Microsoft Corp. and Discord Inc. has a lot of influence among video game fans. As they do now In talks for a possible $ 10 billion acquisition, a deal would join two companies looking to reach audiences far beyond gamers.
Jason Citron and Stan Vishnevskiy, programmers and entrepreneurs, founded Discord in San Francisco in 2015 as a platform for people to chat while playing video games together. The free service offers voice, video and text, as well as gamer-friendly features, including the ability for users to broadcast the name of the game they are playing.
The app gained popularity a few years ago alongside great multiplayer hits like Epic Games Inc.’s Fortnite. It also has a more sinister side to its history, as it was used as a gathering place for White nationalists host the deadly rally in Charlottesville, Virginia, in 2017.
Since then, the company has made efforts to clean up its site and make it more inclusive. Last year was a “pivotal year for Discord, new Chief Financial Officer Tomasz Marcinkowski said in a blog post earlier this month. During the pandemic, with people stuck at home playing more video games than ever and also looking for ways to socialize safely, Discord became a hub for communities interested in the Black Lives Matter movement, homework help, book clubs and more. a “place to talk. “
Discord’s service has long drawn all kinds of gamers from celebrities and social media influencers. There was that time three years ago when Fortnite’s biggest player, Ninja, helped with instruction hip-hop legend Drake to set up his Discord account. More recently, there was WallStreetBets. The investor coalition that was notorious for boosting GameStop stock from its spot on Reddit also had a server on Discord and was Banned earlier this year for not doing enough to counter hate speech.
The site now claims more than 140 million monthly users and brought in $ 100 million in revenue last year. Discord doubled its valuation last December to $ 7 billion, according to The Wall Street Journal. According to Crunchbase, it has raised a total of approximately $ 480 million from investors including Greenoaks Capital.
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Everyone can create their own on Discord community or server, which can range in size from fewer than ten people to hundreds of thousands. The average user may belong to one private Discord server that they just use to hang out with their friends and other public servers dedicated to discussing their favorite movie or sports team.
For Microsoft, these diverse communities are arguably Discord’s biggest selling point. The software giant, who tried to buy the social media app TikTok last year and had conversations with it acquisition of Pinterest Inc., is looking for assets that would provide access to thriving user communities, according to people familiar with the company’s thinking. The creator of the Xbox console has recently busted numerous video game companies, including publisher ZeniMax Media Inc. last fall for $ 7.5 billion. Microsoft could try integrating Discord with Xbox Game Pass, the Netflix-esque video game subscription service.
One of the keys to Discord’s popularity is its lack of ads. Rather than filling channels with intrusive ads like other social media services like Twitter Inc., Discord makes money with a subscription service called Nitro. For $ 10 a month, members can customize tags next to their usernames, upload larger files, and stream with higher video quality.
Discord has also become a convenient way for video game companies to directly promote products and nurture communities. The company will verify servers based on popular video games, giving them a stamp of authenticity. Some game developers participate in their Discord channels, which allows fans to interact directly with the people behind their favorite titles.
The official Discord community for the hit game Among us, for example, has more than 413,000 users. Among us, community director Victoria Tran described it as “pretty chaotic, but a lot of fun.” She said people use the server not only to talk about the game and find people to play with, but to have broader conversations about their lives and interests.
The server “is a nice way to connect directly to our players, even if it’s not necessarily related to the game itself,” said Tran. She added that the video game servers can also be a place for players to report bugs and make suggestions directly to game creators. “Discord communities are just a great way to get feedback that you might not have been able to get otherwise,” she said.
Discord can also be useful for smaller games that may not have the reach of Among Us, but still want to provide a place for fans to chat, game developers say.
“We really just wanted to build a quiet community that was nice to hang out in,” said Megan Fox, founder of the independent game development studio Glass Bottom Games. The first game, Skatebird, is about birds on skateboards. It has a Discord community of about 900 users that Fox said usually use the server to talk about “birds or skateboarding.” She said the studio also has a channel solely for users to “ share your kickflip attempt. ” Many Discord servers lean on humor and inside jokes, which is part of the appeal.
The news of a possible deal has sparked mixed reactions in the gaming community. “If Discord is going to sell, Microsoft may be one of the safest places it can go without undergoing major changes,” said Rod Breslau, an esports and gaming consultant who works with companies such as Sony Music Entertainment. Microsoft has taken a hands-off approach with recent acquisitions, such as LinkedIn and GitHub, he said.
But not all gamers were thrilled with the prospect. Twitter was full on Tuesday with people begging Discord not to sell. Some Discord channels have also been filled with negative reactions to the idea of further consolidation of the video game industry.
“Gamers are especially whiplashed by a variety of previous Microsoft grievances,” Breslau said, “and who really wants one of the great overlords of business to continue to gobble up parts of the industry?”
It may not come to that. Discord is more likely to go public than sell itself, said one person familiar with the discussions.
– With the help of Dina Bass and Katie Roof