This should be the largest acquisition by Microsoft since 2016. The tech company then acquired the business network website LinkedIn, for $ 26.6 billion (now converted to about € 22.6 billion).
Now, Microsoft has been in advanced talks to acquire Discord, which is a lesser known company but could be of great strategic importance to Microsoft.
Discord is a platform that players mainly use to confer and chat with each other via chat, voice, and video. Microsoft has “$ 10 billion or more” left for this company, Wrote The Wall Street Journal Friday. Sources told the newspaper that with any luck, there will be a deal next month.
Microsoft wants to expand into the consumer market
This high amount illustrates how eager Microsoft, which currently relies heavily on business software and products, is to expand into the consumer market. And that the gaming industry cannot be ignored.
Discord’s popularity has spread since the pandemic as people came to sit at home and search for each other online. The company has seen revenue grow from $ 45 million in 2019 to $ 130 million in 2020, although it hasn’t made a profit yet. Discord claims to have over 140 million monthly users.
A wider audience
If the acquisition is successful, Microsoft will likely want to integrate its new addition into Xbox. Hoping to make this gaming brand more attractive compared to the PlayStation from Japan’s rival Sony.
And while the platform was only targeting players shortly after its inception in 2015, it is now attracting a much wider audience, such as study groups, sports clubs and book clubs. Additionally, you can discuss a specific movie or gym in much larger groups.
Discord is free and shows no ads, but those who want to pay $ 10 a month will get all kinds of extensions, including better video quality and higher upload limits.
Microsoft has always wanted to buy a company that in this way can reach the users who congregate in it Societies. The group also tried to acquire the TikTok social network last year and had discussions to buy Pinboard Pinterest online.
With the intended acquisition, Microsoft could also take another strategic step. Discord currently works on rival Google’s cloud servers. After acquisition, Discord will run on Azure servers.
Greater cloud service presence
Microsoft has failed to make its cloud service as successful as Amazon Web Services. The hope is that by running large public platforms like Discord on it, Azure will gain more prominence. When Microsoft previously acquired the manufacturer of the popular game Minecraft, this game was also moved from Amazon Web Services to Azure.
Meanwhile, Microsoft faces a challenge: modifying the platform. Since you can meet in private groups, it attracts groups that sneak together, sow hatred, or formulate other nefarious plans.
For example, Discord was where far-right activists visited each other in 2017 and organized a meeting of white nationalists and neo-Nazis in Charlottesville, Virginia, USA. After that, Discord began moderating more strictly and excluding far-right groups.
A copy of this article also appeared in NRC Handelsblad on March 27, 2021
A copy of this article also appeared on nrc.next on March 27, 2021