Discord is a messaging app that allows gamers (and everyone else) to organize themselves into “servers.” Android, Mac, iPhone, Xbox, PlayStation, and PC devices are supported by the platform.
Nitro subscription bundles are how Discord generates money. Server boosting and fees from games sold on its servers are among its other sources of revenue. The core software is still free, so users pay when they want to use the premium features.
Discord, founded in 2015 and is located in San Francisco, has quickly risen to become one of the most popular chat apps in the world. Over 100 million active users are scattered across 6.7 million servers, according to the business.
What Exactly Is Discord?
To know how does Discord make money, then Discord is a chat program designed primarily for video game players. Text, voice chat, and video calls are all supported on the platform. Android, iPhone, Mac, Xbox, PlayStation, and PC devices are all supported by the software.
Discord allows users to organize themselves into Discord Servers, which are virtual communities. It works similarly to Slack groups. There are numerous channels on these sites that are used to discuss and organize various topics.
A single user can only join 100 servers at a time. Private ones require invitations and approval, but public ones can be accessed with a link. Any given server can have a maximum of 500 channels.
If group chats aren’t your thing, Discord also allows users to communicate directly with one another. Discord is also connected with other sites like YouTube, Spotify, and GIPHY, allowing users to share third-party content on the network.
However, Discord is not just for gamers. The software is used by communities ranging from book clubs to dance classes to discuss any topic and plan upcoming activities.
According to the corporation, the network now has over 100 million active users who spend 4 billion minutes chatting on 6.7 million busy servers.
A Short History Of Discord
Jason Citron (CEO) and Stan Vishnevskiy (CTO) founded Discord based in San Francisco and was first publicly released in 2015. (CTO).
Both founders have prior experience in the game business before establishing Discord. Citron sold OpenFeint, a mobile platform for social gaming, to Japanese game producer GREE for a total of $104 million when he was 26 years old. The company had only been around for two years at the time.
While both founders have been ardent players since they were children, Vishnevskiy’s gaming resume is a little longer. He grew so proficient at it that he quickly gathered a squad of 40 players, eventually becoming the game’s top-ranked team. Vishnevskiy developed a few software tools that allowed his team to organize themselves better, contributing to its success.
He subsequently packaged these instruments and attempted to sell them, but no one was interested. As a result, he needed to obtain an actual job by knowing how does Discord make money. He wandered about the Valley, working for a few startups until he met Jason Citron through common acquaintances.
What is Discord’s revenue model?
Discord’s primary product is, as previously said, completely free to use. It enables the company to sign up users in a short period.
It, like any other business, has to work out a revenue model at some point. Discord released its so-called Nitro bundle in 2017. In the years since other sources of revenue have emerged.
However, not all of the company’s activities have gone according to plan. After two years of existence, the company closed its goods store, which sold Discord-branded clothes.
Some revenue models succeed, while others fail as startups experiment with various revenue strategies. Discord earns money from three different sources for the time being, which we’ll go over in detail below.
Discord offers a premium subscription plan called Nitro. The cost of Discord Nitro is $9.99 per month or $99.99 per year. Nitro Classic, the less expensive version, costs $4.99 per month or $49.99 per year.
Discord developed its game store in 2018 to compete with Steam and other similar platforms. Nitro subscribers knew how does Discord make money and had access to Discord-exclusive titles like Dead Cells and Into The Breach through the game store. The store never really took off, and it was shut down a year after it opened. Discord swiftly shifted to a new business model, partnering with game creators to sell games solely through its servers.
To begin on how does Discord make money, developers must first get their servers verified. Following that, Discord will promote the game and server on its platform, giving the devs the exposure they need.
When a game is purchased on Discord’s servers, it generates revenue. Each sale earns the company a 10% commission. For example, if a game costs $14.99, Discord will receive $1.49.
Server boosting allows a Discord server’s functionality and performance to be improved. A monthly server bump costs $4.99. Nitro subscribers will receive a 30% discount on the server boost, as previously mentioned. When two users pay the subscription price, Level 1 is unlocked. Level 2 necessitates 15 boosts, whereas Level 3 necessitates 30. The premium features are available to everyone on the server, regardless of whether they have paid for the boost.
Funding, valuation, and revenue for Discord
According to Crunchbase, Discord has raised $479.3 million in venture capital funding over 11 rounds. Spark Capital, Tencent (developer of League of Legends and PUBG, among other games), Index Ventures, Benchmark, Accel, General Catalyst, and others are notable investors.
Discord was valued at $7 billion during its most recent fundraising round, reported in December 2020. This is a 100 percent rise over Discord’s previous valuation of $3.5 billion, which it achieved in July 2020. According to Forbes, Discord will make $120 million in annual income in 2020, up from $70 million the previous year.
Who Is the Owner of Discord?
Discord is not required to disclose its information to the public because it is a privately held firm. Citron was most likely to secure money on favorable terms, considering his previous $104 million exits. As a result, he and Vishnevskiy should remain the company’s principal shareholders.
As the firm’s primary Series A investor (and participant in subsequent rounds), Benchmark will likely be one of the largest shareholders on the institutional side.
Once the Discord files are made public, the exact ownership stakes should be exposed. So far, no plans for an IPO have been made public.