It is a question that many have asked How Does Discord Make Money seen as it is a free service with no advertisements on it. It really the question of how the company could possibly generate revenue.
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What is Discord?
Discord is a website that offers free voice and text chat for gamers or that’s how it was originally marketed. By running Discord through server infrastructure nobody’s IP address can be revealed, unlike Skype, adding a secure way of communicating.
Users are then invited to join public or private servers to discuss certain topics most focused around gaming with a semi public forum style of connecting with like minded people, similar to Reddit servers, then have moderators to ensure the conversation flows down the right path and plots can be implemented to help with this.
Discord offers features that you might find on Skype, Snapchat, Instagram and WhatsApp. As well as being able to stream video games like on Twitch, the platform is free to use and ad free.
History Of Discord
Discord is the latest free communication platform that sees in excess of 300 million users today. But how did discord rise in popularity, which has seen its valuation soar above the $2 billion mark. Here’s how it happened.
Discord is a communication website which couples most of the features that can be found in other communication applications such as sending messages, voice chat, and even pictures and videos.
Discord was founded by Jason Citron, and was publicly released in May 2015. But sitrans first venture into business was with OpenFeint a social gaming platform for mobile games use on the iPhone and Android platforms that offer things like leaderboards, virtual currencies, and achievements all stored on the cloud.
OpenFeint was sold to Japanese mobile gaming company gi E for $104 million in 2011. Citron then use this money to set up the game development studio hammer and chisel in 2012. hammer and chisel his first game was called Fates Forever which was a tablet focused game centered around the multiplayer online battle arena style.
Citron set out to make a great complex game that didn’t compromise simply because it was made for a mobile device. The game however, wasn’t very successful, but it did inspire Citron to launch Discord.
The inspiration came from being unable to easily chat with other players to determine strategies as other VoIP or Voice over Internet Protocol were limited, clunky or unsecured. With backing from benchmark capital and Tencent. Along with EU web nine pluses incubator discord was created and launched in 2016.
The firm then received an additional $20 million in funding for its software, including investment from Warner media. And then in December 2018, the company announced $150 million in funding led by green oaks capital. This fundraising round valued the firm at $2 billion, which according to the website, in other words, means we’ll be around for a while.
How Does Discord Make Money
Let’s take a look at How Does Discord Make Money and How they got to this point in the first place. 2016 Discord promised that they would never run ads on their website or app. Most websites and free services including social media sites use advertising as a primary form of revenue. This would be the easy way out, but it is a big relief that Discord does not want to run ads and clutter up the user experience.
Discord uses a freemium model where users can pay a monthly fee for Discord Nitro, where they can access extras such as animated emojis as well as upload bigger files streaming 4k using go live and boost servers which improves their functionality.
Between 2012 and 2015, Discord raised just under $10 million as part of their Seed Round, Series A and Series B funding. Then in 2016 they raised $20 million through Greylock Partners. This money was used to expand Discord staff and pay salaries. In 2017, Discord raised an additional $50 million through Index Ventures.
In 2018, they raised another $50 million from investors. At the time of that round of Funding, the company was valued at $1.65 billion, doubling their previous valuation. In December 2018, Discord raised $150 million, with a $2.05 billion valuation. This round of funding included several companies, but was lead by Greenoaks Capital. Overall, as of the start of 2019, they have raised around $280 million from investors.
Discord Nitro is their premium subscription service that primarily is a way for Discord fans to help support the program’s development. Discord Nitro costs $9.99 a month or $99.99 for a whole year.
Discord Nitro gives some cool rewards. You get a custom tag, can have an animated profile picture, higher quality screen sharing, global custom emojis, a file upload size limit of 50 MB rather than 8 and of course a profile badge to show how long you have been supporting Discord with the advent of the Game Store, Discord Nitro also includes access to over $1000 worth of games, included in your subscription.
If you do not care about the games, you can opt for Discord Nitro Classic which includes every reward except for the free games this cuts the price in half to $4.99 per month or $49.99 for a whole year. It is unknown how many people have Nitro but with over 200 million active users at the end of 2018 it is likely a high number.
Discord company also sells their own merchandise to jobs and spare cash similar to many influences nowadays, But Discord also run their Own Game Store, which they launched in August 2018, which allows game developers to sell their games to a wider audience, with discord taking 10% of all sales.
Chat for Communities and Friends
Discord was launched to be a place for Gamers to Chat easily. But recently, the company has shifted to become a more universal platform in March 2020. They change their motto from Chat for Gamers to Chat for Communities and Friends. And from June 2020, they announced their intention to become a place for everyone to talk.
As the platform shifts, it looks like it’s moving towards a Reddit style with servers for fantasy football and investing among other things where people can chat anonymously about anything.
Discord features plenty of optional cosmetics such as special emojis, sticker packs and skins. These items can help Discord Make Money on a free product without offering too unfair of an advantage to those people. Discord sells t shirts, hats and other branded merchandise and presumably makes a bit of money off selling these items to Devoted Discord Vans.