How Does Discord Make Money?

Company: Discord, Inc.   
CEO: Jason Citron
Year founded: 2015
Industry: VoIP communication, Content delivery
Headquarter: San Francisco, USA
Type: Private
Valuation (Dec 2018): $2.05 billion

Products & Services: Free voice and text chat app for gamers | Discord Nitro – game library | Sell Your Game | Discord Game Store | Merchandise Store | Cosmetics
Competitors: Bigo | Twitch | Raptr | Curse | TeamSpeak | Skype

Introduction

Nothing could bother an avid group of gamers more than the disruption caused during chatting and communicating with their playmates. Skype and TeamSpeak are perhaps efficient communication applications, but their substandard call quality, poor group chat functionalities, security issues, and resource-heavy operations can’t be tolerated by games-enthusiasts in particular.

Jason Citron (CEO of Discord) and Stanislav Vishnevskiy (CTO of Discord) spotted the very same issues with their keen eyes and hearts that hold the passion for games. And, what’s next; Discord came into existence!

Designed by gamers for gamers, Discord was developed as an all-in-one voice and text chat platform with high-quality and lag-free voice chat facilities. It is a free, secure, and high-level messaging gaming app, far better than similar apps like Skype or TeamSpeak.

Interestingly, this app provides free services to users without displaying any advertisements. Now, out of curiosity, you may ask: how does Discord make money?

Let’s then discuss the Discord revenue model in detail while throwing some light on its business and app features.

Discord Business and App Features

14 million daily players, 315 million messages sent a day, and 250+ million active users can depict you the real picture of the success and popularity of Discord’s business. A propriety voice-over-internet-protocol (VoIP) application, Discord uses the freemium business model. Basic services are free for users, while premium features can be accessed through paying additional charges.

Free features of Discord are listed below:

1. You can connect with your friends through its free voice chat services.
2. You can add as many friends in your Friends List as you want.
3. You can run the app on both desktop and phone just like you use WhatsApp on your smartphone. For updates and messages, you can customize your notifications.
4. It requires minimal CPU usage and low latency.
5. Anyone can create an account on Discord, and it offers ultimate privacy. There’s no requirement to disclose the identity to others, and users can keep themselves anonymous.
6. You can also add bots to your Discord server if you want to enhance functionality. In fact, many cool bots are available on servers created by different developers.
7. With client-server communication encryption, Discord provides a high level of security and protection against DDoS attacks and keeps your IP address safe.
8. Other features include in-game overlay, multiple channels, custom hotkeys, modern text chat, direct messaging, and smart push notifications.

There are 2 more features which are recently updated to the app:

• Discord Rich Presence – Discord launched Rich Presence in November 2017 that enables easier integration of games and users of Discord. With this feature, players can easily see friend’s screen and share the games. They can send party invites to their playmates, launch games in a party, or simply watch and spectate during matches and competitions.

• Discord Stream Kit – Discord released a new page as Discord StreamKit on their website for steamers in April 2016. It includes all the tools and integrations that can be added to Discord server to power the stream. You can add apps like YouTube, Twitch, Muxy, Twinge, and Nightbot.

How Does Discord Make Money?

Discord uses the following monetization strategies to make profits:

1. Game subscription Service – Discord Nitro

Discord Nitro is the paid subscription option with charges of $9.99 per month or 99.99 per year. It’s a voluntary program for interested users to support the app. Besides, subscribed users can get access to a vast library of games, premium features, and enjoy extra benefits:

1. Personal Discord tag (with your chosen number)
2. Animated avatars/GIF avatar on your profile and GIF plays
3. Special Nitro profile badge
4. Custom emojis
5. Top-quality screen share with a higher resolution of 720p or 1080p screen share in your chat.
6. Greater upload limit and you can share files and images up to 50MB with Nitro.

Discord earns through this plan as many loyal fans subscribe and eagerly support the company.

2. Game store – distribution fees

Discord launched a game store globally in August 2018. The store allows game developers to sell their games. Developers can self-publish their games on the Discord store. Once the game is sold, developers get 90 % of revenue share and discord gets remaining 10 %.  For distribution of the game, Discord charges 10% of revenue, which helps Discord to cover their operating cost.  This 90/10 revenue split is a win-win situation for developers community and Discord.

3. Discord Merchandise Store

With its own merchandise store, Discord offers a great variety of merchandise like branded T-shirts, hoodies, caps, socks, etc. It earns a little revenue from selling these items.

However, it should be noted that Discord majorly makes money through its effective marketing and promotional strategies. It encourages its users to contribute to the growing company by purchasing their merchandise and cosmetic items.

4. Cosmetic Items 

Discord also sells various cosmetic items, including sound packs, sticker packs, customer emojis, and skins. Although, you won’t gain any particular advantage as a player by buying these items as it’s only for enhanced user experience and vanity purposes.

5. Funds and investments

Discord receives support in terms of funding and investments from big companies. Discord uses that for international growth and improving Discord platform. It has raised a total of $ 280 million in funding rounds, and now it’s worth a whopping $2.05 billion in valuation.

Discord’s Future Revenue Generating Models

Although the company stands firmly to keep its voice chat and messaging services free, still it needs to come up with some new methods to generate revenue and gain profits. However, its Nitro has the potential to provide a few revenue sources in the future:

1. Gamebridge – First released in initial months but removed shortly, GameBridge is expected to return in a different form. It provides ease to integrate the app in the game while reducing the burden of coding for game developers. Its benefits include auto-match players in voice channels, easy audio settings control, positional audio to enhance players’ distribution, sharing videos, GIFs and screenshots, and partner-like perks to build up a community.
2. Gaming stores and arenas – This platform sells several games. It also offers exclusive benefits to its Nitro subscribed users. It can augment its services on this platform to increase its revenue.
3. Revenue Sharing – Partnerships with several gaming companies can help Discord earn more revenue in the future. Inviting more gamers on its platform can be really beneficial. Besides, it can gain profits through successful referrals upon which more users turn out the buyers of their games, features, or items.

Final Word

Discord has remarkably contributed to the success of the gaming world. For coordinating and communicating with other game-lovers worldwide, it provides the friendlier chat program for gamers that are offered by no one else. The passionate souls of gamers wouldn’t get so much convenience without it that’s why Discord is here to rule for long in the market. It should keep improving its features, security, and bring some revenue-generating source as discussed above.

Tell us what you think? Did you find this article interesting?                                                   
Share your thoughts and experiences in the comments section below.