How Does Discord Make Money? – The Discord Business Model

Have you ever wondered How does Discord make money? Well, You’re not one of the only people when you search up discord on google. There are several top results of people searching “How does discord make money?”.

In this article, I will be telling you that How discord does make its money? The main thing that we want to mention before we get into this article is the fact that Discord does not run advertisements on their site as you probably already know. You do not find advertisements of any sort on discord webpage because they do not do advertising at all. There’s no blanket advertising or anything like that and discord doesn’t seem to be planning to do that in the future as well.

Alongside, A lot of people wonder whether discord quote-unquote sells your data now. This could have actually come out on Twitter previously with a screenshot. Discord told that they do not sell your data and if you go through their policies as well It does seem to support this idea discord does not sell your user data. It goes against the ethics of the company and it’s something that they don’t want to do so discord does not make money off of you. They have several business streams which We will know about in this article. Before moving to the main topic, First We will discuss “What is Discord?“.

What is Discord?

Discord is one such app that was created by the gamers, for the gamers to solve problems. It’s an easy-to-use free communications app similar to apps like skype or slack. They’re aimed mainly at gamers with a lot more features. Discord lets friends chat with each other one to one or as a group via a server. It provides user-friendly Text, Voice, Screen Sharing, and Video chat Services through public or private servers that can be set up pretty quickly.

Discord started as a gamer’s chat app and became quite famous for it but Its users started finding non-gaming ways of using this platform which inspired discord to make some changes. Then, Covid 19 happened and This time Discord makes some changes for its users.

The Covid Pandemic forced everybody to social distance and communicate via chatting platforms so because of its users and the pandemic, Discord thought about growing beyond its only for gamer’s image. It wants to be seen as a general-purpose chat app for everyone with non-gaming needs and wants to go mainstream all over the world just like zoom.

You won’t believe that it’s being used for anything and everything that you can think of from Large Corporate Meetings to Job Recruitment from Live Karaoke Nights to Virtual Wedding Parties. The possibilities are pretty endless that’s why they have changed the branding and introduced a new tagline that specifically says it’s your place to talk.

In short, Discord is projecting itself as the future of platforms where you can chat with friends, learn something online or just share ideas even if you’re not into gaming.

History Of Discord

With so many free methods of communication today, such as Facebook, Instagram, Skype, Snapchat, Twitter, and Whatsapp, it’s surprising to see another form of social media rise in popularity. But 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 dollar mark?

Here’s how it happened, Discord is a communication website that 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, Citron’s first venture into business was with OpenFeint. OpenFeint is a social gaming platform for mobile games used on the iPhone and Android platforms that offered things like leaderboards, virtual currencies, and achievements all stored on the cloud. OpenFeint was sold to Japanese mobile gaming company GREE for 104 million dollars in 2011.

Citron then used this money to set up the game development studio, that was Hammer and Chisel in 2012. Hammer and Chisel’s first game was called Fates Forever which was a tablet-focused game centered around 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 YouWeb 9Plus’ incubator, Discord was created and launched.

In 2016, the firm then received an additional 20 million dollars in funding for its software, including investment from Warner Media, and then in December 2018, the company announced 150 million dollars in funding led by Green Oaks Capital. This fundraising round valued the firm at 2 billion dollars which according to the website.

How Discord makes money?

As we know, Discord is free to use. It allows users to sign up in a rapid space. It makes money from the Subscription fees, on the product like games, and server boosting.

Nitro Subscriptions

So the first one, We are gonna be getting into is the main one that is Nitro Subscriptions. Discord makes money through Discord Nitro. Now. For the people that don’t actively know what Discord Nitro is?

It is a premium subscription package. You can either get nitro classic which is the basic nitro for $4.99 a month or $99.99 a year and You can also get discord nitro regular which is the more expensive version for $9.99 a month or $99 a month. This is a product that is very similar to Netflix’s model. It has a quote-unquote frictionless experience and pricing flexibility.

You can test the Nitro for free for the first 30 days and you can cancel it whenever you want. This is one of the discord’s key business models and has been going on since the early stage of 2017.

`Premium features include:

  • A personal profile that includes an animated avatar and some custom tags
  • Creating your custom emojis
  • You will get two server boosters and a discount of 30 percent 
  • Permission to upload files of up to 100MB (free limit is only 6MB)
  • High-quality videos, screen sharing, and Discord Go live streaming

It’s something which a lot of you probably already know. However, It is not the only way that discord makes its money.

Server Boosts

Discord also makes this money through things such as Server Boosting. Server Boosting is something that allows the functionality of the service to increase where you unlock special features. as seen here.

However, there are Level 1, Level 2, and Level 3 and people can boost your server to allow your server to unlock more perks. A server boost can cost money. You do get it included with nitro regular. However, You can buy an extra boost.

So, If you go for the booster server option, You can see that there is an option for the year where it’s $34.99 a year. However, A basic server boost does cost $4.99 a month if you do not have nitro and if you have Nitro, then it will cost $3.49 a month.

Discord Stickers

Discords used to make money by something which has only been introduced since around October 2020. It is something that is very very new to discord and that is Discord Stickers.

Discord Stickers

Discord Stickers go for about $3 per pack if you do not have a nitro or $2 per pack if you do have nitro. So, there is a discount if you do have nitro and that would be pretty cool and it will see something like this in the future which is awesome.

Discord’s Merchandise Store

Discord Merch

Discord makes their money is through their merchandise store which is a previous entity that discords used where they used to sell discord merchandise. This has only recently just been reintroduced around the time for the holiday period of 2020.

They currently have two collections on the show which is the purple and dark theme collection. The snow’s giving collection is pretty hard to get hold of considering the prices are extortionately high so people do not buy it. However, there are several things which you can buy where the average range is from $15 to $90 and it’s something where discord do make their money from.

Game Distribution

Discord launched a game store competing against companies such as steam in 2018. Nitro subscribers were able to access discord exclusive games examples like Dead Cells and Mafia were discord nitro games. The store phased out quite early after launch with only lasting about a year. Developers can now sell their games directly on their servers and this could do about a 90 to 10 split in terms of revenue which means that the developer will get 90% of the revenue whereas the discord company will get 10% of the revenue. There also has been a developer’s license but at the moment the applications have paused that cost $25 as a one-time payment. It allows developers to get access to features that would allow them to develop their server alongside their game to be ready for a release.

Discord’s Twitch

Another way through Discord makes money is through their twitch. They have some subscribers on their twitch account who pay a certain amount per year.

If you do know how twitch subscriptions work but It’s very similar to Youtube memberships or stuff like that and very similar to Nitro Subscription where you can pay a certain amount a month to unlock certain features on that twitch channel for that specific person and The creator will get a certain amount of money from that where’s twitch take a split too. Discord does make money through their subscriptions on here. This is another way where discord could potentially or still do make money.

Partnership with Xbox/Microsoft

Another way where Discord most likely does make money is their partnership with Xbox and Microsoft over the years. Discord has made many partnerships with Xbox which may have led to Money / Profit.

They have done two specific partnerships which happen in 2018 and one that has happened since 2020 around the summertime, especially in August. This is for example where people that have discord nitro could get three months of Xbox game pass for PC. For people that had the game-pass could get three months of discord nitro for free as well. So, It’s almost an exchange of some sort. This probably led to some form of business deal in the back end but we do not know the exact specifics of the monetary side of it at all.

Discord’s Investors and Funding

The final specific thing is the fact that discord has made money through investors and funding. Discord is specifically a startup company where has made money through several entrepreneurs and companies and organizations giving money and investing in the company to allow it to develop.

Discord has raised about 379 million dollars in investments with 10 funding grounds, 7 lead investors, and 18 total investors. Companies and organizations that have invested include Tencent, Benchmark, Index Ventures, Greenoaks Capital, and some other ones.

The idea is that the majority of this money has been put towards the development of the application in the early stages. Then, It sent into international growth of the platform across the world improving nitro and its features and that sort of thing and putting some money towards rewarding its employees.

Discord Valuation

Discord is worth about 7 billion US dollars according to Forbes. This represents a 100 percent increase from the $3.5 billion valuations that Discord was able to amass in July 2020 and that is a crazy amount. it’s amazing to see how discord has come over the last couple of years.

Conclusion

The whole point of this article was to tell you the fact that Discord does not want to sell your user data. They make money through other ways such as nitro investment and funding and things related to their products such as Nitro and Merchandise. They do not sell user data nor do they want to run advertisements according to things.

Additional FAQs

Q1. How do Discord groups make money?

Ans → There are various ways to Make Money from Your Discord Server such as – Make a bot with free and paid features, Make the entire server for paid members only, Create private areas for Patreon supporters only and much more.

Q2. Do streamers make money from Discord?

Ans → Yes, There are many ways by which streamers make money from Discord such as – Content creators utilize Discord as a perk for those who donate through Patreon.

Q3. What is the business model of Discord ?

Ans → Discord uses basics of the freemium model where the basic services of Discord are free for users, while premium features is accessed through paying additional charges.

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