Microsoft Corporation (NASDAQ:MSFT) is said to be in talks with Discord over a possible acquisition. Discord, a gaming social media platform, is valued at around $10 billion.
What would this mean for Microsoft?
Apart from selling the world’s most popular PC operating system, Microsoft is also a gaming company. For more than two decades now, Microsoft has been making Xbox gaming consoles, one of the leading consoles in the market.
Acquiring Discord would give Microsoft an underhand against its longest-running rival in the console industry, Sony Group Corp. The two companies’ rivalry over console market share will likely be won by the company that releases more mass appealing, exclusive games. With control over Discord, Microsoft can survey what type of games are being talked about most by players not only from their Xbox platform but also PlayStation and Nintendo users.
With this information, Microsoft can release more exclusives and pull new users to Xbox. Also from this information, they can get new ideas to improve their consoles by learning what people enjoy about their rivals’ products
Buying Discord would also be a huge win for Microsoft after it failed in its attempts to buy TikTok’s U.S. operations last year.
140 million + users
Discord has been reported to have more than 140 million active users. These are amazing figures for a niche targeted social media platform, considering that Twitter has around 187 million users. Discord makes money from these users by charging subscription fees for a premium image uploading service on the platform. Microsoft can take advantage of this service and continue to charge for it or include more services for more subscription fees.
This will also be a good thing for Discord because only Microsoft can afford to buy it. Sony and Nintendo all have the finances to do it, but they cannot risk buying a social media platform with the current privacy laws environment. The only other company that’s capable of buying Discord is Facebook Inc. (NASDAQ: FB), and it’s very unlikely to be interested in buying yet another multi-billion-dollar social network at this time.