Social chat platform Discord is looking to sell, and reports say Microsoft is looking to buy the service for a substantial sum.
Discord is following up on several acquisition offers and is currently in talks to sell the company to Microsoft, sources tell Bloomberg. Based on Discord’s previous $7 billion valuation in December, the buyout could cost as much as $10 billion.
The acquisition makes sense for Microsoft, who has positioned its Xbox brand front and center to its core business. The Redmond-based titan recently purchased ZeniMax Media for $7.5 billion in the second-largest gaming buyout in history. Xbox has a billion-dollar ecosystem of gaming, services, and content, and Discord could be a neat way to wrap PC and console gaming together. Microsoft merged Xbox LIVE connectivity into Discord in 2018 Discord currently has 140 million active users and is one of the most powerful networks for engagement and social connectivity in the games industry.
Despite its reach and valuation, The Wall Street Journal reports that Discord pulled in $130 million in revenues throughout the entirety of 2020, which is less than some companies make in a single quarter. Microsoft, however, knows how to properly monetize its services and would likely use Discord to connect its multi-faceted gaming business rather than for direct revenues.