Microsoft to buy Discord for US$10b?

Microsoft is set to make a US$10 billion (NZ$14.3b) bid to buying gaming chat app, Discord, according to reports from Bloomberg.

The move comes several months after Microsoft’s failed bid to buy TikTok for US$30 billion (NZ$42.98b) when former President Trump insisted a US company must be responsible for serving the app’s content to American users.

Microsoft is clearly in the market for a social media acquisition…

Is $10b good value?

No. Not right now. Discord currently has a healthy 140m active users. The service is currently ad free, with a US$9.99/month or US$99.99/year premium subscription tier that brought in US$130 million in revenue last year.

Those numbers don’t add up.

But it’s the potential of the Discord ecosystem is what Microsoft is buying/betting on though.

And there’s two things to note here:

1. First, social gaming isn’t going anywhere.

2. Discord successfully pivoted from gaming-only, to an all-inclusive model in March 2020 (beginning of global Covid lockdowns). It’s now more than just an in-game chat app – it’s a established place where communities hang out and chat online.

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