Why Microsoft wants Discord

Microsoft is reportedly having discussions with Discord to buy the communications app. The Wall Street Journal reports that Microsoft is in “exclusive talks” to acquire Discord, and a deal could close next month. It’s the latest acquisition target for Microsoft, after the company failed to acquire TikTok and Pinterest recently. While all three are very different services, they share one common element: community.
Microsoft is willing to spend big on these services because, outside of Xbox, it doesn’t have a huge consumer-facing community like rivals Google, Amazon, Facebook, and Apple do. Microsoft has watched Google acquire YouTube and turn it into the world’s biggest video platform, Amazon buy Twitch and dominate streaming, Facebook acquire both Instagram and WhatsApp to control the way millions communicate and socialize online, and Apple rule mobile with its App Store.
Discord gives Microsoft access to a growing list of more than 140 million monthly active users that includes thousands of top YouTubers, creators, and gamers. Microsoft wants its own community.
A creator community
“Creation, creation, creation — the next 10 years is going to be as much about creation as it is about consumption and about the community around it, so it’s not creating alone,” said Microsoft CEO Satya Nadella in an interview with Bloomberg last month. “If the last 10 years has been about consumption — we’re shopping more, we’re browsing more, we’re binge watching more — there is creation behind every one of those.”
Nadella was quick to focus on creators and communities in the first year of being CEO at Microsoft. One of his first big acquisitions was Mojang, the studio behind Minecraft with its millions of devoted fans. Nadella has also spent big to acquire other communities, with LinkedIn costing $26.2 billion and GitHub for $7.5 billion. GitHub was a key target to buy developer love and a huge community, and LinkedIn connected Microsoft more deeply to businesses and provided access to a significant professional social graph.
Microsoft has clearly been on the hunt for the same type of creator-led community on the consumer side, but TikTok and Pinterest didn’t work out. The software maker has also failed elsewhere. Microsoft acquired Beam a couple of years after Nadella was named CEO, and eventually rebranded it into its Mixer streaming service. Microsoft tried to compete with Twitch but ultimately failed because it didn’t have the broad consumer reach. Instead, it shut down Mixer last year and helped transition streamers over to Facebook Gaming.
Discord offers Microsoft a big and engaged community. Primarily used by gamers, it has become a Gen Z hub for socializing with friends, particularly during the pandemic. It consists predominantly of private communities, and Discord has 6.7 million active servers every single day. It’s a huge community, 75 percent of which are Discord users outside of North America.
It’s also become an essential tool for many over the past year. I’ve personally used Discord daily to keep in touch with friends, or participated in remote movie nights, streamed games, and just used the app as a place to hangout. Millions use Fortnite to hangout and play together, and Discord is the primary way these communities of friends talk and chat while they’re gaming.
Discord is a great mix of Slack messaging and Zoom video, combined together with a unique ability to just drop into audio calls freely. You don’t have to organize a time to call friends, or send them links, you just all jump in and out of voice channels that are always ready and open.
Azure and Xbox
The community and creator aspects for Microsoft’s potential Discord acquisition are clear, but the company is also driven by its desire to have big public services running on Azure. It’s an area where Microsoft has fallen behind rival Amazon Web Services (AWS), and it’s particularly relevant when you consider Discord is powered by Google Cloud. Microsoft and Google are at e...

Microsoft is reportedly having discussions with Discord to buy the communications app. The Wall Street Journal reports that Microsoft is in “exclusive talks” to acquire Discord, and a deal could close next month. It’s the latest acquisition target for Microsoft, after the company failed to acquire TikTok and Pinterest recently. While all three are very different services, they share one common element: community.
Microsoft is willing to spend big on these services because, outside of Xbox, it doesn’t have a huge consumer-facing community like rivals Google, Amazon, Facebook, and Apple do. Microsoft has watched Google acquire YouTube and turn it into the world’s biggest video platform, Amazon buy Twitch and dominate streaming, Facebook acquire both Instagram and WhatsApp to control the way millions communicate and socialize online, and Apple rule mobile with its App Store.
Discord gives Microsoft access to a growing list of more than 140 million monthly active users that includes thousands of top YouTubers, creators, and gamers. Microsoft wants its own community.
A creator community
“Creation, creation, creation — the next 10 years is going to be as much about creation as it is about consumption and about the community around it, so it’s not creating alone,” said Microsoft CEO Satya Nadella in an interview with Bloomberg last month. “If the last 10 years has been about consumption — we’re shopping more, we’re browsing more, we’re binge watching more — there is creation behind every one of those.”
Nadella was quick to focus on creators and communities in the first year of being CEO at Microsoft. One of his first big acquisitions was Mojang, the studio behind Minecraft with its millions of devoted fans. Nadella has also spent big to acquire other communities, with LinkedIn costing $26.2 billion and GitHub for $7.5 billion. GitHub was a key target to buy developer love and a huge community, and LinkedIn connected Microsoft more deeply to businesses and provided access to a significant professional social graph.
Microsoft has clearly been on the hunt for the same type of creator-led community on the consumer side, but TikTok and Pinterest didn’t work out. The software maker has also failed elsewhere. Microsoft acquired Beam a couple of years after Nadella was named CEO, and eventually rebranded it into its Mixer streaming service. Microsoft tried to compete with Twitch but ultimately failed because it didn’t have the broad consumer reach. Instead, it shut down Mixer last year and helped transition streamers over to Facebook Gaming.
Discord offers Microsoft a big and engaged community. Primarily used by gamers, it has become a Gen Z hub for socializing with friends, particularly during the pandemic. It consists predominantly of private communities, and Discord has 6.7 million active servers every single day. It’s a huge community, 75 percent of which are Discord users outside of North America.
It’s also become an essential tool for many over the past year. I’ve personally used Discord daily to keep in touch with friends, or participated in remote movie nights, streamed games, and just used the app as a place to hangout. Millions use Fortnite to hangout and play together, and Discord is the primary way these communities of friends talk and chat while they’re gaming.
Discord is a great mix of Slack messaging and Zoom video, combined together with a unique ability to just drop into audio calls freely. You don’t have to organize a time to call friends, or send them links, you just all jump in and out of voice channels that are always ready and open.
Azure and Xbox
The community and creator aspects for Microsoft’s potential Discord acquisition are clear, but the company is also driven by its desire to have big public services running on Azure. It’s an area where Microsoft has fallen behind rival Amazon Web Services (AWS), and it’s particularly relevant when you consider Discord is powered by Google Cloud. Microsoft and Google are at e...