Microsoft is in talks with Discord, a company whose application allows people to chat while playing a video game, and can also be used in business, education, travel, and more.
Microsoft (MSFT) is in talks to acquire a large community messaging and video calling platform, Discord, that could cost the tech giant more than $ 10 billion, Bloomberg reported on Monday, citing anonymous sources.
Microsoft shares, up 71.8% in the past 12 months and 7.55% in the last quarter, were up 2.45% on Monday.
Discord reportedly reached out to potential buyers, including Microsoft, and had previously been in talks with Epic Games and Amazon (AMZN), but no final deal has yet been made.
According to another source, Discord may prefer a listing over a sale, which will also raise funds for growth.
The Discord application was created to communicate with friends while playing online, but today it has gone beyond a tool exclusively for gamers and is used in the field of business, education, tourism, etc.
Discord users today communicate via voice calls, video calls, text messages, media and files in private chats or within communities.
Released in 2015, Discord has grown to 800,000 daily downloads during the pandemic, while its user base peaked at over 140 million monthly active users last year, roughly double the number of active users in month in 2019. The rise of Discord has also coincided with the rise in popularity of multiplayer online games such as Epic Games’ “Fortnite”.
In December last year, the media reported that Discord’s valuation after the last round of funding was about $ 7 billion.
Last year, Microsoft pushed for the TikTok app and was in talks to acquire Pinterest (PINS), but the deal never materialized.
Discord is a valuable asset for Microsoft’s Xbox gaming division, while the software company already owns business communications platforms such as Skype for Business and Teams.
According to media reports, it was the head of the Xbox, Phil Spencer, who negotiated with the Discord company. Microsoft is looking to expand its gaming service with its Game Pass subscription, and the merger with Discord will give a strong competitive edge and can help increase the number of subscriptions.