Why Was Discord Being Acquired by Microsoft?

Discord, a popular worldwide communication platform among gamers, recently announced that Microsoft had acquired it. The agreement marked the end of an impressive journey for the company, which started in 2015 as a free app where gamers could text and video chat with each other, and quickly evolved into a platform valued at more than $10 billion.

So why was Discord being acquired by Microsoft? The answer lies in the success of Discord’s distinctive approach and ability to bridge different audiences across gaming, entertainment, and lifestyle communities. Discord offered an intuitive user interface that allowed gamers to communicate directly with each other in near real-time through voice and text chat. It also attracted users from outside the gaming industry due to its friendly and welcoming design. In addition, Discord supported streamers directly through its comprehensive suite of software tools for broadcasters.

With these features combined under one roof, it was easy to see why Microsoft wanted to acquire such an innovative platform as part of its portfolio of services and products.

Discord Reportedly Ends Talks for $10B Acquisition by Microsoft

Discord is a popular platform for gamers to communicate through text, voice, and video. It has quickly become one of the most popular online social networks, surpassing 150 million users in only four years. Recently, news broke that Discord was reportedly in talks for a $10 billion acquisition by Microsoft. Let’s review these reports’ background and examine why these two companies may have been exploring this type of partnership.

Overview of Discord

Discord is a digital distribution platform and freeware VoIP application designed for video gaming communities, that specialises in text, image, video and audio communication between users in a chat channel. Discord runs on Windows, macOS Android, iOS and Linux systems.

Founded by Jason Citron in 2015, Discord quickly became one of the largest communication platforms for gamers, with over 250 million registered users as of May 2020. The platform offers features such as automated moderation of chats, user profiles and data management within servers, on-screen voice activity tracking and support for multiple languages.

Discord recently announced that Microsoft is acquiring it for $10 billion. The acquisition is likely to have benefits and drawbacks from the perspective of Discord users – some claim that the move could mean better tools for server administration/management and increases in security due to Microsoft’s vast resources. On the other hand, some worry about possible integration with other applications owned by Microsoft or changes to prices or features on the platform.

Discord’s Growth and Popularity

Discord, a leading online gaming and communication platform, has grown exponentially since its launch in 2015. In only five years, Discord had earned the loyalty of nearly 140 million active monthly users who’d come to rely on the voice and text-chat services to play games and communicate with other gamers.

Discord allowed users to create their public or private servers around different games, while giving them access to many features like live-streaming, animated emojis, 3D video chat and file sharing. The platform also enabled its users to build their own “communities” as they connected with players from all areas of gaming experiences—from console to PC and casual social gamers.

Its monthly user base was larger than anticipated and diverse—the platform appealed equally well to teens (ages 13-17) as it did adults (18+). As a result, Discord gained widespread adoption from some of the biggest brands in gaming, including:

• Epic Games (Fortnite)
• Blizzard Entertainment (World of Warcraft)
• Activision Blizzard (Call Of Duty)
• Electronic Arts (FIFA)
• Take Two Interactive (Grand Theft Auto)
• Riot Games (League of Legends)

What had previously been dismissed as “just for kids” became an indispensable tool for anyone interested in gaming communities or digital communications.

This attracted worldwide attention and Discord was quickly sought after by some of the world’s most influential technology companies looking to acquire a platform that united the world through gaming experiences. Consequently, after months of negotiations Microsoft ultimately purchased Discord for an estimated USD 10 billion in 2021.

Microsoft’s Interest in Acquiring Discord

Recently, there have been reports of Discord ending talks for a possible $10B acquisition by Microsoft. This news has sparked a lot of curiosity from the tech community. Why was Microsoft so interested in acquiring Discord? Let’s explore the potential reasons for Microsoft’s interest in this acquisition.

Microsoft’s Motivation for the Acquisition

Microsoft’s acquisition of the popular messaging platform Discord has been seen as a bid to deliver a larger, more vibrant and immersive video gaming experience. Addressing its motivation for the purchase in an official statement, Microsoft stated that “by bringing together one of the world’s largest communities of gamers with Xbox’s digital assets and services, and Microsoft’s cloud assets and AI technologies, we can enable digital transformation in video gaming.”

Microsoft views this acquisition as an opportunity to integrate its gaming franchises such as Xbox Live, Game Pass and other services into Discord. By unifying these different games and platforms, users can benefit from more efficient access to content on both services with fewer virtual walls standing in their way. Furthermore, by combining their immersive AI capabilities with Discord’s audio expertise, Microsoft could unlock new opportunities to let game developers push immersion further with more intuitive interaction patterns for gamers engaging across communities.

Moreover, this acquisition could also provide Microsoft with a much more efficient moderation engine for its platforms. In February 2021 CEO Satya Nadella noted that “through deploying state-of-the-art machine learning powered moderation technology developed at Discord over Microsoft’s many platforms including Xbox Live we will detect issues such as hate speech, harassment and illegal activities much quicker than before.”

Potential Benefits of Acquiring Discord

With the potential acquisition of Discord, Microsoft could see several benefits.

• For one, it could open up new opportunities for Microsoft in the gaming world. Discord is a platform that has established itself as a major player in the gaming community. This presents an opportunity to leverage the existing user base and create partnerships with game developers.
• Microsoft already has a strong presence in gaming through their Xbox platform and console sales as well as in PC gaming through Windows 10. Acquiring Discord would bring them an experienced team with years of expertise designing user-friendly tools to enhance people’s gaming experience. This knowledge would be invaluable for Microsoft in growing their already established gaming platforms.
• In addition, adding Discord to the Microsoft family would give them access to new channels for collaboration and communication between gamers and game developers that have not yet been explored by their competitors or by Microsoft. Plus, it could open avenues for exploring potential collaborations with popular streaming services like Twitch or YouTube Gaming.
• Ultimately, Microsoft would gain additional insight into what gamers are looking for from a social platform tailored specifically towards gamers, which could potentially benefit all areas of their business connected to the gaming industry – including not just Xbox but also PC Gaming on Windows 10 machines and beyond.

Reasons Behind the Discussions Ending

Discord, a popular chat and communication platform, recently ended their reported $10 billion acquisition by Microsoft. This news shocked many users and investors alike, as the deal seemed so close to completion.

There are a few reasons as to why the discussions ended, and we are going to discuss them in further detail:

Discord’s Valuation

Discord is a popular communication platform used by gamers, content creators, and many other online communities. In March 2021, it was announced that Microsoft would acquire Discord for $7.5 billion. The acquisition surprised many due to the high value placed on the tech startup.

According to reports from Bloomberg, Discord’s valuation had already crossed $3 billion in late 2020 due to the exponential rise in its user base and revenue progressions over the past two years. As of February 2021, it is estimated that there were around 140 million monthly active users on Discord. This growth was primarily attributed to its ability to host remote gaming competitions during the pandemic lockdowns which began in early 2020.

Furthermore, Discord also offers paid subscriptions for its premium users called Nitro and Nitro Classic at prices starting at $10/month and $5/month respectively with added benefits like custom emojis and improved audio quality while gaming etc., leading to an increase in revenue growth. Thus, these factors have contributed significantly towards Discord achieving a high market valuation before its acquisition by Microsoft providing insights into why the discussions eventually reached an end with Microsoft acquiring it for $7.5 billion.

Discord’s Resistance to Selling

Since its early appearances in March 2015, Discord has been uniquely independent: one of the rare tech startups rising to success without taking venture capital or selling to a tech giant. Many startups survive on outside funding for years before getting acquired by the likes of Microsoft and Facebook, but not Discord. At first, it had only a single round of private investments from Greylock Partners – a fund notable for their investments in industry titans like Airbnb, LinkedIn, and Twitch – but they earned enough to remain completely independent in 2018. Other than that, they survived solely off sales of their premium Nitro subscription program.

Discord’s resistance to selling is even more notable since it’s considered one of the most sought-after startups in the world right now. It had been rumoured that Amazon was after them as well as Tencent (the Chinese parent company of Riot Games). Even Microsoft’s close partner Epic Games had reportedly been courting them – talks which likely died at the same time as their partnership with Microsoft began. There is no doubt competition for this highly-coveted startup was fierce, and any of these tech giants could have acquired Discord had it wanted to sell at all.

Conclusion

The acquisition of Discord by Microsoft is likely to positively impact both companies and the millions of users who use the chat service. Microsoft’s investment of $10 billion in purchasing Discord strengthens their business portfolio and enables them to gain access to a large customer base and engaging audience.

With this acquisition, Microsoft has gained an important foothold in the world’s largest online social network community, allowing it to compete more effectively against its competitors in the video gaming industry.

Microsoft is confident that Discord’s technology will enable it to develop its products more quickly and easily, which can further drive its video game business forward. Additionally, this venture could pave the way for creating stronger relationships with developers and acquiring new services which could further help Microsoft expand its customer base in the growing gaming market. Furthermore, this move provides Microsoft with an important platform for communications between their customers and partners, allowing them greater opportunities for feedback collection and improved customer insights.

Overall, this acquisition provides both companies unlimited potential as they continue innovating and developing new technologies together. In addition, this ‘marriage’ will surely propel both companies into new heights through increased customer loyalty and user engagement while continuing to provide excellent support for millions of gamers around the world.

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