How Does Discord Make Money? If you ever played games or have been friends with pro-gamers, you may have heard about Discord. It is quite literally the virtual rest house for gamers- a freeware application where you can text, voice chat, and screen share while playing games with friends. Unique to other existing social media platforms, how discord makes money to remain in a competitive era is worth delving into.
Not Just Another Messaging App
Discord is a freeware instant messaging and VoIP (Voice over Internet Protocol) application, similar to competitors TeamSpeak, Skype, and Slack. Though its base users were gamers, now the community is too diverse. The interface provides a retro gaming atmosphere. Discord has themed servers users connect to chatrooms for sharing media and chatting. Bots to carry out commands. It’s very flexible, running on Windows, Mac, Android and iOS.
How it Began
Discord’s journey began in 2015 when its CEO Jason Citron and CTO Stanislav Vishnevskiy realized that gamers needed a place where they can communicate better and enhance the experience of collaborative gaming. Born from a side project, Citron sold OpenFeint and began working on developing Discord. He tried to stick to its humble origin- just a place for gamers to hangout. But now, it is no longer just gamers’ haven. As of 2020, Discord has more than 250 million users.
How Discord makes money is affected by its fundamentals and marketing strategies. Unlike other social media, Discord claims it does not sell users data, and has no advertising revenue model. The strong community it has built with gamers helped to spread the word of its advent.And yet, Discord has a valuation of $3.5 billion. So, how does Discord earn without inclining towards the advertisement revenue model?
Small Steps Through Merch and Cosmetics Selling
One of the ways the company makes a small profit is by selling merchandise. It owns a merchandise shop, where t-shirts, hoodies, socks designed by the brand is sold to customers. Also, Discord sells different cosmetic items ranging from sticker pads, customer emoji to sound packs. But these are small ventures by the company.
Discord’s biggest strength is its users, urging the community to support Discord by purchasing its products. This small venture allows Discord to connect and strengthen its users- resulting in rapid growth. Users in total have spent 4 billion minutes on Discord, and it’s not just gamers. Each cause and each fan base has its own Discord server, allowing it to put behind its long lost competitors.
Discord is gradually changing the way it earns. A very recent addition to its strategies is the premium version of the application- Discord Nitro. It is a paid subscription version with a monthly fee of $9.99 or $99.99 annually. Subscribed users can enjoy an upgraded set of features, such as personal Discord tag, animated avatars, customizer emoji, and a very high-resolution screen share option. The storage capacity is also increased and it allows access to a rich library of games. Many users subscribed to Nitro as Discord has always delivered the best features for its users and has a loyal base.
In August 2018, Discord launched a game store. It was a much-anticipated initiative as it would allow game developers to sell their games directly to the gamers through Discord. Discord has a 90/10 shared revenue system. When a game is sold, 90% of the revenue share goes to the developer while Discord acquires the 10% share. Allowing indie games to be accessible on the platform, it’s attracting new game developers, as well the existing ones. With the growing user base, the company will have more customers willing to buy from the game stores.
Discord’s biggest financial support is its venture capital options. According to the company statements, Discord received new funding of $100 million. As of now, it has raised over $280 million in funding rounds. Greylock Partners, Spark Capital, Benchmark, and Greenoaks Capital in participation with other Tech investor companies invested millions on Discord.
Experimenting New Things
Game-Bridge, a new feature launched by Discord, allows game developers to integrate Discord with their games. It has features, such as auto-match players, and integrated sharing. But it has since been removed to upgrade. It is predicted to return with additional features.
Revenue sharing is one of the most important ways for the company to make money. Discord has partnerships with gaming companies that allows it to profit, such as with Twitch and Steam.
Discord’s feature launched on 2017, called the Rich Presence allows advertisements for sellers. This is a smart monetization technique by Discord to introduce advertisement without jeopardizing the ideals of the company. Another feature, such asStreamkit was introduced to elevate the user experience by providing streamers more facilities on the site.
Discord is still experimenting with its freemium business model, so it is expected that it will keep reinventing its monetization means. It will also continue to do so while ruling over other VoIP apps. The potential of this company is sky bound. In 2020, Discord was among the top 20 apps downloaded for the purpose of distance learning. Its servers are not just for Fortnite and Minecraft players, it has been a vital way of communication for social movements such as the recent Black Lives Matter. Discord promises to stand for what it was made for- “to bring people together around games”, but its reach keeps growing. And this is why it receives huge funds every year around.
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Discord’s current plan is to retain its functionality and usability and keeping on testing its limits by introducing new ventures and collaborations. In short, the way of Discord making money is trying out new modes- all the while upgrading itself. This is how it went from 25 million users to 250 million in just a few years- and it will continue to expand, excel, and accelerate.