It came out in March that Microsoft was negotiating to acquire the chat platform Discord, at a price somewhere north of $10 billion. Nothing was carved in stone, as the report said other parties including Epic and Amazon had also engaged in discussions about a possible buyout, and one Bloomberg source said Discord was more likely to go public than to sell itself off.
Discord’s ultimate status is still up in the air but according to a new Wall Street Journal report, “advanced talks” between the two companies have not worked out, and Discord has now halted the process in order to reconsider an initial public offering—the first step in the process of converting from a private to a publicly-held company—at some point in the future.
It’s possible that talks between Discord and Microsoft could resume, and as we said in March, a successful takeover could be a major strategic pickup for Microsoft. Discord is practically the default communications platform for gaming communities at this point, and last year it began taking steps to move beyond that niche to become a more general purpose chat app.
According to a recent TechCrunch report, Discord’s valuation doubled from $3.5 billion in June 2020 to $7 billion in December of the same year, but in March 2021 the company told WSJ that despite significant revenue growth, it isn’t profitable. That shouldn’t be too much of a concern for Microsoft, though, as it’s currently valued at just shy of $2 trillion, and can afford to eat some losses. It may also be especially eager for a win after losing out to Oracle on its 2020 bid to acquire TikTok.
Discord declined to comment on the report. I’ve reached out to Microsoft for comment and will update if I receive a reply.
Source: https://www.pcgamer.com/discord-reportedly-halts-buyout-talks-with-microsoft
