Microsoft is in advanced discussions to acquire Discord, a video-game chat community, for more than $10 billion, according to people familiar with the matter. If all goes well, both companies could reach a deal next month. Following the news about the discussions, Microsoft’s shares were up 1.2% on Tuesday morning.
San Francisco-based Discord is known for providing a free service that allows gamers to communicate by video, voice, and text. However, people have used the platform for more than just gaming. Consumers have used the platform for study groups, dance classes, book clubs, and other virtual gatherings during the pandemic. The company has been expanding its communication tools to turn it into a “place to talk” rather than a gamer-centric platform.
Microsoft has been on the hunt for an acquisition that would help its gaming business reach more consumers. It wants to reshape its gaming business more toward “software and services”, according to the Bloomberg Intelligence Analyst, Mathew Kanterman. After the company’s recent $7 billion purchase of ZeniMax Media Inc, an acquisition of Discord would signal the Washington-based software giant’s willingness to keep investing in its gaming unit.
If the deal between Microsoft and Discord is reached, it would be the former company’s largest purchase since it acquired LinkedIn Corp. for $26.6 billion. According to the people familiar with this matter, Discord would more likely go public than sell itself but the representatives from both companies declined to comment.
References:
1) Bass, D., & Roof, K. (2021, March 22). Microsoft in Talks to Buy Discord for More Than $10 Billion. Retrieved March 25, 2021, from https://www.bloomberg.com/news/articles/2021-03-23/microsoft-said-to-be-in-talks-to-buy-discord-for-more-than-10b
2) Lombardo, C., & Farrell, M. (2021, March 25). Microsoft is in Exclusive talks to Acquire Discord. Retrieved March 26, 2021, from https://www.wsj.com/articles/microsoft-is-in-exclusive-talks-to-acquire-discord-11616715164
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