Reports say Discord is selling: Here's why Microsoft can't let this one slip away

By Jez Corden
last updated

A new report says Discord is looking to sell for more than $10 billion dollars. Is Microsoft in the bidding?

Discord platforms
Discord platforms (Image credit: Discord)

Microsoft has a long and storied history with messaging apps. Whether it's nostalgic memories of MSN Messenger, or more recent efforts with Microsoft Teams, communication is practically foundational to every Microsoft vertical. Microsoft has also had a long and storied history of, well, failure in this area. Despite buying up Skype, the relevancy of Skype as a platform has deteriorated in recent years in favor of speedier competitors, like WhatsApp and Telegram, or more-connected social networks like Facebook Messenger.

Skype has still found its footing as a back-end service for products like Microsoft Teams and Xbox Live, both of which boast tens of millions of monthly active users. Still, there are big, gaping holes in Microsoft's ability to engage consumers within its own communication platforms, especially when it comes to building communities, or even running small businesses.

A new report from VentureBeat suggests that gaming-oriented messaging platform Discord is looking to sell for upwards of $10 billion. One has to assume that Microsoft is in the running to be among those to acquire the messaging platform, given that it aligns almost perfectly with its plans for the future of gaming. It could also boost Microsoft's business aspirations, given that it is arguably more intuitive for smaller businesses than Microsoft Teams who don't need the scale or enterprise-grade integrations the service offers.

Here's why I think Microsoft should certainly look to place itself in the bidding war for Discord, if it's not already at the fore.

Microsoft's messaging services are bad

Skype Photograph

Source: Windows Central (Image credit: Source: Windows Central)

I hate to say it, but Skype, Microsoft Teams, and Xbox Live messaging are all pretty awful at doing their job in general. Skype remains among the more reliable services for voice and video comms, and Xbox Live party chats generally do the job for group voice in gaming, but they've all fallen so far behind competing services due to lack of innovation.

To be fair to Microsoft Teams, it does things at scale for enterprises that competing solutions simply cannot offer. But as a user in a mid-sized business who simply needs these services for fundamental communication and filesharing, Microsoft's competitors generally seem to have an edge for the basics.

Microsoft is a lumbering corporate giant, and often fails to meet the pace of innovation of smaller, more nimble teams.

Microsoft is a lumbering corporate giant, and often fails to meet the pace of innovation smaller, more nimble teams can accomplish. Few others represent this as succinctly as Discord, which not only destroys Skype and Xbox Live at texting, mobile quality, and usability, but arguably is even better than Microsoft Teams as an environment for professional use. Discord has a wealth of mature services, tools, and bots that can turn basic Discord servers into productivity powerhouses with only a few simple tweaks.

I remember long before even working in the industry, I was scratching my head over Microsoft's decision to shutter MSN Messenger in favor of Skype. MSN was faster than Skype and had a more intuitive interface. Frankly, it still does.

I'm not quite sure why, but it's absurd to me that, in 2021, Skype and Xbox Live messaging services lag behind the competition in speed. It just doesn't feel good to send texts over Skype-based services, watching the app struggle to open even on the world's most powerful PCs and phones, while Telegram and WhatsApp, and crucially, Discord, all open at a mere instant. If after years of failed attempts to rebrand and rebuild Skype, Microsoft is unable to improve even the most basic aspects of the service, there must be something fundamentally wrong with it. What else could it be? It's time to cut loose and move on.

Discord would solve all of Microsoft's social shortcomings

Xbox Game Pass Discord Nitro Deal

Source: Discord (Image credit: Source: Discord)

Microsoft has already been working pretty closely with Discord in recent years, and we've seen evidence that Microsoft is looking at even deeper integration between Xbox messaging and Discord in the near future. This could be a hint that Microsoft is indeed in the bidding to acquire the service, which is synonymous across the board with gaming communities everywhere.

Microsoft essentially has a choice to build up its own competing services or buy Discord outright.

Microsoft has attempted to emulate Discord's features in some ways. Microsoft's own "Xbox Clubs" feature started fairly promisingly, and we even saw designs that would've seen Xbox Clubs become even more "Discord-like," in previous years. Those updates never materialized, however, as Discord's popularity continues to gain pace.

I wrote an article in the past about why Microsoft can't ignore the rise of Discord. It was always apparent to me that Discord would eventually join a larger tech company. It was merely a question of "who," and "when."

Source: MicrosoftXbox Live and Discord enjoy some limited forms of integration, which could get deeper in the coming months. (Image credit: Source: Microsoft)

In that article, I wrote that Microsoft essentially had a choice to build up its own competing services or buy Discord outright. Arguably, the former hasn't happened. Xbox Live and Xbox Clubs haven't had meaningful upgrades in what feels like forever, and lag behind Discord and other instant-messaging services across PCs, and crucially, mobile phones, where Microsoft aims to deliver the majority of its growth for Xbox Game Pass in the near future.

Microsoft wholly missed the boat with streaming, failing to catch up to Amazon's Twitch with Mixer. Allowing Discord to go over to Amazon or another competitor could potentially end badly for Microsoft, particularly if, for example, Amazon sought to integrate Discord with Twitch and its home-grown PC game streaming service Amazon Luna.

"Social" is Microsoft's big blind spot

Discord attacks Skype

Source: DiscordOlder Discord web pages asked users to "Ditch Skype." It doesn't need to do that anymore, since users have already ditched Skype. (Image credit: Source: Discord)

Microsoft's attempt to buy TikTok last summer should serve as an indicator that Microsoft knows the importance of social media. In some ways, social media is the glue that many of its services simply lack. Discord isn't necessarily full-blown social media in the same vein as YouTube or Twitter, but it is crucially social in a way that it builds communities, and re-engages users passionate about a whole range of topics and subjects. It's also faster, and more intuitive than Microsoft Teams, arguably making it more productive for smaller teams who don't need the more powerful enterprise-level integrations.

Microsoft's home-grown consumer-oriented social platforms have fallen too far behind their competitors to ever catch up at this point. Redmond has found success with LinkedIn and Microsoft Teams, but Discord's tech could become the glue that makes these services and features more social for regular users, thanks to superior fundamental services and an improved user experience. Whoever lands Discord will gain a big advantage over Microsoft's entire portfolio of services, if Microsoft is forced to continue using the dinosaurian Skype as its primary mode of comms delivery. This is one deal Microsoft can't afford to let slip away.

Jez Corden
Jez Corden
Co-Managing Editor

Jez Corden a Managing Editor at Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!

27 Comments
  • You mean buy it to strip it down and retrench the 3 staff members
  • Don't touch it Microsoft, just don't.
  • Would be good if Microsoft bought discord. And finally get rid of the expensive subscription. Make if free like group me. Btw I been using group me it is way easier to make groups than discord
  • MSN/Live Messenger were so much better than almost anything out there now. I really wish they hadn't turned those services off. MS Mesh too, that was another great product they got rid of.
  • Don't hesitate ?
    Probably very good for Microsoft ecosystem and Xbox Social.
  • Teams is a champion.
    Skype is deteriorated, now is Teams.
    Microsoft could have several compatible messagery.
  • I find it funny that you ran this around the same time your colleagues wrote about trying Guilded as an alternative to Discord and how Microsoft's basically bungled messaging platforms for 20 years. I'm not a fan of this pickup. It's another "Microsoft showed up late and needs to write a check" solution, but it doesn't tackle the core failures of Microsoft to do things right. They bought Skype and it languished until it became irrelevant. I don't think writing an even-bigger check will fix Microsoft's poor innovation strategies. They just went through these same pains AGAIN with Xbox. They gutted all of the development talent, fell way behind in content, then started buying up studios to fix it. Thus far, we've not gotten any content for it, and the biggest studios that HAVE been working within Microsoft seem to be behind on projects (Turn 10 and Forza's multi-year gap between releases) and generally a mess (343 and their doubly long dev time for Halo Infinite, which hasn't been received well). Then, of course, you have the other things MS has mismanaged in the consumer space. They did terribly with Windows 10 Mobile under Nadella. Their Band efforts weren't executed well at all (mostly because they showed up late and did no marketing, like Zune with less effort). WMR is basically meaningless in the consumer space because it's done nothing to make you aware of it next to Oculus, SteamVR, and PSVR. The last concern is openness, of course. The big question on the ZeniMax pickup was whether Sony fans would lose access to future franchises that MS now owns, which seems likely. In a similar manner, if Discord going to morph to replace XBL chat and make using it from other platforms a pain? Is it going to try to coexist next to XBL chat and have another confusing mess like you have between the purposes of Skype and Teams together? I don't know how well MS would integrate it, or how quickly, but I worry they'd just make a giant mess and turn the platform into another corpse of Microsoft's manglement.
  • Buy discord for $10 Billion.
    Or create something superior for one tenth that amount. $10B is a huge amount of money. Microsoft (or any other software company) could write any software they wanted for that amount.
  • well they won't have the userbase of discord
  • And they still have to convince people to use Microsoft instead.
    Microsoft buying Discord is pretty much getting that all the active userbase it currently it has and growing. The other issue to tackle for Microsoft is even more difficult, to convince people after they bought Discrod that this time, they won't mess up. So far with their acquisition of LinkedIn, GitHub and even Minecraft were still successful on their own right. So there is a chance. But they also had decades of failures that will be hard to gain trust again. Only solution is just to basically prove they are not messing it up and actually making it better.
  • Skype, SwiftKey, Mixer, Wunderlist is what the userbase is familiar with and all of them languished under MS. The instant Microsoft PR says the deal is done, you're going to see a mass exodus of that userbase.
  • What's wrong with SwiftKey? It's still massively better than any of the stock keyboards I've tried on Android.
  • What would this userbase give them?
  • It depends on how they utilize the platform. If they integrated Discord as THE PLATFORM for Xbox LIVE, then they money they spend letting its poor messaging/chat features offer is gone because Discord handles it. They get the subscription money from the Nitro fans. They possibly roll some Nitro features into Game Pass Ultimate and have more people sign up for Game Pass Ultimate for it. If they just buy it and leave it to compete with Xbox LIVE chat (like Skype/Teams and Wunderlist/To-Do), then it's probably just messy and doesn't go over too well.
  • The main problem is that Microsoft has tried the "make our own" route and failed repeatedly. They just axed all of their in-house dev studios and bought new ones because quality games were hard to come by. Their Windows phone efforts were a mess. They couldn't compete with Zune or Band. They made the WMR platform and have nothing to show for it. Groove Music (with Xbox Music and Zune before it) failed as services. Their digital stores have generally been received poorly (MS Store on PC, especially). Microsoft hasn't done ground-up things very well in the last decade, with Surface (nearly a decade old itself) is kind of their one big exception in the recent past. At the same time, Microsoft's done a really poor job with the "write a check" solutions. Buying Rare to make games hasn't gone well. Skype turned into a running joke. Nokia's mobile crew was run into the ground. There isn't a "better way," if Microsoft messes it up regardless. However, they money they threw at Minecraft sure seemed to work out, that's maybe the best of their big-money acquisitions in the recent past. None of their in-house work has matched its success or come anywhere close.
  • Never heard of it.
  • If they keep it as a separate company like LinkedIn, it would be good for Microsoft to own it, better than Tencent and far better than Google who would just kill it off once it doesn't rake in enough ad money. Facebook buying it would be a death blow, and Apple would make it exclusive to their platforms.
  • Bunch to s salty MS fans here. They should buy it and leave it the same for everyone. I would be curious how Discord could enhance Game pass on PC and Xbox
  • People are "salty" because the less profitable a product is for Microsoft, the less attention they pay toward it.
  • The "buy it and leave it alone" process hasn't been good AT ALL. They did it with Skype, now we're asking if they should spend $10 billion for Discord to finally put that $8 billion mistake in the grave, basically. If they do this, it needs to both stay platform-agnostic AND replace the clunky social features on Xbox. They can't leave XBL chat/messaging in place parallel to Discord. Well, they can, but then it's another double-dipping mess like Skype/Teams. They should integrate it into Xbox, make the most of its user base, but leave it free to occupy the rest of the consumer space (the "meet you where you are" stuff that they've talked about with things previously).
  • I don't get all the love that Discord gets. I've used it a lot and I do see a place for it. There is only one thing that Discord does really well. And it's the public servers. that's the standout feature. In terms of everything else, other services including Teams does better. It does hurt that Microsoft put Teams's best features behind a paywall. I see it as a good buy as a lot of gamers use Discord for crossplatform gaming. It's agnostic. If you want to play Among Us, you need gamers from all platforms tot talk to each other and Discord is great for that.
  • I hope they get Discord
  • They already got discord. I don't think Discord is going to help them any more than Nokia Phone did. They could write a book, how to blow billions and not achieve anything.
  • I like Microsoft and I love Discord, but please God, no, do not let Microsoft purchase Discord. Microsoft has an absolutely horrid track record with consumer digital services. The only successful story they have is Xbox, while they have a marathon graveyard filled with the corpses of Zune, Groove Music, Windows Phone OS ecosystem (any iteration/incompatible rewrite), Skype, etc. It would all be well and good until the following quarter when Microsoft executives start treating it as any other offering from the company and shoe horn it into performance goalposts meant for executive offerings that don't fit at all with consumer requirements, nor take into account the good will and brand recognition that such services offer in a not immediately recognizable way to people counting beans. I don't even think Xbox would still be as supported as much as it is now what with the total failure of the Xbox One era if it wasn't an ample testing ground for Microsoft trying to build a horrible world where Windows universal UWP applications were a total experience and ubiquitous. With 10X about to release and fail around the corner, I question the usefulness of Xbox in that regard as it can easily take that place. Until Microsoft reconfigures their executive team moving into at least the brave new world of Doing Business In The 2010s, they will simply not be capable of offering and sustaining any such service like Discord. I hope Amazon gets Discord as they have at least supported Twitch in a way that is freely available and easy to use to most users. That said, Amazon does have major problems every time they periodically decide they need to virtue signal some bizarre hill they feel the need to die on, but that's more of an editorial and social engagement and management problem that won't be fixed until all activist workers are fired and blacklisted from the industry. So Amazon's not a great solution, but easily the best.
  • LinkedIn and GitHub are working out well
  • Those are business centric applications
  • I've been surprised there has been so little discussion about Mixer/Beam in all of this coverage and no one has mentioned Yammer as one of Microsoft's messaging acquisitions. Creating a hit and getting consumer buy-in out of nowhere is exceedingly difficult. Just look at GooglePlus or Apple's eVillage. I absolutely think it makes sense for Microsoft to buy Discord and I think letting them stand apart, in the same way that Git and LinkedIn have been able to operate should keep them on the right path..