Microsoft Corp. is in advanced talks to acquire messaging platform Discord Inc. for $10 billion or more, according to people familiar with the matter, as the software giant seeks to deepen its consumer offerings. Microsoft and Discord are in exclusive talks and could complete a deal next month, assuming the negotiations don’t fall apart, the people said.

Originally favored by gamers, San Francisco-based Discord offers voice, text, and video chatting. The platform’s popularity has surged since the pandemic took hold as people stay home and connect online—as has that of other chat services, like Facebook Inc.’s WhatsApp and Signal Messenger LLC. Discord has been considering an IPO.

Microsoft, which last year sought to buy social-media app TikTok and held talks to acquire Pinterest Inc., has been shopping for assets that would provide access to thriving communities of users, according to people familiar with the company’s thinking. Microsoft’s Xbox business has also been expanding the suite of subscription perks it provides as part of its Game Pass offering. Microsoft shares were up about 1.2% in the first minutes of trading Tuesday.

“Microsoft possibly acquiring Discord makes a lot of sense as it continues to reshape its gaming business more toward software and services,” said Bloomberg Intelligence Analyst Matthew Kanterman. “There’s a big opportunity to bundle Discord’s premium offering, Nitro, into the Game Pass service to drive more subscriptions from the last reported 18 million.”

After Microsoft’s recent $7.5 billion purchase of ZeniMax Media Inc., owner of The Elder Scrolls and Doom publisher Bethesda Softworks, an acquisition of Discord would signal the Redmond, Washington-based software giant’s willingness to keep investing in its video-game unit.

“We expect Xbox to remain acquisitive to keep bolstering the value proposition of Game Pass and drive subscriptions higher,” Kanterman said. Discord reached out to Microsoft to gauge interest, and Xbox chief Phil Spencer has been talking to the company, according to one person. The company raised $100 million at a $7 billion valuation last year, according to Pitchbook.

Todd Horwitz Chief Strategist BubbaTrading.com
Stop being a prophet and make profits


Here is Saturday’s Recording of our Futures part time day trading webinar

Recording: Futures Part Time Day Trading