Microsoft Eyes $10 Billion Acquisition Of Digital Communications Platform Discord

Voice, video and text communications platform Discord is being eyed by Microsoft for a possible $10 billion-plus acquisition, Bloomberg reported Tuesday (March 23).

Microsoft Xbox users can already link their gaming accounts to Discord, making the tech behemoth prime to take the startup over, GeekWire reported. The Voice over Internet Protocol (VoIP) app was designed for creating communities and was largely seen as gaming-focused chat software. Discord nearly doubled its user base last year and has seen revenues surge to $130 million.

Microsoft posted $131 billion in total cash at the end of 2020 and has been shopping around for acquisitions, according to GeekWire. The company closed a $7.5 billion deal to buy ZeniMax Media earlier in March.

Discord has been in discussions with possible buyers, and while Microsoft is in the running, no deal is on the table, Bloomberg reported, citing unnamed sources. The chat startup could end up filing for a public listing rather than being acquired.

The company experienced a surge in popularity driven in part by the pandemic. The real-time virtual chat tech has been increasingly used to facilitate study groups, book clubs, dance classes and more. Its 100 million-plus monthly active users have taken the tool from gamer-centric into a “place to talk,” according to Bloomberg.

Last year, Microsoft looked into buying TikTok and Pinterest in its quest to snap up platforms with engaged communities, a source told Bloomberg.

“Microsoft possibly acquiring Discord makes a lot of sense as it continues to reshape its gaming business more toward software and services,” said Bloomberg Intelligence Analyst Matthew Kanterman in the Bloomberg report. “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.”

“We expect Xbox to remain acquisitive to keep bolstering the value proposition of Game Pass and drive subscriptions higher,” Kanterman added in the Bloomberg report.

Microsoft’s game-streaming service xCloud launched in September for users everywhere except Apple iPhone. xCloud competes with Google’s Stadia, which streams personal computer games to Android devices or Google’s Chrome operating system.