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I'm bearish on Discord. Unlike Slack, it targets a price-averse demographic and is attempting to enter spaces that are very saturated (Steam, Origin, Epic, Ubis

by dvt 8y ago

I'm bearish on Discord. Unlike Slack, it targets a price-averse demographic and is attempting to enter spaces that are very saturated (Steam, Origin, Epic, Ubisoft are already crushing the digital distribution medium), so then it's basically an IRC replacement for gamers. I understand Slack's valuation as it targets huge companies with up to decades-long contracts and has projected revenues > $1B for this year, but I just don't see Discord making money the same way. I use it daily with my friends, but none of us have Nitro (although the features are pretty neat). The only way I see it moving to profitability is doing targeted ads (which will significantly hinder user experience). I see it going the way of Xfire[1]. [1] https://en.wikipedia.org/wiki/Xfire https://en.wikipedia.org/wiki/Xfire

Pfhreak 8y ago
Discord, however, is a bit of a lifestyle brand like Twitch. It's where conversations happen, and it's incredibly useful to the gaming community. If they can get even a toehold with their subscription services and store, I think they have a very serious chance of turning towards something valuable.
- dvt 8y ago
  Discord is as valuable to the gaming community as IRC was, or as Ventrilo was, or as Skype was (for a while). In other words, not very (as all those tools were easily replaced). Twitch built a marketplace of creators and consumers (like YouTube) -- that's why it's hard to replace. Discord, on the other hand, is a chat program.
  - Pfhreak 8y ago
    I disagree. It's more connected to communities than IRC/Vent/Skype. Right now I hang out in multiple alpha dev game discords, speedrunning discords, a personal game friends discord, a queer gaming discord, and a tabletop game development discord. The degree to which I'm connected to communities is much stronger than in something like IRC or Vent.
    - orliesaurus 8y ago
      I had 30+ TeamSpeak servers in my browse list, I would easily be in 2 or 3 at each one time, but voice would only work in one at a time!
      - gsich 8y ago
        Thank god.
        orliesaurus 8y ago
        yes agreed
  - notheguyouthink 8y ago
    I disagree (to a degree). Everyone i know kicked and screamed about switching from Vent/Teamspeak/Mumble. I feel like it eventually dominated not because it was easy to dump existing solutions, but because existing solutions were poorly designed by comparison. No mobile, horrid chat, required install, poor voip quality. Discord came along with a better offering and it still was a tough switch. With that said, i agree that no one "cares" about Discord. If a better thing comes along i could easily see people dumping it. But, i imagine it'll be a bit more difficult. Discord "won" in my view because it simply had to be modern to be vastly superior. However, i'm unsure how easy someone can make a next version that is such a superior leap. Fwiw, as a gaming voip/chat i still find it a pretty great UX. My only complaint is that it is a bit laggy due to the, i assume, web-based interface on "desktop".
    - dvt 8y ago
      > Discord "won" in my view because it simply had to be modern to be vastly superior. Discord "won" because it's literally burning cash and offering a service for free (for example, I don't have to pay for a t2.micro instance to host a Mumble server). But this is obviously not sustainable. If you're selling a dollar for fifty cents, it's not hard to find a market.
      - Dylan16807 8y ago
        Relaying some text is cheap. If I had to pay 3x the actual server cost to run one (so the rest can go toward development and staff), it would still be minuscule. My friend circles on discord have enough people with nitro that it's almost certainly cash-positive by a lot.
        btown 8y ago
        Yep; it’s important to note that the signaling required to coordinate P2P voice and video is no more expensive than “relaying some text” with modern protocols. The question is whether Discord can remain sufficiently innovative to be ahead of the next thing that tries to disrupt its model. I think it is sufficiently irreverent, and sufficiently independent from B2B stability needs, to be that innovative.
  - PSZD 8y ago
    All of those were a pain in the ass for one reason or another, Discord caught on like wildfire because it was a huge step up from what existed. Pretty much a combination of the best parts of IRC + Teamspeak + Skype. You don't think Discord has any lockin? For a lot of games, coordinating voice chat these days is "paste a discord server invite in chat". Pretty much any guild/clan/subreddit/group/whatever has a Discord (apart from ones with really old TS servers etc), so if you're in one of those, you probably have Discord. Much easier than negotiating Skype/Mumble/TS3. I'd say Valve/Steam is feeling a lot more pressure these days than Discord. I'm not sure Discord will ever be a hugely valuable company, but judging by the fact that every launcher in existence (Steam, Battle.net) is trying to clone their features, I'm sure they can at least sell it for quite a bit. I was really expecting them to push out of the gaming niche, but with the store it looks like they're doubling down on that angle.
dewiz 8y ago
I think you’re underestimating the market and features Discord could bring to gaming companies, eg identity management, cross games challenges, and more
cflewis 8y ago
I think Discord is a clear buy for someone like Microsoft. It gives them a big leg up, and doesn't really compete with Skype in the demographics.
- dvt 8y ago
  Completely agree. Skype was the gamer go-to for a while, in fact.
  - stevehawk 8y ago
    as a gamer I have to ask "when was that?"
    - dvt 8y ago
      At the end of MoP and during WoD, everyone was all of a sudden using Skype for everything in WoW (raiding, PvP, dungeons, etc.). I remember it vividly because it was so annoying.
    - Klonoar 8y ago
      As a gamer, I'd have to agree with him - we used Skype up until the Xbox Live (360) era. Different portions of gamers exist, and all that.
      - ryanlol 8y ago
        So for like 2 years from 2003 to 2005?
    - freehunter 8y ago
      When I played CS:Source in a clan, we had Teamspeak that we rented a server for. When I played WoW and Guild Wars with a small group of friends, we used Skype because it was free. Early-to-mid 2000s.
      - lostmsu 8y ago
hbosch 8y ago
Have you tried having group voice chats over IRC? This is where discord shines.
- deleted 8y ago
  [deleted]
bobbygoodlatte 8y ago
I'm not so sure gamers are a price-averse demographic
- hnauz 8y ago
  They are, that's why Fortnite took a massive dump on PUBG
  - starshadowx2 8y ago
    PUBG is still massively popular with the demographic it is made for. Fortnite is popular because it pulled in a new demographic of young kids, new gamers, and was easy to get into. Just because Fortnight is more popular overall doesn't make PUBG a failure or that it "lost".
    - orliesaurus 8y ago
      Yeah PUBG has 400k players on steam, down from 1.5M at peak. Not bad at all considering nowadays most games last a year or two at most before they decline quickly...except the evergreen ones like Counterstrike and League/Dota
  - 15155 8y ago
    Fortnite is substantially better software. Way smoother, way better game. Free is just the icing on the cake.
  - callalex 8y ago
    Well, that and the fact that two years after the game released it can only run on the most premium hardware because they never paid down their tech debt.
- gruez 8y ago
  Do you think that because most have $2k+ of gaming gear + regularly drop $120 each game? I'd say that they spend money on the aforementioned things because there's no cheap alternative. They dumped all their money into hardware + games (unavoidable costs) so they can't afford to spend money elsewhere.
discorded 8y ago
Discord is already considered uncool among a pretty influential crowd of users, people are sick of how laggy it is compared to other services and it is now a product no one asked for with the new store. The fact it is also a gigantic datamining operation also is not going over so well.
- starshadowx2 8y ago
  I'm a pretty big discord user, early supporter/nitro/hypesquad and all that, and I have never heard of this "influential crowd" calling it uncool. All I've seen is servers getting larger and more servers popping up. Discord themselves just ran a Snowsgiving server which raised 100k for charity in under a week and had ~10k people in it at any time I checked chatting. I don't have any lag on any devices nor do I hear of anyone else having that issue. The store was maybe not asked for but it's continuously getting better. With the latest announcement it's even more exciting. I'd like to hear about how you think it's a datamining operation as well. The only times I've heard that are from when a lot of alt-right and neonazi servers/users were banned and started an astroturfing campaign.
  - arkitaip 8y ago
    I agree. It is the de facto app for chatting amongst gamers, especially streamers. Just check out streamers on Twitch: even the tiniest ones have a Discord server.
    - starshadowx2 8y ago
      The biggest thing is that while it's focused to and originally for gamers that's not the only thing it's used for. There's a server for anything now. Subreddits have Discords, I've been in the typology/psychology Discords a lot. Discord themselves even has a page promoting it for open-source projects. - https://discordapp.com/open-source https://discordapp.com/open-source
      - arkitaip 8y ago
keerthiko 8y ago
> it targets a price-averse demographic and is attempting to enter spaces that are very saturated This is accurately the current state of affairs, but these are presented like conclusions you make on an industry that's a half century old at least. Gaming was a tiny niche not 15 years ago. It's entered the mainstream less than 10 years ago. It surpassed the film industry not 2 years ago in revenue. Pirated games almost had more volume than official sales in the 90s. All these things have changed, and are still changing. The games and games-adjacent industry is changing at a blinding speed. Maybe it'll turn into a steaming junkpile like the mobile app market. But maybe it won't. Kids are growing up with games normalized. Everyone is digital, and games are on anything digital. Incumbents that don't keep up will definitely dwindle in their influence. Big players trying to break into the industry have failed to understand the changes. Everyone said similar things when Twitch had a $2B acquisition by Amazon. I think it was underpriced, they are doing incredibly well. Price-averse? There are people literally throwing (digital) money at streamers just for fun, or to troll them, or to get their message announced on stream, or any number of random antics a streamer sets up. But really only in the last year. A rapidly changing industry is all about timing, and Xfire was sadly too soon, internet multiplayer gaming was not the mainstream and internet/tech infrastructure for it was not as mature either. No-one can tell these things in the present, but I think now is as good a time as any for Discord to do well. I think the industry and market, if not Discord itself (which has good execution for a fertile market), is still being seriously underestimated.
- pdpi 8y ago
  > Price-averse? There are people literally throwing (digital) money at streamers just for fun, or to troll them, or to get their message announced on stream, or any number of random antics a streamer sets up. The magic of twitch (and league of legends, and a few more) is that this is indeed a very price-sensitive crowd, but one that is willing to engage in a steady stream of frequent capex-style microtransactions while refusing to touch opex/subscription-based models.
  - keerthiko 8y ago
    Most of these people also have $5/mo (or 'prime subs' that are free with amazon prime) subscriptions to one or more content creators in the community. I don't even have netflix or spotify or any subscription service, but I find it worth my $5/month to support the one streamer I enjoy tuning in to whenever I want some background entertainment while doing things around the house, and I think that's not an uncommon usecase.
baybal2 8y ago
There is a much, much easier explanation for the obscene valuation: > The round was led by Greenoaks Capital with participation from Firstmark, ___Tencent___, IVP, Index Ventures and Technology Opportunity Partners. All and every big Chinese company seeks to exfiltrate cash out of the country no mater what the justification is. That way you have China Rail buying Canadian casinos, tech companies buying American pig farms, and a farming cooperative buying Dutch semiconductor fab equipment maker. I will not be surprised that Tencent will dump them upon first opportunity. I am almost certain that all other players on board the deal are there just to provide the justification and legal cover for otherwise nonsensical deal.
- jjeaff 8y ago
  Why would all those other firms make poor investments just to prop up a deal for tencent?
  - elefanten 8y ago
    Yeah this is written by someone with no knowledge of the industry. Tencent has been making strategic investments in top western gaming businesses for years. This is completely consistent with their investments in, for example, Riot and Epic. None of those have been dumped.
    - baybal2 8y ago
      But they got ton of cash out of China, right?
  - baybal2 8y ago
    They may sense that Tencent is there for pump and dump, or they may be simply in share.
shanghaiaway 8y ago
I'd be more bearish on the stores of Origin, Epic, Ubisoft. Building a user base has to be done bottom up. Companies in general cannot do that because their approach is a forced top down one, pushed by marketing and sales. I think it's fair to believe that Discord can be one of two stores together with Steam. Other publishers are likely to fail.
- dvt 8y ago
  > Building a user base has to be done bottom up. Stores have nothing to do with "user bases." You just want people to buy stuff. As a publisher, you have all the leverage when it comes to pricing arbitrage. You can sell game X on your platform for $45 and sell the same license to Discord for $50. The consumer doesn't care where they buy it from, as long as it's cheaper. Obviously, they're incentivized to buy it on your platform. I'm not saying that platform size doesn't matter, but funneling resources for a win there would be a Pyrrhic victory. Steam won that battle a long time ago.
  - nightski 8y ago
    Sort of. I agree with you that Origin, UPlay and the like have a huge advantage because they actually publish games. But popular storefronts like Steam do have a clause that if you sell it on Steam you can't sell it for cheaper elsewhere. Obviously a new storefront like Discord may not have that kind of power. But who knows.
    - amaranth 8y ago
      > if you sell it on Steam you can't sell it for cheaper elsewhere My understanding is the actual rule is a bit narrower than that. You can't sell _Steam keys_ cheaper elsehwere. If you sell it as a non-Steam game they don't have any input on it.
    - gsich 8y ago
      Yet this happens all the time. So I'm not sure if Steam has such a clause.
  - 8y ago
btilly 8y ago
As an alternate view, what's to stop Discord from adding integrations down the road and competing head on head with Slack? It strikes me that it is easier for Discord to move into Slack's space than vice versa.
SL61 8y ago
I'm gonna have to disagree with you there. Gamers today are not price-averse like they might have been when the gaming demographic was mostly teens. After a peek at your website, I see I'm quite a bit younger than you. I know a lot of people who do not have much money, but they still consider it worth it to spend a chunk of their limited income on Discord Nitro. In some servers I've even seen young teens (13-14) spending their allowance money on it. It would be interesting, based on your anecdote, if most Nitro subscribers are young users. It might be due to the custom emotes, which are probably more desirable to younger users than older ones. On top of that, Discord has become the main social media platform for some people. I can't imagine using it that way myself, but I know a lot of people who are in a massive number of servers and spend much of their day on it. It's not just gaming voice chat for them, it's an entire social network. These people, who also tend to be quite young, almost always have Nitro, because it's worth paying $5-10/month for their main online platform. Maybe the main area of concern for Discord should be whether these young users keep their subscriptions as they age.
- Wowfunhappy 8y ago
  It's all relative. Gamers are a heck of a lot more price averse than corporations, and the same person is more likely to spend money on a service that helps his/her business than one used for video games.
  - scoggs 8y ago
    Well to me the question is: How many too-young-to-work online gamers are there who have parents willing to pay for their subscriptions / games / in-game purchases? We already know that these kids who don't have enough (or any of their own) money have a computer, internet access, and the ability to purchase all of the peripherals and a game needed to play. What's making companies stop and say, "We don't think the people who made these non-working kids positioned to be our customers (e.g. they have the minimum hardware needed to play their game / products) will spend any more money on them."? Are there more kids whose parents buy them computers and allow them to play games than there are corporations / businesses? Do all corporations / businesses and products made for corp/bus only allow for micro-transactions or are their products a monthly/yearly subscription fee (fixed rate) or is it a one time purchase? Are we expecting future generations to stop buying computers and games for their children? Are we expecting children to stop being born or stop growing old enough to be able to use our products? It's a demographic that's got infinite potential and every year there is a new set of customers. And, if you get on any single customer's good side they can become loyal, paying customers when they reach an age where they are no longer price-averse.
dmix 8y ago
Interestingly Benchmark Capital backed Xfirem hired Xfire's founder, and is a top investor in Discord...
trevyn 8y ago
I feel like if Discord had a default white theme and took out the gaming-specific references, it could easily be a better choice for business comms than Slack.
- callalex 8y ago
  They would also have to completely overhaul their permissions system, as it is extremely complicated and ACL based, whereas slack has much easier to grasp concepts of private channels and public channels, which is fine in the business world.
Aeolun 8y ago
The thing is, aside from it’s store, which is just a month old or so, everything about Discord is better than Steam. I would happily pay for it, but so far it hasn’t been necessary.
SpaceManNabs 8y ago
On steam, most people don't want to use the in-game friends client even though it looks a lot like discord in style (when you get to the chat rooms). Not sure why that is, but Steam Chat most definitely lost to discord.
KenanSulayman 8y ago
We’re started using Discord for remote employees and now use it for the whole engineering team. I can very much see discord introduce more business specific features and directly compete with slack.
clofresh 8y ago
Many game developers use Discord to organize beta tests, gauge feedback, share announcements and manage and measure their community following in general. The fans feel good for being included in the process and the devs feel good knowing roughly how many people they can expect to buy their games at launch time. I hope they figure out a good way to monetize this, since I see it as their killer app.
pmarreck 8y ago
Nitro user here. Not long ago they gave me access to a huge amount of their new game library just for being a Nitro user. And they're competing with Steam by offering a better deal to publishers... which is a good thing. And of course, their voice chat is top-notch. Bias: They're also powered by Elixir, my current favorite language.
beams_of_light 8y ago
I strongly believe Discord would be a better alternative to Slack in the workplace. Drop in/out voice channels combined with chat would be fantastic for geographically disparate teams.

by dvt 8y ago

Pfhreak 8y ago

Discord, however, is a bit of a lifestyle brand like Twitch. It's where conversations happen, and it's incredibly useful to the gaming community. If they can get even a toehold with their subscription services and store, I think they have a very serious chance of turning towards something valuable.

dvt 8y ago
Discord is as valuable to the gaming community as IRC was, or as Ventrilo was, or as Skype was (for a while). In other words, not very (as all those tools were easily replaced). Twitch built a marketplace of creators and consumers (like YouTube) -- that's why it's hard to replace. Discord, on the other hand, is a chat program.
- Pfhreak 8y ago
  I disagree. It's more connected to communities than IRC/Vent/Skype. Right now I hang out in multiple alpha dev game discords, speedrunning discords, a personal game friends discord, a queer gaming discord, and a tabletop game development discord. The degree to which I'm connected to communities is much stronger than in something like IRC or Vent.
  - orliesaurus 8y ago
    I had 30+ TeamSpeak servers in my browse list, I would easily be in 2 or 3 at each one time, but voice would only work in one at a time!
    - gsich 8y ago
      Thank god.
      - orliesaurus 8y ago
        yes agreed
- notheguyouthink 8y ago
  I disagree (to a degree). Everyone i know kicked and screamed about switching from Vent/Teamspeak/Mumble. I feel like it eventually dominated not because it was easy to dump existing solutions, but because existing solutions were poorly designed by comparison. No mobile, horrid chat, required install, poor voip quality. Discord came along with a better offering and it still was a tough switch. With that said, i agree that no one "cares" about Discord. If a better thing comes along i could easily see people dumping it. But, i imagine it'll be a bit more difficult. Discord "won" in my view because it simply had to be modern to be vastly superior. However, i'm unsure how easy someone can make a next version that is such a superior leap. Fwiw, as a gaming voip/chat i still find it a pretty great UX. My only complaint is that it is a bit laggy due to the, i assume, web-based interface on "desktop".
  - dvt 8y ago
    > Discord "won" in my view because it simply had to be modern to be vastly superior. Discord "won" because it's literally burning cash and offering a service for free (for example, I don't have to pay for a t2.micro instance to host a Mumble server). But this is obviously not sustainable. If you're selling a dollar for fifty cents, it's not hard to find a market.
    - Dylan16807 8y ago
      Relaying some text is cheap. If I had to pay 3x the actual server cost to run one (so the rest can go toward development and staff), it would still be minuscule. My friend circles on discord have enough people with nitro that it's almost certainly cash-positive by a lot.
      - btown 8y ago
        Yep; it’s important to note that the signaling required to coordinate P2P voice and video is no more expensive than “relaying some text” with modern protocols. The question is whether Discord can remain sufficiently innovative to be ahead of the next thing that tries to disrupt its model. I think it is sufficiently irreverent, and sufficiently independent from B2B stability needs, to be that innovative.
- PSZD 8y ago
  All of those were a pain in the ass for one reason or another, Discord caught on like wildfire because it was a huge step up from what existed. Pretty much a combination of the best parts of IRC + Teamspeak + Skype. You don't think Discord has any lockin? For a lot of games, coordinating voice chat these days is "paste a discord server invite in chat". Pretty much any guild/clan/subreddit/group/whatever has a Discord (apart from ones with really old TS servers etc), so if you're in one of those, you probably have Discord. Much easier than negotiating Skype/Mumble/TS3. I'd say Valve/Steam is feeling a lot more pressure these days than Discord. I'm not sure Discord will ever be a hugely valuable company, but judging by the fact that every launcher in existence (Steam, Battle.net) is trying to clone their features, I'm sure they can at least sell it for quite a bit. I was really expecting them to push out of the gaming niche, but with the store it looks like they're doubling down on that angle.

dewiz 8y ago

I think you’re underestimating the market and features Discord could bring to gaming companies, eg identity management, cross games challenges, and more

cflewis 8y ago

I think Discord is a clear buy for someone like Microsoft. It gives them a big leg up, and doesn't really compete with Skype in the demographics.

dvt 8y ago
Completely agree. Skype was the gamer go-to for a while, in fact.
- stevehawk 8y ago
  as a gamer I have to ask "when was that?"
  - dvt 8y ago
    At the end of MoP and during WoD, everyone was all of a sudden using Skype for everything in WoW (raiding, PvP, dungeons, etc.). I remember it vividly because it was so annoying.
  - Klonoar 8y ago
    As a gamer, I'd have to agree with him - we used Skype up until the Xbox Live (360) era. Different portions of gamers exist, and all that.
    - ryanlol 8y ago
      So for like 2 years from 2003 to 2005?
  - freehunter 8y ago
    When I played CS:Source in a clan, we had Teamspeak that we rented a server for. When I played WoW and Guild Wars with a small group of friends, we used Skype because it was free. Early-to-mid 2000s.
    - lostmsu 8y ago

hbosch 8y ago

Have you tried having group voice chats over IRC? This is where discord shines.

deleted 8y ago
[deleted]

bobbygoodlatte 8y ago

I'm not so sure gamers are a price-averse demographic

hnauz 8y ago
They are, that's why Fortnite took a massive dump on PUBG
- starshadowx2 8y ago
  PUBG is still massively popular with the demographic it is made for. Fortnite is popular because it pulled in a new demographic of young kids, new gamers, and was easy to get into. Just because Fortnight is more popular overall doesn't make PUBG a failure or that it "lost".
  - orliesaurus 8y ago
    Yeah PUBG has 400k players on steam, down from 1.5M at peak. Not bad at all considering nowadays most games last a year or two at most before they decline quickly...except the evergreen ones like Counterstrike and League/Dota
- 15155 8y ago
  Fortnite is substantially better software. Way smoother, way better game. Free is just the icing on the cake.
- callalex 8y ago
  Well, that and the fact that two years after the game released it can only run on the most premium hardware because they never paid down their tech debt.
gruez 8y ago
Do you think that because most have $2k+ of gaming gear + regularly drop $120 each game? I'd say that they spend money on the aforementioned things because there's no cheap alternative. They dumped all their money into hardware + games (unavoidable costs) so they can't afford to spend money elsewhere.

discorded 8y ago

Discord is already considered uncool among a pretty influential crowd of users, people are sick of how laggy it is compared to other services and it is now a product no one asked for with the new store. The fact it is also a gigantic datamining operation also is not going over so well.

starshadowx2 8y ago
I'm a pretty big discord user, early supporter/nitro/hypesquad and all that, and I have never heard of this "influential crowd" calling it uncool. All I've seen is servers getting larger and more servers popping up. Discord themselves just ran a Snowsgiving server which raised 100k for charity in under a week and had ~10k people in it at any time I checked chatting. I don't have any lag on any devices nor do I hear of anyone else having that issue. The store was maybe not asked for but it's continuously getting better. With the latest announcement it's even more exciting. I'd like to hear about how you think it's a datamining operation as well. The only times I've heard that are from when a lot of alt-right and neonazi servers/users were banned and started an astroturfing campaign.
- arkitaip 8y ago
  I agree. It is the de facto app for chatting amongst gamers, especially streamers. Just check out streamers on Twitch: even the tiniest ones have a Discord server.
  - starshadowx2 8y ago
    The biggest thing is that while it's focused to and originally for gamers that's not the only thing it's used for. There's a server for anything now. Subreddits have Discords, I've been in the typology/psychology Discords a lot. Discord themselves even has a page promoting it for open-source projects. - https://discordapp.com/open-source https://discordapp.com/open-source
    - arkitaip 8y ago

keerthiko 8y ago

> it targets a price-averse demographic and is attempting to enter spaces that are very saturated This is accurately the current state of affairs, but these are presented like conclusions you make on an industry that's a half century old at least. Gaming was a tiny niche not 15 years ago. It's entered the mainstream less than 10 years ago. It surpassed the film industry not 2 years ago in revenue. Pirated games almost had more volume than official sales in the 90s. All these things have changed, and are still changing. The games and games-adjacent industry is changing at a blinding speed. Maybe it'll turn into a steaming junkpile like the mobile app market. But maybe it won't. Kids are growing up with games normalized. Everyone is digital, and games are on anything digital. Incumbents that don't keep up will definitely dwindle in their influence. Big players trying to break into the industry have failed to understand the changes. Everyone said similar things when Twitch had a $2B acquisition by Amazon. I think it was underpriced, they are doing incredibly well. Price-averse? There are people literally throwing (digital) money at streamers just for fun, or to troll them, or to get their message announced on stream, or any number of random antics a streamer sets up. But really only in the last year. A rapidly changing industry is all about timing, and Xfire was sadly too soon, internet multiplayer gaming was not the mainstream and internet/tech infrastructure for it was not as mature either. No-one can tell these things in the present, but I think now is as good a time as any for Discord to do well. I think the industry and market, if not Discord itself (which has good execution for a fertile market), is still being seriously underestimated.

pdpi 8y ago
> Price-averse? There are people literally throwing (digital) money at streamers just for fun, or to troll them, or to get their message announced on stream, or any number of random antics a streamer sets up. The magic of twitch (and league of legends, and a few more) is that this is indeed a very price-sensitive crowd, but one that is willing to engage in a steady stream of frequent capex-style microtransactions while refusing to touch opex/subscription-based models.
- keerthiko 8y ago
  Most of these people also have $5/mo (or 'prime subs' that are free with amazon prime) subscriptions to one or more content creators in the community. I don't even have netflix or spotify or any subscription service, but I find it worth my $5/month to support the one streamer I enjoy tuning in to whenever I want some background entertainment while doing things around the house, and I think that's not an uncommon usecase.

baybal2 8y ago

There is a much, much easier explanation for the obscene valuation: > The round was led by Greenoaks Capital with participation from Firstmark, ___Tencent___, IVP, Index Ventures and Technology Opportunity Partners. All and every big Chinese company seeks to exfiltrate cash out of the country no mater what the justification is. That way you have China Rail buying Canadian casinos, tech companies buying American pig farms, and a farming cooperative buying Dutch semiconductor fab equipment maker. I will not be surprised that Tencent will dump them upon first opportunity. I am almost certain that all other players on board the deal are there just to provide the justification and legal cover for otherwise nonsensical deal.

jjeaff 8y ago
Why would all those other firms make poor investments just to prop up a deal for tencent?
- elefanten 8y ago
  Yeah this is written by someone with no knowledge of the industry. Tencent has been making strategic investments in top western gaming businesses for years. This is completely consistent with their investments in, for example, Riot and Epic. None of those have been dumped.
  - baybal2 8y ago
    But they got ton of cash out of China, right?
- baybal2 8y ago
  They may sense that Tencent is there for pump and dump, or they may be simply in share.

shanghaiaway 8y ago

I'd be more bearish on the stores of Origin, Epic, Ubisoft. Building a user base has to be done bottom up. Companies in general cannot do that because their approach is a forced top down one, pushed by marketing and sales. I think it's fair to believe that Discord can be one of two stores together with Steam. Other publishers are likely to fail.

dvt 8y ago
> Building a user base has to be done bottom up. Stores have nothing to do with "user bases." You just want people to buy stuff. As a publisher, you have all the leverage when it comes to pricing arbitrage. You can sell game X on your platform for $45 and sell the same license to Discord for $50. The consumer doesn't care where they buy it from, as long as it's cheaper. Obviously, they're incentivized to buy it on your platform. I'm not saying that platform size doesn't matter, but funneling resources for a win there would be a Pyrrhic victory. Steam won that battle a long time ago.
- nightski 8y ago
  Sort of. I agree with you that Origin, UPlay and the like have a huge advantage because they actually publish games. But popular storefronts like Steam do have a clause that if you sell it on Steam you can't sell it for cheaper elsewhere. Obviously a new storefront like Discord may not have that kind of power. But who knows.
  - amaranth 8y ago
    > if you sell it on Steam you can't sell it for cheaper elsewhere My understanding is the actual rule is a bit narrower than that. You can't sell _Steam keys_ cheaper elsehwere. If you sell it as a non-Steam game they don't have any input on it.
  - gsich 8y ago
    Yet this happens all the time. So I'm not sure if Steam has such a clause.
- 8y ago

btilly 8y ago

As an alternate view, what's to stop Discord from adding integrations down the road and competing head on head with Slack? It strikes me that it is easier for Discord to move into Slack's space than vice versa.

SL61 8y ago

I'm gonna have to disagree with you there. Gamers today are not price-averse like they might have been when the gaming demographic was mostly teens. After a peek at your website, I see I'm quite a bit younger than you. I know a lot of people who do not have much money, but they still consider it worth it to spend a chunk of their limited income on Discord Nitro. In some servers I've even seen young teens (13-14) spending their allowance money on it. It would be interesting, based on your anecdote, if most Nitro subscribers are young users. It might be due to the custom emotes, which are probably more desirable to younger users than older ones. On top of that, Discord has become the main social media platform for some people. I can't imagine using it that way myself, but I know a lot of people who are in a massive number of servers and spend much of their day on it. It's not just gaming voice chat for them, it's an entire social network. These people, who also tend to be quite young, almost always have Nitro, because it's worth paying $5-10/month for their main online platform. Maybe the main area of concern for Discord should be whether these young users keep their subscriptions as they age.

Wowfunhappy 8y ago
It's all relative. Gamers are a heck of a lot more price averse than corporations, and the same person is more likely to spend money on a service that helps his/her business than one used for video games.
- scoggs 8y ago
  Well to me the question is: How many too-young-to-work online gamers are there who have parents willing to pay for their subscriptions / games / in-game purchases? We already know that these kids who don't have enough (or any of their own) money have a computer, internet access, and the ability to purchase all of the peripherals and a game needed to play. What's making companies stop and say, "We don't think the people who made these non-working kids positioned to be our customers (e.g. they have the minimum hardware needed to play their game / products) will spend any more money on them."? Are there more kids whose parents buy them computers and allow them to play games than there are corporations / businesses? Do all corporations / businesses and products made for corp/bus only allow for micro-transactions or are their products a monthly/yearly subscription fee (fixed rate) or is it a one time purchase? Are we expecting future generations to stop buying computers and games for their children? Are we expecting children to stop being born or stop growing old enough to be able to use our products? It's a demographic that's got infinite potential and every year there is a new set of customers. And, if you get on any single customer's good side they can become loyal, paying customers when they reach an age where they are no longer price-averse.

dmix 8y ago

Interestingly Benchmark Capital backed Xfirem hired Xfire's founder, and is a top investor in Discord...

trevyn 8y ago

I feel like if Discord had a default white theme and took out the gaming-specific references, it could easily be a better choice for business comms than Slack.

callalex 8y ago
They would also have to completely overhaul their permissions system, as it is extremely complicated and ACL based, whereas slack has much easier to grasp concepts of private channels and public channels, which is fine in the business world.

Aeolun 8y ago

The thing is, aside from it’s store, which is just a month old or so, everything about Discord is better than Steam. I would happily pay for it, but so far it hasn’t been necessary.

SpaceManNabs 8y ago

On steam, most people don't want to use the in-game friends client even though it looks a lot like discord in style (when you get to the chat rooms). Not sure why that is, but Steam Chat most definitely lost to discord.

KenanSulayman 8y ago

We’re started using Discord for remote employees and now use it for the whole engineering team. I can very much see discord introduce more business specific features and directly compete with slack.

clofresh 8y ago

Many game developers use Discord to organize beta tests, gauge feedback, share announcements and manage and measure their community following in general. The fans feel good for being included in the process and the devs feel good knowing roughly how many people they can expect to buy their games at launch time. I hope they figure out a good way to monetize this, since I see it as their killer app.

pmarreck 8y ago

Nitro user here. Not long ago they gave me access to a huge amount of their new game library just for being a Nitro user. And they're competing with Steam by offering a better deal to publishers... which is a good thing. And of course, their voice chat is top-notch. Bias: They're also powered by Elixir, my current favorite language.

beams_of_light 8y ago

I strongly believe Discord would be a better alternative to Slack in the workplace. Drop in/out voice channels combined with chat would be fantastic for geographically disparate teams.