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Microsoft in Talks to Buy Discord in $10 Billion Deal

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This deal could be a major game-changer.

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Tech giant Microsoft Corp. is currently in talks to buy Discord Inc., one of the world’s biggest gaming communities made famous by their software capable of integrating VoIP, instant messages, and forum-structured channels, in what could be a $10 billion deal. Bloomberg reveals this is still a preliminary discussion, in which Discord is approaching potential buyers before deciding if they’ll sell the company or go public with their actions.

The acquisition of Discord makes a lot of sense to Microsoft, which has been aggressively expanding its gaming services. The possibility of distributing games both on the Xbox consoles and on PC always gave Microsoft a huge advantage over their main competitors, but with the arrival of Google and Apple in the gaming scene, the company doesn’t want to take any risk. To make sure it stays ahead, Microsoft bought dozens of game studios in the last decade and more recently became the owner of Bethesda, the publisher behind franchises like Doom, The Elder Scrolls and Fallout.

Microsoft used its most recent acquisitions as a way to increase its already huge catalog of games included in its Game Pass, a service with a monthly fee and no additional costs for customers to play all the titles in its library. This is the distribution model the industry should adopt in the upcoming years, especially with the arrival of new competitors in the game streaming market, such as Google and Apple.

Microsoft’s strategy, then, is to keep its market share from going to the new services in gaming, instead of focusing on old competitors such as Sony and Nintendo. That’s why Microsoft also frequently partners with Nintendo to bring previously exclusive titles to the Switch, and seeks out Sony to release PlayStation’s games on the PC, which already happened last year with Horizon Zero Dawn.

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The acquisition of Discord, the main system used by players to communicate with friends and teammates, would give another advantage to Microsoft. Even if it’s free to use, the Discord software has a Nitro paid upgrade that could be easily integrated into the Game Pass, increasing the service’s value. And since Microsoft’s future strategy is to make the Game Pass available on even more platforms, owning Discord would allow the company to offer the best integration available between communication and gaming.

Per Bloomberg, Discord has also spoken with other tech giants, such as Epic Games Inc. and Amazon.com Inc., and has not made any official public statement about its possible sale. Microsoft’s Game Pass is currently available on Xbox One and Xbox Series X/S consoles, on Windows 10, and on Android devices via a streaming service called xCloud. The service reported 18 million subscribers in the last year, and with Microsoft’s strategy of investing in its expansion, these numbers should grow a lot in the next few years, especially with cloud gaming services becoming more usual for players. The gaming market is definitely changing, and it’ll be interesting to see how it develops in the near future.

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