Discord, a Chat App for Gamers, Said to Have Discussed Deal With Microsoft

SAN FRANCISCO – Discord, a social media company popular with gamers, could sign a $ 10 billion deal with Microsoft for a transaction, according to people briefed about the situation.

Negotiations were preliminary and no deal is imminent, said one of the people, who declined to be identified because the discussion is confidential. Negotiated as Video gaming boom in epidemic And Microsoft, one of the world’s most valuable tech companies, has expanded its gaming business with deal making.

In recent years a number of Microsoft acquisitions have focused on online communities, such as LinkedIn, GithHub and the GamingCap developer that created Minecraft. Last summer, Microsoft was in talks to buy the video app TikTok, a blockbuster acquisition; The discussion later fell apart. In September, Microsoft ZeniMax Media also purchasedThe parent company of several large gaming studios for $ 7.5 billion.

Discord, which counts more than 100 million monthly active users, has been highly popular in the epidemic, as people have used the service to chat with each other while playing games. The San Francisco-based company, which has raised about $ 600 million in funding since 2014, has negotiated initial deals with various suitors over the years, said another person familiar with the matter.

The privately held company, which investors valued at $ 7 billion in December, is also a candidate to go public. This month, Discord hired its first chief financial officer, a sign that it may be preparing for an initial public offering.

Spokespeople for Microsoft and Discord declined to comment. Venturebeat previously reported He was conducting the Discord deal discussion and Bloomberg Reported Microsoft participation.

New York University professor Jost van Drunen, who studies the video game business, said that if a deal were to happen, Microsoft’s Xbox would be “a natural fit” with the video gaming business. He added that Microsoft is “building hardware, purchasing software, and now stitching it all together with the connective tissue of a community layer.”

Microsoft has said that it makes it easier for people to play games at home on their Xbox consoles, or go on-the-go on their phones. In the last three months of 2020, its gaming business generated $ 5 billion in revenue for the first time, After the release of the new Xbox console.

Discord was founded in 2015 by Jason Citrone and Stan Wisnevsky, programmers and entrepreneurs, as a platform for video game players while gaming and chatting. It attracted mainstream attention as a gathering ground for the far-flung. Abandoned to settle In 2017 white nationalist Charlottesville, rally.

Discord has since enforced strict content moderation rules and completely banned the rightful communities. The application, which allows people to create private servers – in short, small communities – has audio, text and video chat options.

Last year, Discord announced an expansion into everyday usage among online groups of all kinds beyond gaming. It is used for organizing college classes and events such as the Black Lives Matter protests.

People said the company crossed $ 100 million in revenue last year. Disk makes money by selling a subscription to the premium version of the service.

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