Discord Will Not be Acquired by Microsoft
Discord has broken off talks with Microsoft over a possible takeover by the Redmond giant for up to $12 billion. What's next for gamers' favorite instant messenger?
According to Reuters, talks between Discord and Microsoft have failed. The companies did not reach an agreement, and Discord's owners decided to continue the development of the messenger as an independent company, which may go public in the future. Although, according to The Wall Street Journal, the parties are open to resuming talks. Neither company has officially commented on the reports.
According to Bloomberg, the possible deal could have been as high as $12 billion. The amount may seem huge at first, but Discord has 140 million users, and during the pandemic it gradually transformed from a place strictly for gamers to a universal platform bringing together groups with various backgrounds - fans of games, music, movies, as well as creators or those investing in cryptocurrencies.
In 2020, Discord's revenue reached $130 million. (although it is still not a profitable business - the company recorded a loss). The main source of money is Nitro, the premium version of the service, which offers, among others, better quality of calls and video transmissions, larger maximum size of uploaded files or access to emoticons from all servers on which the user is present. In December, the company was valued at $7 billion and raised an additional $100 million from investors for further development.
Microsoft was not the only company in talks about acquisition. Bloomberg learned that there were also talks with Twitter, Epic Games and Amazon, and some investors estimate Discord's current value at as much as $15-18 billion. Amazon in particular seemed like an interesting candidate, due to the strong ties between its Twitch service and Discord, where many streamers are very active on its servers.
So far Discordhas very unobtrusive methods of monetization and maintains an image of being independent and user-friendly. A possible takeover by any giant could lead to stronger pressure on revenues, although much would depend on the buyer's vision for the platform's development. So what will be the future of Discord? Time will tell.
The failure of the talks may mean that soon we will hear about another object of Microsoft's desire. The Redmond giant has been on a roll in recent months - it tried to buy TikTok, acquired Nuance Communications (speech recognition technology) for 19.6 billion dollars and ZeniMax Media (Bethesda Softworks) for 7.5 billion dollars, and does not intend to stop.
