Microsoft is in talks to buy the social networking site Discord for more than $10 billion, Bloomberg reported, citing sources familiar with the negotiations. The sources asked not to disclose their names since the talks are private. Representatives from both companies declined to comment on the news.
Experts suggested that the purchase of Discord could be another step for Microsoft to expand its gaming business.
Discord is reportedly in talks with other potential buyers, but no agreements have been made yet. Epic Games and Amazon are the companies that have also held discussions with Discord earlier. At the same time, one of the agency's sources says that Discord would rather go public than become a part of another company.
Analysts point out that buying Discord makes a lot of sense for Microsoft since it can modernize the business towards providing services this way. For example, the company can combine Discord Nitro and Xbox Game Pass subscriptions into a single service to help increase the number of subscribers. Microsoft sees Discord as a strategic asset since it connects gaming companies with their biggest fans in the text and audio chat communities.
The social networking platform Discord, created in 2015, was initially designed to be a service for gamers. It allows users to communicate via video and voice, as well as exchange text messages.
During the coronavirus pandemic in 2020, many people began using Discord as an alternative to Zoom and other similar services to communicate on various topics. Therefore, the service is now being used for study groups, dance classes, book clubs, and virtual meetings. The founders themselves stated that the service had already moved away from its original theme and became a place for daily communication. According to Discord, the platform has over 100 million monthly active users.
In July 2020, Discord received an investment of $100 million and then increased its value to $7 billion. However, the company is not profitable yet.
In early March, Microsoft acquired Bethesda Softworks, one of the most renowned and largest game publishers in the world. In addition, Microsoft's gaming department, Xbox, is expanding the subscription benefits it provides as part of its Game Pass offering.