureBeat also reported this week that Discord is exploring sale options with “multiple parties.”

First launched in 2015, Discord lets individual users create public or private servers that allow members to chat with others in that server via text, images, voice, and video livestreaming. The service now reportedly has 6.7 million such servers, which serve as centralized communication hubs for everything from official news and discussion from game publishers and multiplayer match organization among small groups of friends to a chaotic gathering place for people betting on the stock market—and everything in between.

Discord reportedly has over 140 million monthly users and 300 million registered accounts. In December, the company raised $140 million at an implied valuation of $7 billion, according to TechCrunch, more than doubling its valuation in under a year.

The Wall Street Journal estimates that the company brought in roughly $130 million in 2020, primarily from sales of a $100/year premium service called Nitro. Back in 2018, Discord also started offering direct game sales through the platform, undercutting competitors like Steam and the Epic Games Store by offering developers a 90 percent share of revenues. In 2019, the company shut down a separate offering that provided Nitro subscribers with free access to roughly 100 games, citing low usage.

Microsoft is less than a year removed from the shutdown of Mixer, its heavily promoted, game-focused livestreaming platform, which included a $20 million exclusivity deal with Tyler “Ninja” Blevins. Last year, Microsoft was also reportedly in talks to acquire social video network TikTok when it looked like the Chinese-owned service would be forced to sell its American arm to an American company.

Microsoft also owns Skype, which many gamers used for supplemental communications within gaming groups before Discord became the standard. And the tech conglomerate is coming off the finalization of its $7.5 billion acquisition of Bethesda, which will include a raft of exclusive games for Microsoft platforms.