Microsoft Reportedly in Talks to Buy Discord for $10 Billion

Microsoft is one of several companies discussing an acquisition of chat platform Discord, with a $10 billion offer in the works, per a pair of reports.

Discord has signed an exclusive acquisition discussion with one of the companies, indicating it's in final negotiations for a sale, per VentureBeat. No deal has yet been reached.

A Bloomberg report, meanwhile, says no deal is imminent. One of its sources says Discord is more likely to go public than sell itself to another company.

Microsoft Reportedly in Talks to Buy Discord for $10 Billion

Discord and Microsoft have declined to comment on either report.

Discord raised $140 million in December at a $7 billion valuation. It is still in a growth phase, and has accrued more than 140 million monthly active users. Earlier this month, the Wall Street Journal reported the company had generated $130 million in revenue in 2020, up from $45 million the year before.

Microsoft's interest in Discord recalls its $8.5 billion acquisition of Skype in 2011. The two companies provide similar services, though Discord is much more firmly entrenched among gaming communities. Expanding into other markets has been a focus for the company in recent years.

A Microsoft acquisition of Discord could have far-reaching consequences. Discord itself acknowledges it has yet to become profitable. Most of its users forgo the $10 monthly subscription service Nitro, choosing instead to use the platform in its free form. Attempts by Microsoft to monetize the platform could alienate a significant portion of the user base.

Additionally, game publishers and developers that have cultivated communities on Discord could face new challenges from the platform if they're in direct competition with Microsoft.

On the other hand, Microsoft could bundle Nitro in with its Game Pass offerings or put significantly increased resources behind the Discord communities built around its properties.