I realize I am extremely late to this party, but for those who have not yet heard the news there is a rumored discussion happening about Microsoft purchasing Discord. This acquisition has a rumored 10 billion dollar price tag associated with it and there are many articles talking about it so I am just going to link this one. This is apparently causing a large amount of discontent among the gamer circles, but I feel like this knee jerk reaction might be a little too fast. There are some things you have to understand before starting this article. My entire working career has been tied to Microsoft products and as such I have seen the ebb and flow of different initiatives. I’ve even been at several Microsoft development conferences over the years and had the benefit of meeting Bill Gates in the flesh during one of those cattle call meet and greet sessions. I feel like I sit comfortably in a camp between the Microsoft fanboys and the Microsoft doomsayers.
Microsoft has been on a bit of an acquisition spree of late snapping up a number of game studios, including the most recent Zenimax acquisition which largely just means Bethesda Softworks to most folks. From what I have seen so far, Microsoft appears to be a good steward of these games properties. For example I have followed Undead Labs pretty closely being a major fan of the State of Decay franchise and from what I can tell… Microsoft money has taken a lot of pressure off the studio to just do the stuff that they do best. Other commentary from folks at Obsidian and Double Fine seem to indicate the same. Not having to worry about how to make the next payroll probably does wonders for creativity in allowing folks to actually just sorta create the games.
However there is a very recent Microsoft failure in the minds of gamers and I think it is coloring their opinions right now. In 2016 Microsoft acquired a plucky little start up streaming platform called Beam and then proceeded to change its name to Mixer and pour copious amounts of resources into trying to make it a viable alternative to Twitch. This was a losing proposition from the moment Microsoft started down this path but it did give folks for awhile an alternative. The problem with this match up however is while you had Mixer backed by Microsoft, you also had Twitch backed by the power of Amazon. Twitch was already the brand leader in streaming, to a degree that not even YouTube has ever really been able to steal much market share away from them.
Having used both as a streamer and as a viewer… I personally believe that Beam/Mixer was the superior product. However I also believe that there was no fighting the purple juggernaut called Twitch. Having streamed on multiple platforms, there are just way more people that interact with Twitch as a whole and it becomes progressively harder and harder to convince your viewers to use anything other than that platform. Much like there will never really be a WoW Killer or a Facebook Killer… it is highly unlikely that anyone will ever top Twitch for streaming. They are just too dug into that niche and while I blame Microsoft for doing a piss poor job of notifying the streamers that they were going to be closing their doors… I don’t blame them for the failure of the platform.
However in the last week I have watched multiple communities attempt a quick migration away from Discord over a fear of something that may never actually come to fruition. It seems like a number of folks are jumping over to a service called Guilded, but largely it suffers from some of the same questions we have had for awhile. Like this has been the topic of many discussions among the AggroChat crew trying to glean exactly how Discord or a service like Guilded actually makes their money. Sure Discord has Nitro and Server boosts, but that cannot pay for anything close to the amount of server processing power, bandwidth and disk space required to keep a service like theirs up and running. Guilded similarly plans on offering premium access accounts and skins but likewise that cannot come close to paying the infrastructure bills.
In 1973 the artists Richard Serra and Carlota Fay Schoolman produced a short video titled “Television Delivers People” which from what I can tell is the initiation point of the old adage “You’re Not the Customer; You’re the Product”. I mean we have seen that written a number of different ways over the years but the words largely speak true. Any time you are not paying for a product, there is something that you are adding to the process that is valuable and are essentially creating the product that is sold. That product could be usage statistics or in the case of television access to your eyeballs and by reference your wallet and spending habits. So I have long tried to sort out what exactly is Discord or Guilded for that matter selling about us that makes it worth keeping a service up and running.
In the case of Microsoft reportedly looking at spending 10 Billion dollars to Acquire Discord, that transaction makes a lot of sense. Discord does a really good job of providing a free alternative to Teamspeak or Ventrilo and also does a pretty solid job of letting folks roll their own communities on the fly. While I love Teams… there are without a doubt some aspects of it that could be improved through an infusion of tech resources coming from a company who has likely been trying to keep things running on a relatively slim tech stack. Additionally Xbox Live chat sucks horrifically and if you could simply gut it and plug discord in its place… you would have an immediate fix to what feels like a sub par implementation that has not aged well. Similarly Skype is not a great user experience and could likely be refreshed greatly with an infusion of newer technology as well.
So this one acquisition for Microsoft serves to solve three potential problems in their aging infrastructure. Those products all make money for the company and it is pretty clear how the benefit works in each of those scenarios. Truthfully I would feel better about using Discord if I better understood its funding model and also knew that the folks working for the company would benefit from the stability of a massive corporation backing them. I’ve known several folks that worked at Microsoft over the years and from what I have been able to glean it seems like a relatively good place to work. It seems like they invest quite a bit of resources in their employees so I can’t see that it would be a bad call for anyone specifically looking to be acquired. While Mixer is a glaring exception, they do tend to support tech significantly longer than someone like Google that has a large graveyard of promising tech that they have buried.
Essentially to the gamers freaking out about this potentially happening… I would say to chill the fuck out. Microsoft has done some pretty cool things. Xbox Game Pass for example is quite possibly the best value in gaming right now and is extremely pro-consumer. Similarly they have done a pretty great job as the steward of Minecraft with significant development effort poured into that product and still maintaining both the more open ended Java client and the more locked down and regulated C# based Bedrock client. Again I get that a lot of this reaction is over Mixer, but that product was never going to claw away significant market share from Twitch no matter how many big name celebrities they convinced monetarily to switch platforms. The streaming market is too stratified and it will take a major paradigm shift for anything to beat team purple.
The evidence I see in front of me though, would tell me that Discord who is already a market leader in the services they provide would be just fine under the umbrella of Microsoft. Chances are the funding would allow them to grow and expand product offerings and maybe just maybe utilize some of the streaming tech. I can see a future where the Xbox client is replaced by a modified version of Discord that offers all of the same functionality. It seems like a pretty good future to me honestly.
Let’s hope Microsoft has changed for the better over the years, but they have historically had a serious cultural “not invented here” problem internally which limits their ability to actually achieve true success with any acquisitions. They’ve never integrated companies well. Ever.
Historically and culturally, they have no problem spending lots of money to be present in a space without any intention or preconceived notions that their offering would ever be more that a market placeholder. Role file footage of Zune or Mixer or Teams or Minecraft for that matter. Mediocrates is their chief of strategic development.
I can’t count the number of companies I’ve know or worked with (most that you’ve never heard of) with compelling products or technologies that went to Redmond to die. Those that didn’t die, suffered the fate of Skype– neglected, balkanized and smashed into the phenomenally terrible UX that is provides today, inexorably attempting to forcefeed the user everything Microsoft. Everything engineered and nothing designed. Its unfathomable how an otherwise mature, robust, proven telecommunications product like Skype managed to completely avoid any kind of success during the pandemic which could have been Skype’s to own. Why don’t they own Zoom?
I don’t expect Armageddon with Discord, just the usual degradation of the user experience with invasive advertising, monetization of every aspect and most annoyingly, the likely forcefeeding of supposedly synergistic products (and the corollary– non-integration/cross compatibility with competing products). Everyone will stay until they don’t which will require someone else to develop and popularize the next iteration of a ubiquitous connectivity tool with low barriers to entry.
Honestly, the only downside I see is the reverse of their issue with Mixer, which couldn’t compete with Twitch. As you mentioned, they already have Skype and Teams. They are trying to corner the teleconferencing market the way Twitch has streaming. In many ways, this fits with their position as a business-market oriented conglomerate (cf. Windows, Office, etc.), while meshing with their desire to appeal to gamers (cf. Xbox, etc.). We’ll see how this shakes out, but I feel like we as consumers don’t always calculate what we lose when Big Business makes something easier or more convenient.