At the end of March, American newspapers wrote that Microsoft would start negotiations to buy Discord, a chat and video calling app initially famous among video game enthusiasts, which has become very popular in recent months also due to restrictions imposed in much of the world. from the coronavirus pandemic. Discord is one of the apps with the greatest growth potential currently on the market, and according to the Wall Street Journal, which broke the news of the negotiations first, Microsoft is willing to buy it for more than $ 10 billion.
Born as a communication app for video game enthusiasts, for over a year Discord has become quite popular in other areas as well. Since it allows you to manage large groups of people and allows you to switch fairly smoothly from written chats to calls to video calls, many people have adopted it to stay in touch with loved ones or to organize various activities remotely such as online lessons. communications with family or groups of friends, book clubs, study groups, etc.
Discord was founded in 2015 by Jason Citron and Stan Vishnevskiy, and over the course of 2020 it nearly tripled its revenue (from $ 45 million in 2019 to $ 130 in 2020), greatly increased its monthly active users, which today are more than 140 million, and doubled its commercial value, which last December increased to 7 billion dollars after a large investment by several major American funds.
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The app was born very explicitly as a service to allow video game enthusiasts to communicate online while they play, via chat, call and video call. More or less all the big video game platforms have their own internal communication systems, but Discord works with all of them: it can be integrated with Xbox and Playstation, as well as obviously with PC and Mac. Discord is also used a lot by players who broadcast their games in streaming, to communicate with each other as they play, to communicate with spectators and to allow fans to communicate and chat with each other.
The communities of gaming enthusiasts are still by far the largest on Discord, but the app's features lend themselves very well to many other uses too, and this has helped its popularity soar. Those who are already users of other communication apps, such as Slack, which is widely used in the workplace, may find some familiarity.
The conversations on Discord take place within “server”, which is the name by which the app defines user groups. There can be publicly accessible and very popular servers, for example those dedicated to famous video games such as Minecraft and Fortnite, which have hundreds of thousands of users, and private servers, which can only be accessed by invitation, and with very few users selected by the moderator. All Discord users can create their own servers: for example, a user can create a private server to communicate with family members and a public one to welcome strangers to discuss sports, books or music.
Within the servers, the discussion can be divided into “channels”. For example, in the server dedicated to family communications you can create a channel for chatting, one for sharing photos, one for managing appointments and one for deciding what to eat for dinner. In each channel the communication can be written (each channel is therefore a separate chat within the same server) or voice or via video.
There are obviously also private chats, where you can write or speak privately with a single person, or with a small group.
Thanks to this structure that allows you to coordinate even large and complex groups, Discord has been adopted by many people to keep in touch with loved ones or to organize online activities, especially in this last year of pandemic. The New York Times, for example, reported on how it is quite used for remote book clubs, because it allows for a separate discussion to be dedicated to each book covered by club attendees, both in written and audio form.
In addition, Discord has been used a lot by amateur stock market investors over the past few months. For example, the investors who congregate on the Reddit WallStreetBets channel, and who contributed to major upheavals in the financial markets earlier this year, also had a very crowded Discord server, which they used for real-time communication (Discord closed the server at end of January for “hate speech”).
Other common uses are online lessons, especially private ones, or study groups. Discord is also widely used to organize remote party games, thanks to the integration with gaming apps.
Plenty of youtubers and influencers have opened a Discord server to stay in touch with their fans, and so have some companies: the Sacramento Kings NBA basketball team, for example, became the first US professional team to open last November. an official Discord server to allow fans to communicate with each other and with the team.
Discord took a long time to become so popular and it took a lot of work to attract such a diverse audience. Initially, in fact, the app's audience was very niche and full of extremists, so much so that for a period Discord was associated with American white supremacism. The first time the media dealt intensely with the app was in 2017, when supremacists and neo-Nazis used it to organize the racist and anti-Semitic demonstration in Charlottesville, Virginia.
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After Charlottesville, Discord worked very hard to eliminate the most dangerous and extremist servers and kick the most malicious users off the platform. Gradually, the app managed to make people forget much of its bad reputation, even if the moderation problems are still quite serious and frequent: two weeks ago Discord announced that it had closed more than 2,000 servers with violent or extremist content in the last six months of 2020, but in general the amount of inappropriate or hateful content on some servers is still high.
The app has remained very popular with video game enthusiasts, but over the past year its founders have realized that there was an opportunity to greatly expand the user base. In June last year, Jason Citron published a post announcing that the new Discord motto would be “Your place to talk”, and in which, while not disavowing the origins of the app as a service linked to the world of video games, explained that Discord has grown to become a communication app used for many other areas that often have nothing to do with video games.
According to many analysts, this is the reason Microsoft is interested in Discord. The app has a strong base of video game enthusiast users in which Microsoft, which produces the Xbox, is clearly interested, but it also has the potential to transform itself into a mass service, part social network and part app to communicate.
Discord is different from chat apps like WhatsApp and Telegram because it is much more complex and structured and allows you to have access to communities of strangers, but it is also different from social networks like Instagram and TikTok because it is all based on direct communication, it does not have a bulletin board to scroll through and does not have an algorithm that selects the contents to show to users.
Discord's business model is also interesting: the service is free, and does not rely on advertising but on the sale of monthly or annual subscriptions that allow users to get some more features, including high-definition video calling and the ability to share large files (the free version allows sharing of files of 8 megabytes each, the more expensive subscription allows you to upload files of 100 megs). In addition, the subscription provides two “Server Boosts”, which serve to “enhance” a server. When a server receives enough boosts, all participating users receive benefits, such as personalized emojis and high-definition calls.
Usually “Server boosts” are used by users for the servers they are most fond of, as a gift to the community they belong to, and can also be purchased individually.
This business model is of great interest to investors, because most of the problems of traditional social networks derive from the need to increase the display of advertising, while on the contrary, chat apps are struggling to find sources of income: WhatsApp, for example, is experimenting several ways to get income, but with little success for now. Even though Discord has greatly increased its income, even Discord has not yet managed to make a profit and is spending more money than it collects.
