According to the report, Microsoft talks about buying the gaming chat app Discord for $10B.
Microsoft is trying to make a new move in the gaming arena. As of now, Many gamer these days like to play online with friends. Discord helps them do that. That is why Microsoft is showing the inter-set to buy a Discord chat at such an amount.
Microsoft is approaching the Discord app
Microsoft is in negotiations to acquire Discord. It is a huge messaging app for gamers, for $10 billion, Bloomberg reported Monday. That followed an earlier report by VentureBeat that the San Francisco-based company had received interest from several buyers.
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Two sources familiar with the matter said that Discord is exploring its options for sale. Besides, they are interested in the wake of interest from multiple parties that want to buy the company. Secondly, One source said the company had signed an exclusive acquisition discussion with one party. It means that it is in final negotiations about a sale.
Launched in 2015, the chat app built initially for gamers has been steadily expanding outside that world as it is increasingly being used by YouTube personalities, podcasters, hackers, and more. Overall, the company says it counts more than 250 million registered users.
Microsoft is all set to buy Discord.
Why Discord is catching all the eyeballs
Over the past few months, seemingly all the pet- and animal-themed Instagram accounts I follow have begun interspersing their videos with pleas. “Join our bird-themed Discord community!” one posted. Another urged me to connect with a group of like-minded reptile lovers on Discord. A commenter touted a dog-lover Discord server. These things are attracting Microsoft.
After signing up for Discord, users join different servers. Each server functions as its own community, and it’s straightforward to toggle between them. Once you’re within a server, you can hop between a long list of hashtag-marked channels on the left-hand side of the screen. Some channels are text-based, and some are group voice chats. Visually, Discord looks very similar to Slack.
Discord is considered a strategic asset, as it connects game companies with their biggest fans in audio and text chat communities.
A spokesperson for Discord said it declined to comment on rumors or speculation. A lot of things could happen that could change the company’s plans. But Discord is in play, according to our sources
While Discord has grown dramatically and has more than 140 million monthly active users in Microsoft’s eyes, it is still in a growth phase, and its financials aren’t spectacular now. That means it may be early for the company to try to go public, the source said. The Wall Street Journal reported earlier this month that in 2020 Discord generated $130 million in revenue, up from nearly $45 million in 2019. In that sense, Discord was similar to many other game companies that saw huge gains during the pandemic when everyone was in lockdown by the Discord community app.
The Bottom Line
The reported talks come as the coronavirus pandemic has increased consumer focus on video games. According to data from research group NPD, spending on video games hit a record $11.2 billion in the third quarter of 2020, an increase of 24% over the previous year.
Microsoft declined to comment, while Discord didn’t respond to a request for comment.
Acquiring Discord would turn the company from an independent firm serving all of gaming and other communities to one that serves a specific parent company, much like what happened with Amazon acquired Twitch or Microsoft acquired the (now-defunct) Mixer. In my opinion, Discord, a community app, is doing well in the gaming industry.