Discord and Microsoft have ended exclusive acquisition talks

As first reported by The Wall Street Journal, Discord has ended talks with Microsoft over a potential acquisition. Talks have come to a halt as Discord feels confident in its performance as an independent company with the ability to make themselves public down the line.

The Microsoft Discord acquisition

The purported deal saw Microsoft offering to purchase Discord for at least $10 billion. The deal was first reported last month. Discord’s market valuation rose to $7 billion last December thanks to a new round of funding.

The deal sprang from a previous relationship between the two companies. In 2018 Discord integration came to Xbox Live. This integration would display the player’s Xbox Live activity on Discord. Last year, Xbox Game Pass Ultimate subscribers also got three months of Discord Nitro free as one of their subscription perks.

Discord currently has 140 million active users on its platform, and has become ubiquitous with communication in the gaming community. The chatroom based program doubled its user base last year, thanks in part to the COVID-19 pandemic.

If Discord went public, it would be following in the footsteps of other gaming companies in the last year. Roblox Corp. is one such example. At the time of writing Roblox stock was priced at approximately $69 per share.

Users have found Discord and its feature set to be more appealing than those offered by similar services like Microsoft-owned Skype or Teampseak. An acquisition of Discord would have allowed Microsoft to expand further into the social media space, as it already owns LinkedIn.

Microsoft is hot off finishing its acquisition of ZeniMax Media and its publishing arm Bethesda in March. The acquisition also included ZeniMax-owned development studios including id Software and Arkane Studios. The deal closed for $7.5 billion and makes Microsoft the owner of 23 game studios.

This pattern of acquisitions has been the status quo for Microsoft in the games space for the last few years. Other acquisitions include Obsidian Games, Mojang and Mixer — which has since been shut down.