Following reports that Discord Inc. has been scouting multiple potential buyers, it looks like one company could now be at the front of the line. According to inside sources, Microsoft Corp. is in talks to purchase the video game chat app in what could be the biggest deal the software giant has ever made in history.
While nothing is official, representatives close to the matter (who have chosen to remain unidentified since current discussions are still private) told Bloomberg that the deal could be worth over US$10 billion. At the same time, another rumor speculates that Discord intends to go public instead of sell itself, so it may be too early to tell what the definite word is. When asked about the situation, Microsoft and Discord both declined to comment.
Microsoft is known for pursuing big deals whenever it is convinced that an acquisition will help its business. In the past, it has purchased popular apps such as Skype and Linked-In, both of which ended up lending Microsoft real and long-lasting gains. It also looked to buy TikTok and Pinterest Inc. last year, hoping to tap into their robust user communities.
In the pandemic era, communication- or network-based services have grown exponentially as people continue to seek ways to connect with one another remotely. Such is the appeal of Discord, which has provided gamers a free service for chatting via video, voice, and text during a time when gaming is at an all-time high.
Interestingly enough, non-gamers have also taken to Discord for alternative purposes—the app is also used to conduct regular study groups, virtual classes, book clubs, and more. As a result, the company has been looking at ways it can evolve beyond being just a gaming-oriented service. Currently, Discord sees over 100 million active users per month, making it a worthwhile investment for a company like Microsoft that aims to stay relevant and competitive.
That said, Microsoft's interest in Discord is likely more of a sign that it is still willing to keep investing in its video game unit. With the company's recent purchase of ZeniMax Media Inc. and Bethesda Softworks, as well as its still-thriving Xbox business, a Discord acquisition would ensure that Microsoft remains a force to be reckoned with in the video game industry.
Matthew Kanterman, an intelligence analyst for Bloomberg, believes the acquisition would make sense as Microsoft continues to reshape its gaming business more toward software and services. "There’s a big opportunity to bundle Discord’s premium offering, Nitro, into the Game Pass service to drive more subscriptions from the last reported 18 million," he adds.
For now, we will just have to wait and see whether the deal actually comes to fruition. According to other reports, Discord has also been engaged in sales talks with Fortnite's Epic Games and Amazon.com Inc, so it's hard to tell if Microsoft is the frontrunner. Needless to say, Discord has a very big decision to make in these next few weeks.
