Microsoft Potential $10B Discord Acquisition

Released in May 2015 through Hammer & Chisel, Inc. (now Discord Inc.), Discord became the widest used gaming communications platform in recent years. Due to the limited scope of the likes of Steam, Epic Games, and GOG Galaxy, Discord provided effective VoIP communications and social media community features.

Discord communities (organized and separated as servers) were generally utilized for consistent communication among users with similar interests. Users could create these servers freely, providing management and organization tools such as public and private visibilities, channel categories, and notifications. Recording messages, video chats, gifs, and other widgets became available, giving users a lot of options. Discord also featured easy access and integration to other social media platforms popularly used, such as Facebook, Twitter, Instagram, YouTube. Twitch, Reddit, and Spotify.

Although Discord (originally Discordapp) was originally intended for the gaming sector, the company and platform has expanded into the mainstream. Due to the integration with other social media, Discord has become popular with influencers. The Discord Nitro premium option offers additional content for a price. Moreso, due to the COVID-19 global pandemic, Discord saw a massive increase in users in the year 2020.

Moving past its roots as a gamer and eSport chat platform, Discord has reached a consistent monthly active user base in the 100 to 140+ million range. Wall Street Journal Breaks the Silence In a tweet on March 26th, the Wall Street Journal presented the strongest confirmation that talks between Microsoft and Discord are well underway:

Although no official word from either Microsoft or Discord has acknowledged these talks, insiders have apparently trickled information to industry journalists. It should be noted that Microsoft is not the only company that has expressed interest in acquiring Discord. Amazon and Epic Games have also been rumored to have made bids in the past.

However, the buzz regarding Microsoft acquiring Discord has been the most active in recent months. Although the deal is yet to be made public and finalized, with a $10 Billion offer, it doesn't seem unlikely that Microsoft will be adding Discord under its wing soon. What Would a Microsoft Acquisition of Discord Mean? Microsoft is no stranger to acquiring a popular VoIP platform. In 2011, the company acquired Skype. At the time, Skype was the most familiar and popular free VoIP option. Although already past its glory days, Skype is still widely used, particularly by customers who have been using the service for many years.

With that said, Skype does not offer the versatility and wide array of features that Discord has developed and incorporated. Due to its gaming roots, Discord offers more customization and tools for community management. Invite only servers and channels ensured privacy and provided a means of keeping things in order. The integrations with other social media are also a huge draw for mass market users. But that gaming connection is also what may be a huge part in Microsoft's strategy.

By acquiring Discord, Microsoft could directly incorporate its features with its existing Xbox client base. It is very likely that there will be integrations and additional services offered for those subscribed to the Xbox Game Pass service (recently updated as the Xbox Network). While Microsoft may continue to support the communities set up for their rivals Nintendo and Sony, it would not be surprising that promotions and services will be included to attract gaming consumers to their Xbox hardware. Enhanced chat features available only to customers using the Xbox and PC platforms would also be possible.

Another area which would have significant attention after a Microsoft acquisition of Discord is mobile community building and gaming. As Microsoft continues to expand its reach and coverage, Discord opens up possibilities for reaching markets already in place thanks to Discord's availability in the Google Play and Apple iOS stores.