Discord Ends Acquisition Talks With Microsoft; What's Next?

Discord halted negotiations with Microsoft Corporation about a potential acquisition to remain independent.

TechCrunch said the announcement comes after the two companies were reported "deep in talks" with two other companies over a massive $10 billion takeovers, but only Microsoft was called.

Discord's stock price soared during the pandemic when many gamers stayed at home with little to do. Forbes said the videogame chat company's value increased to a whopping $3.5 billion last year.

With such a high valuation, it's understandable that Microsoft Corporation wanted to target it for a potential merger.

Discord was primarily a cult favorite among gamers for much of its existence. A wider range of groups, including teachers and offices dealing with remote education and work gradually used the application in recent years.

Jason Citron and Stanislav Vishnevskiy, two video game fans, created Discord in 2014 intending to create a better forum for chatting and gaming.

The chat app looks like a cross between Slack and Reddit with free text, audio, and video messaging.

The application was in the right place ahead of the current voice chat trend that Clubhouse ignited.

Discord's decision to avoid a sale makes sense for a business that wants to retain its exclusive DNA rather than being absorbed into a larger company's existing product.

The decision could also keep the company out of a protracted antitrust fight, as lawmakers consider legislation that could prohibit big tech mergers in order to avoid further market consolidation.

Instead, the company has concentrated on developing a subscription company, selling a plan called Nitro to users interested in customizing their profiles.

Nitro, which costs $4.99 a month, had an estimated 1 million subscribers in June, a figure that has presumably increased as Discord's popularity has grown in recent months.

Discord might be looking for new ways to make money and become more valuable on their own before pursuing other market opportunities such as mergers. FinancesOnline recorded about 2.8 billion gamers in the world last year, so the company has a large market to tap into in the coming years.

Discord's decision to operate as an independent entity is likely to benefit them for the time being. It will be interesting to see what their future holds in a few years.