Microsoft looks toward gaming supremacy with Discord buyout

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Discord's approximate valuation.


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Rumor has it Microsoft is sizing up a deal to purchase Discord outright, the popular chat community, for the low, low price of $10 billion. Sources familiar with the matter say Microsoft is one of the front-runners for a buy-out, but other companies are in talks with Discord about possibly acquiring the company too, Bloomberg reports.

Discord has enjoyed enormous success in the last year or so, thanks in no small part to the extended pandemic’s drive to virtual communications. The success of online multiplayer hits like Among Us has boosted Discord’s user base even further. The platform is still mainly used by gamers, though it’s also become a general gathering place for all sorts of activities and groups.

Buying Discord would be massive for Microsoft — and we’re not just talking about that price point. However, even in its current rumors-only form, the buyout is only a possibility. There’s a solid chance this goes nowhere at all.

To sell or go public? — According to today’s report, Microsoft is not the only company vying for Discord’s business. Other big tech companies, most notably Amazon and Epic Games, have also spoken to Discord about a potential purchase. None of those companies, Microsoft included, responded to Bloomberg’s requests for comment.

Then again, there’s also the distinct possibility Discord won’t put itself up for sale at all. The company could keep running solo, as it’s done well enough for the last half-decade. Sources familiar with the matter say there have also been very early talks of turning Discord into a publicly-traded company. That would be an entirely different kind of headache for Discord, though one with lots of room for growth.

Would this be good for Discord? — Buying up Discord would be a smart move on Microsoft’s part. The company’s gaming business has invested heavily in software and services in recent years to smashing results.

Here’s what’s less clear: whether or not Discord would benefit from the deal. Discord is doing just fine on its own, racking up millions of active users and just generally growing at a nice pace. The company made about $130 million in 2020, nearly triple the previous year’s profits.

But Discord is not profitable. A huge number of Discord users access the platform through its free tier. Microsoft’s resources could do wonders for Discord’s profitability. And Microsoft is generally pretty hands-off with the properties it purchases, so current Discord members likely wouldn’t feel much of a difference.

Microsoft has invested heavily in its gaming arm as of late, as illustrated best by its $7.5 billion acquisition of Bethesda Games. Its investments are paying off: the company’s subscription Game Pass service has more than 18 million subscribers now, and the latest Xbox consoles are flying off shelves quicker than Microsoft can stock them.

Now imagine if premium-tier Discord came bundled with Game Pass. That’s a crossover event we could get behind.