How Does Discord Make Money
Video games have become mainstream in today’s society. As a matter of fact, there are more than 2.5 billion video gamers across the world. The gaming industry has always been promising, where revenue is expected to reach $180 billion by 2021. It’s no wonder a lot of business model gears toward services provided for gamers.
One of the apps that made noise is Discord. It is a free application that offers voice, text and video chat application dedicated to active gamers. A lot of gamers love this application because they can use its services conveniently, without any advertisements popping out on the screen. This interesting feature makes you wonder and ask: How does Discord make money?
Let’s get to know this app deeper and explore how the developers monetize this popular game application.
What is Discord?
Designed by gamers for gamers, Discord is a free platform that offers voice, text, and video communication services. This software is created so that all gamers across the world can communicate with each other conveniently during games.
Jason Citron and Stanislav Vishnevskiy developed Discord as an all-in-one text chat and voice platform with lag-free and high-quality voice chat facilities. Discord has come a long way since its official release to the public in 2015. As of May 2019, there are more than 250 million Discord users across its web and mobile platforms.
How does the app work?
Anyone that is logged in on the app can generate theme servers. You can join these same servers as long as you have the participation link or you are given the invite. Admins of these servers can host voice and text channels where members can talk about different topics or share ideas.
Discord aims to target gamers across the world. However, this app is also patronized by other interest groups.
Discord App Features
Discord utilizes the freemium business model. While users can access basic services for free, they have the option to take advantage of premium features for an additional charge.
Basic free features of Discord includes:
- Free voice chat services
- An unlimited friend invites in Friends List
- Both smartphone and desktop accessibility
- Low latency and minimal CPU usage
- Ultimate privacy in creating a Discord account
- Enhance functionality with bots
- Protection and high level of security against DDoS attacks
- Multiple channels
- In-game overlay
- Modern text chat
- Custom hotkey
- Smart push notifications
- Direct messaging
How Does Discord Make Money
Discord is firm with its stand against using advertisements on its platform. They also value user relationship which is why they are strongly against selling the data of their users. With these strong company principles, you may be wondering how does Discord make money and generate revenue.
Here are some of the monetization strategies used by Discord.
Interested users can sign up for Discord Nitro, a paid subscription for $9.99 per month or $99.99 per year. It’s a voluntary program for loyal fans to show their support to the company.
Here’s a list of extra features that subscribers can enjoy when they sign up with Discord Nitro:
- Animated avatars
- Your own Discord tag
- Special Nitro Badge
- Customized emojis
- Boosted upload limit and the ability to share files and images up to 50MB.
- Higher resolutions screen share (720p or 1080p) in your chat
What sets Discord’s freemium business model apart is its marketing strategy. They don’t force its users to pay anything for its core functions. Instead, they encourage their loyal followers to support the application by purchasing the monthly subscription plan.
Discord Merchandise Store
Discord has its own merchandise store. This store sells company-branded T-shirts, tank tops, baseball tees, sweatshirts, socks, and hats. Discord earns a small revenue when a customer purchases a product from the merchandise store.
The store ships to over 180 countries. Just like most e-commerce stores, you can make your payment with Discover, American Express, Mastercard and Visa credit cards. Amazon Payments and PayPal are also accepted.
One of the biggest revenue drivers of the company is how they market and promote their products. Users can use the app for free however they encourage them to buy their merchandise to support the app.
In August 2018, Discord has launched a game store globally which serves as a platform for game developers to sell their games. Game developers can self-publish their own games. They get 90 % of the revenue share once their game is sold. The remaining 10 % goes to Discord. The 90/10 revenue split offers a win-win situation for Discord and the community of game developers.
If you want to develop your own game but don’t know how or where to start, Steve Rabin’s Introduction to Game Development can point you in the right direction.
Optional Cosmetic Items
Just like with other popular games, Discord lets you use the platform for free however you have the option to purchase optional cosmetic items. Cosmetic features available for purchase include custom emojis, sticker packs, sound packs, and skins. You should note though that purchasing these cosmetic items won’t give you any particular edge as a player. Rather, it serves for the purpose of vanity and enhancement of user experience.
Funds and Investments
One of the biggest contributors to how does Discord makes money is funding and investment support from huge companies. As of December 2018, it has received a $150 million deal in funding at a staggering $2.05 billion valuation.
The round was led by Greenoaks Capital with participation Technology Opportunity Partners, Index Ventures, IVP, Tencent, and Firstmark.
Most of these funds go towards creating plans and strategies on how to improve Discord Nitro. Discord also uses these funds to cement its international growth.
The Future of Discord Looks Brighter
There is no doubt of Discord’s contribution to the gaming world. This app offers a one-of-a-kind platform where gamers can enjoy all the functionalities with several customization features. It’s definitely an app for modern-day gamers.
Discord still takes pride in its free voice communication service as its primary feature. However, as gaming demands increase, the company needs to evolve and think of new ways of making money. Additionally, Discord should continue improving its security, features and revenue-generating source.
Discord has enormous growth since its launch. They have managed to build an extensive scope of loyal supporters. Based on the figures that this company is cashing in, we can safely say that the future indeed looks brighter for Discord.