Microsoft In Negotiation With Gaming Firm Discord For An Acquisition Of The Later For $10 Billion

A video-game chat community, Discord Inc, could be acquired by Microsoft Corp as the two companies are in talks to get a deal through which is expected to be worth more than $10 billion, said reports quoting sources with knowledge of the matter.

While Discord has been in talks with a number of potential buyers for a deal and Microsoft is the leading suitor, there is no guarantee that the deal would go through, said reports quoting information from sources. One of the sources was quoted in the reports as saying that Discord would prefer to go public by itself than selling itself.

No comments on the reports were available from representatives for Microsoft and Discord.

The first report on the acquisition talks between the two companies was published by VentureBeat on Monday.

The services offered by San Francisco-based Discord allow gamers communicate by video, voice and text and that service is free of cost for the users. And this technology and services has been extensively used for study groups, dance classes, book clubs and other virtual gatherings by people who were stuck at home during the Covid-19 pandemic. The company claims to have more than 100 million monthly active users. The company of late has also been elaborating its communication tools to transform the platform into a “place to talk” and not restrict it to only a platform that is focused on gaming alone.

According to recent report quoting sources familiar with the thinking at Microsoft, this United States based software giant has been acquiring companies and other assets with the aim of gaining access to thriving communities of users and the company has in the last year attempted to acquire the social-media and short video sharing app TikTok and has held talks negotiations for acquiring Pinterest Inc. As a part of its Game Pass offering, the company has also been expanding the suite of subscription perks it provides for its Xbox business.  

“Microsoft possibly acquiring Discord makes a lot of sense as it continues to reshape its gaming business more toward software and services,” said Bloomberg Intelligence Analyst Matthew Kanterman. “There’s a big opportunity to bundle Discord’s premium offering, Nitro, into the Game Pass service to drive more subscriptions from the last reported 18 million.”

Following the recent acquisition of ZeniMax Media Inc., owner of The Elder Scrolls and Doom publisher Bethesda Softworks,in a deal worth $7.5 billion by Microsoft, a successful purchase of Discord would clearly show that the strategy of the Redmond, Washington-based software giant was its aggressiveness of continuing to making investments in its video gaming business unit.

“We expect Xbox to remain acquisitive to keep bolstering the value proposition of Game Pass and drive subscriptions higher,” Kanterman said.

According to Pitchbook, the first move in this latest acquisition talks with Microsoft was initiated by Discord in order to gauge the tech giant’s interest and sources said that the negotiations with on behalf of Microsoft is being carried out by Xbox chief Phil Spencer. Last year, Discord had raised $100 million at a $7 billion valuation, according to Pitchbook.

(Adapted from Bloomberg.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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