The game lovers and tech enthusiasts have been reporting about their curiosities regarding how does Discord make money. This is because the simple and profit-free (as it seems) operations of the Discord app look too easy to attracts money. Well, the answer lies in the marketing strategy, and we are going to shed light on that. Let us talk about the Discord app and how intelligently they managed to rise.
How Does Discord Make Money | About Discord
Before you know how does Discord make money, we suggest you learn about the purpose of Discord too. The Discord is a service that gives free voice and video calls along with free texting during gaming sessions. It was designed by gamers to cater to the needs of other gamers. The software’s primary focus rests upon the delivery of HD quality and unhindered voice calling to the players for seamless communication with gaming simultaneously.
The gamers absolutely love the Discord app as the chat services are reliable and fully free of cost. There is no limit on the number of members you can add in a group. It allows the users to participate in theme servers that are randomly generated by the users logged in. You can continue enjoying access to the servers until you have the participation link or invite.
The group admin is enabled to host video as well as voice channels and even text. The rest of the members can use those channels to discuss any particular topic related to the game. The main target audience of the software includes gamers, although, different user groups belonging to fields like art, entrepreneurship, music, etc. also enjoy Discord.
How Does Discord Make Money | The history behind the launch of Discord
With a humble beginning as a VoIP, Discord journeyed to the top of the communication world into becoming the largest and most popular communication platform among the gamers in the world. This platform for social gaming was launched by a man named Jason Citron, who simultaneously ran OpenFeint, which is another social network platform for gamers who use iPhones.
He later gave away the OpenFeint technologies to the Japanese service GREE for a price of 104 million US dollars in 2011. Out of that money, he built a studio which he named Hammer & Chisel. Later in 2015, the team Citron launched a game Fates Forever in the category of MOBA games. The game has its competition with other games in the category like League of Legends. It did well in the reviews but not in the revenue market.
A developer named Stanislav Vishnevskiy of the team Hammer and Chisel noticed the difficulties that the gamers had with the VoIP options while figuring out the gameplay concepts. This dilemma turned out to be the reason behind the development of a better chat program for the gamers that would be hassle-free. Discord now became the central element of focus, and the company went on to make it a separate software entity.
Their game, Fates Forever, was already suffering a loss. So, Citron decided to pull it down and shifted the focus upon developing Discord into fully-fledged software of its right. Discord was thus launched with Citron as the CEO and CTO being Vishnevskiy. The idea got investors’ attention and huge market players like Benchmark Capital and Greylock Partners funded for it leading to a collection of about 70 million dollars to date.
The official public release of Discord was made in 2015. Citron made his intentions clear when he said that Discord was going to only rise from there. May 2018 saw the third anniversary of Discord in the playpen with users over 130 million.
PS: here is the full comparison of Teamspeak vs. Discord for your reference.
How Does Discord Make Money | Features of the Discord app
If you wonder how does Discord makes money, then an idea about the features of the app will make you understand better. The app has two versions- freemium and premium. The business model of freemium provides the basic services without levying any charges, and the premium model takes charges for additional features.
Let’s now see some of the features of Discord that are available for free:
- 100% free of cost communication
- Low latency mode
- Optimized CPU consumption
- Enable friends list
- Easily compatible with the mobiles and PC both
- DDoS and IP protection enabled
- Direct texting enabled
- Modern interface for text chats
- Various channels
- In-game overlays
- Customized hotkeys
- Complete permission for access to most of the features
- Advanced push notifications
Wondering how does Discord makes money, know that they have been expanding the list of features over the years after its launch with the addition of better and advanced elements.
StreamKit Discord: The StreamKit was a new page that was launched by Discord on the website in 2016, which was dedicated separately to the streamers. The page contains all the various integrations and tools to facilitate better streaming like on Muxy, Nightbot, OBS, GameWisp, Patreon, YouTube, Twitch, etc. that can be added to the Discord servers.
Rich Presence Discord: This feature was launched in 2017 to allow the games’ easier connection with the Discord users. With the help of this feature, anyone can easily jump into matches and play games with their friends anytime. You can even watch the matches and spectate over them, along with sending invites for parties to the co-gamers.
How Does Discord Make Money | Money-making strategies of Discord
Although Discord is a free VoIP app, it remains strict about its policy of keeping the chat platform fully ad-free. The developers have also been very stringent about the disallowance of selling the user data to any other party as they want to keep the trust intact in their relationship with the users. Now you must be surprised as to how does Discord make money without these activities. Let us then tell you how:
Merchandise store of Discord
The company also sells various merchandise like branded sweatshirts, hats, hoodies, t-shirts, etc. The company makes some revenue from the sale of these items as the devoted fans of Discord love them. And the company has its marketing strategy, which is very effective, and they follow unique ways of promoting their products. First of all, they have no usage charges for the application. Instead, they try to garner support for the app from the users by asking them to purchase the cosmetic items and merchandise so that they be able to meet the expenses of the company.
Random cosmetic items
Discord gives free services just like other popular games. However, certain features in the app are meant to be purchased like the customized emojis, skins, sticker packs, and sound packs. These are optional and random items that the users can buy without expecting to gain any significant advantage in the game.
This is a paid version of the application. The interested users can buy this subscription for 4.99 dollars a month or 49.99 dollars a year. This version has its own perks like:
- Personalized Discord tag
- Custom emojis
- Animated avatars
- HD screen share in chats of up to 1080p quality
- Unique Nitro badge
- Enhanced upload limit up to 50 MB.
Discord announced the addition of new games to the Nitro library in 2018. They will only charge 4-9 dollars more for enjoying these games. The loyal fans can choose to stick to the classic Nitro plan. So buying this pack contributes to the software development and is highly encouraged by Discord.
Support of the VCs to Discord
Discord made an announcement in 2018 about the signing of a deal worth 150 million dollars at the staggering valuation of 2.05 billion dollars. The companies involved in this deal were Greenoaks Capital as the lead with members from Firstmark, Tencent, Index Ventures, Technology Opportunity Partners, and IVP. The fundings that come from such big companies are used by Discord in the promotion of international growth of the brand and improvement of Nitro along with rewarding the employees.
Revenue strategies of Discord for the future
Now you have an answer to how Discord makes money, so let us tell you how they will continue making money in the future. They have been making plans to survive in the competition, along with retaining the primary components of the service. Other than Nitro, Discord is striving to play the game better with the following revenue sources:
This feature allows for easy integration of the app with the game. It was released for free usage but soon was disabled. Several interesting features of it include:
- Auto-matching of players in the voice channels
- Positional audios
- Easy controlling of audio settings
- Community building benefits of partnership
- Video, GIFs, and screenshots sharing enabled
- Auto-creation of servers in the gaming guilds for temporary or permanent status
2. Revenue sharing with the games
Discord can partner with Gaming companies to earn more revenue through referrals. They recently partnered with Spotify, allowing the users to connect the two accounts, share the music over their profile, or enjoy music at the servers only. This is a great strategy to keep the gamers attracted, and the company might venture with the same concept in the corporate or art world too.
3. Launch of a Game Store
Discord announced the plan of launching a dedicated game store in 2018. They have already launched the beta version of a store in Canada to around 50,000 users, which was later made available to everyone. Now they sell games directly and made the access exclusive for the Nitro subscribers. The “First on Discord” platform has been used by Discord to launch the exclusive services and new indie games.
90/10 Revenue splitting by Discord
This was another marketing strategy that Discord came up within 2019, which involved the sharing of the revenues in 90-10 proportions for self-published games. Discord also strove to transform the game store into a self-serving game publishing platform. The revenue split would allow any developer to publish its games on the Discord owned store and get a 10% share in the revenue that is generated due to it. Discord also announced the rise of the active user base to 250 million in 2019.
The success rate of Discord business
So other than how does Discord make money, questions about the profitability of Discord also hold ground. Let’s analyze that.
Despite working upon the freemium business, it is evident from the available performance data that Discord has managed to earn more than enough money for operating the company nicely. Ever since its launch in 2015, Discord has kept the investors glued to it with big investments and funding. It reflects the success they have gained. Their user base has also significantly increased, where they started with a family of 25 million and grew into a vast one of 200 million users latest.
The revenue that they earn from the merchandise and subscription plans sale has a little margin, but the collective gains made from the enormous fan base are huge and enough to keep the company running. Recently the company has been experimenting with new marketing strategies and coming up with new ideas like the game store or the revenue split of 90/10. All of this indicates the strategical strength of the company and the successful future that they hold.
There have been certain safety issues associated with the software that found a way in the discussions around the world. Language abuse, profanity, explicit content, violent threats, racial bigotry, drugs, etc. have been frequent in the discussions on the servers. Different disturbing stories have been reported, and all such mishappenings have been attributed to the easy UI and relative privacy of the app. However, the company has been making strides towards securing the website from such issues.
Final words about How Does Discord Make Money
We have done a careful analysis of Discord and let you know all about how does Discord make money. Obviously, the company is here to stay and will only do better in the future, owing to their brilliant strategies and user attentiveness. Do try out the app if you are also a gaming lover and let us know about the experience.