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Microsoft Corp. is in talks to acquire Discord Inc., a video game chat community, is worth more than $ 10 billion, according to people familiar with the matter.
Discord has spoken to potential buyers and software giant Microsoft is in the running, but no deal is imminent, said the people, who have asked not to be identified because the talks are private. Discord is more likely to go public than to sell itself, one person said. Representatives for Microsoft and Discord declined to comment. VentureBeat reported earlier Monday that Discord was engaged in sales talks.
San Francisco-based Discord is best known for its free service that allows gamers to communicate via video, voice, and text, and people trapped at home during the pandemic have increasingly used its technology for groups of people. study, dance lessons, book clubs and other virtual gatherings. It has more than 100 million monthly active users and is developing its communication tools to make it a “place to talk ”rather than just a gamer-centric chat platform.
Microsoft, which last year looked to buy a social media app TikTok and held talks to acquire Pinterest Inc., looked for assets that would provide access to thriving user communities, according to people familiar with the business’s thinking. Microsoft’s Xbox business has also expanded the range of subscription benefits it offers as part of its Game Pass offering.
“Microsoft may eventually acquire Discord as it continues to reorganize its gaming business towards software and services,” said Matthew Kanterman, analyst at Bloomberg Intelligence. “There is a great opportunity to bundle Discord’s premium offering, Nitro, into the Game Pass service in order to generate more subscriptions compared to the 18 million registered.
After Microsoft’s recent $ 7.5 billion purchase of ZeniMax Media Inc., owner of Bethesda Softworks, publisher of The Elder Scrolls and Doom, an acquisition of Discord would mark the redmond, Washington-based software giant’s desire to continue investing in its video game unit.
“We expect the Xbox to remain a purchaser to continue to strengthen the Game Pass value proposition and increase subscriptions,” Kanterman said.
Discord reached out to Microsoft to gauge interest, and Xbox chief Phil Spencer has spoken to the company, according to one person. The company raised $ 100 million at a valuation of $ 7 billion last year, according to Pitchbook.
Discord has also had discussions with Epic Games Inc. and Amazon.com Inc. in the past, according to two people familiar with the matter. Epic did not immediately respond to requests for comment. Amazon declined to comment.
(Updates with analyst comments beginning in the fifth paragraph)
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