What Is Discord and Why Does Microsoft Greed It: QuickTake

Photographer: Tiffany Hagler-Geard / Bloomberg

Every month or two, a social media platform grabs attention, intriguing some and baffling others. In 2020, former President Donald Trump’s campaign to banish TikTok drew a lot of attention to the video app. Earlier this year, Clubhouse rose to prominence as people struggled for invitations to join chat rooms for Silicon Valley’s elite. The platform called Discord is not new, but it speaks of a $ 10 billion sale to Microsoft has made the world wonder about this video game-centric chat app.

1. What is Discord?

Jason Citron and Stan Vishnevskiy, programmers and entrepreneurs, founded San Francisco-based Discord 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 player-friendly features, including the ability for users to broadcast the name of the game they are playing. During the pandemic, with people trapped at home and playing more video games than ever, and also looking for ways to safely socialize, Discord became a hub for communities as diverse as the Black Lives Matter movement, homework help, clubs. reading and more. . It began to present itself as a “place to talk.”

2. How big is it?

The site now has more than 140 million monthly users and says it generated $ 100 million in revenue last year. Discord doubled its valuation last December to $ 7 billion, according to The Wall Street Journal. It has raised a total of about $ 480 million. according to Crunchbase, from investors including Greenoaks Capital.

3. What is its appeal?

The app gained popularity alongside smashing multiplayer hits like Fortnite from Epic Games Inc. Players like to be able to chat with each other while taking out the enemy. But Discord has drawn fans beyond gamers and is now positioning itself as attractive to anyone who wants to be able to tap into a hive of like-minded interests. On Discord, anyone can create their own community or server; Today’s servers have memberships ranging from one to hundreds of thousands. A typical user may belong to a private Discord server, to hang out with friends, as well as public servers dedicated to discussing a favorite movie or sports team.

4. Why is Microsoft interested?

For Microsoft, these diverse communities may be Discord’s biggest selling point. The software giant, which last year sought to buy the social media app TikTok and held talks to acquire Pinterest Inc., has been searching for assets that provide access to thriving user communities, according to people familiar with the company’s thinking. The maker of the Xbox console has taken over a number of video game companies recently, including the publisher. ZeniMax Media Inc. in September for $ 7.5 billion. Microsoft may look to integrate Discord with Xbox Game Pass, its Netflix-like subscription service for video games. But a person familiar with the talks said Discord is more likely to go public than it is to sell.

5. How does Discord make money?

One of the keys to Discord’s popularity is its lack of publicity. Instead of populating 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 labels alongside their usernames, upload larger files, and stream with higher video quality.

6. What kinds of problems have you had?

Discord was used as a gathering place for white nationalists to organize the 2017 rally in Charlottesville, Virginia, which turned violent and led to the death of a counter-protester. Since then, the company has worked hard to clean up its site and make it more inclusive. The investor coalition known for driving GameStop’s shares from its vantage point on Reddit also had a server on Discord, but it was banned earlier this year for not doing enough to stop hate speech.

7. Is it basically a site for players?

It’s still very popular with gamers, but people use it for all kinds of conversations, even on official video game channels. Discord has become a useful way for video game companies to directly promote products and foster 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, allowing 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 “quite chaotic, but a lot of fun.” He said that people use the server not just to talk about the game and find people to play with, but to have broader conversations about their lives and interests.

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