Fast-rising gamer chat platform Discord is in talks with Microsoft about an acquisition valuing the company at about $10 billion, according to multiple reports.
Neither company would comment on the accounts in Venturebeat and Bloomberg.
The deal would fortify Microsoft’s position in the video game sector, which has exploded since the beginning of the coronavirus pandemic in early 2020. The tech giant’s Xbox platform is a top console, and last year the company paid $7.5 billion for ZeniMax Media and its game publisher, Bethesda Softworks.
Discord has other strategic options besides being bought, Bloomberg pointed out, one of which would be to go public in a market that has been favorable for IPOs of late. The company has raised nearly $500 million in startup capital thus far, according to Crunchbase. That total includes $100 million last year at a $7 billion valuation.
Founded in 2015, Discord now claims to have 100 million users. It initially served only gamers but gained additional traction and infamy as a platform used by white supremacists planning a rally in Charlottesville, VA, in 2017. In 2020, after nationwide protests against racial injustice prompted by George Floyd’s killing, the start-up announced a set of initiatives aimed at curbing the use of Discord by hate groups.
In addition to facilitating audio chats among multiple people playing popular games like Call of Duty, Discord facilitates other social discussion. It makes money by selling subscriptions and also getting a piece of some game sales involving its platform.
Investors, who have pushed Microsoft stock to an all-time, split-adjusted high of $246.13 in recent weeks, did not seem to have an immediate reaction to the reports of deal talks. Shares in the company closed at $237.58, up a fraction.
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