Discord reportedly halts buyout talks with Microsoft

(Image credit: Discord)

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.

Andy has been gaming on PCs from the very beginning, starting as a youngster with text adventures and primitive action games on a cassette-based TRS80. From there he graduated to the glory days of Sierra Online adventures and Microprose sims, ran a local BBS, learned how to build PCs, and developed a longstanding love of RPGs, immersive sims, and shooters. He began writing videogame news in 2007 for The Escapist and somehow managed to avoid getting fired until 2014, when he joined the storied ranks of PC Gamer. He covers all aspects of the industry, from new game announcements and patch notes to legal disputes, Twitch beefs, esports, and Henry Cavill. Lots of Henry Cavill.