What is Discord?
Launched in 2015, Discord is relatively newer compared to other instant messaging and voice over internet protocol (VoIP) platforms that have been around for quite some time like TeamSpeak and Mumble. It’s a free chat app intended by developers to become a hassle-free communication platform between gamers, even while in-game.
Here, you can participate in group chats with other users in communities called “servers”. Aside from joining existing servers, you can also create your own Discord server for your friends. You can set up text and voice channels to communicate with other members of the server.
Aside from those, Discord permits direct chat as well where you can also use text and voice chat services.
Whether you prefer voice chat or chatting in text form, Discord can do all of those flawlessly.
Who uses Discord?
As you probably already know, Discord is initially made for gamers where they could talk even while playing a game. Users create and join Discord servers through an invite link.
A Discord server can either be private or public. Servers that are tagged as public are accessible to anyone with a link and are usually listed in server directories.
Meanwhile, a user can only join a private server via invitation with someone who is already inside the server. Usually, though, members can only invite other Discord users into a private server if permission is granted to them by the owner or administrators.
For years, Discord’s main audience was gamers. However, people start running communities for non-gaming hobbies and interests on the platform. From sports fans, craft enthusiasts, to online study groups, servers dedicated to these niches were sprouting all over the place. YouTubers and podcasters have set up their own servers to connect with their fans and post updates.
When Discord officially shifted its focus from the gaming field to the general public sometime in 2021 during its rebrand, these types of servers and their members are steadily increasing, too.
Why is Discord so Popular?
Many people attribute the popularity of Discord to its ease of use and a relatively more private feel than other popular instant messaging apps. The interface is intuitive and easy to use, yet users can explore and enjoy there are advanced features.
In addition to that, Discord has low latency when it comes to voice calls, so friends and teammates could easily converse without worrying about disruptions. The servers also feature channels, where members can talk to each other in smaller groups, while also having the option to join larger threads at the same time.
Perhaps its best offering though is its core features are 100% free. Yes, you’ve read that right. You can call and chat with anyone for as long as you want on the platform without being charged for it. You can talk to your friends and teammates for an entire day, given that you don’t have an important appointment to do or you didn’t lose your internet connection. And the cream of the crop? The platform has no annoying ads. At all.
Now, without ads supporting as their main source of revenue, it makes one wonder how Discord makes money? In this article, we’re going to dive into how the Discord app makes money in a way that is quite different from other social platforms. Let’s get started.
How Does Discord Make Money?
In this day and age when ads and user data are the main source of revenue for apps and websites, Discord has remained absolutely ad-free. After all, hosting ads is like the go-to, no-brainer way to earn income if you’re running a massive social platform. However, instead of hosting ads to make money, the owners of Discord sought other ways to break even.
The Discord business model is a bit unusual, to say the least. As I’ve said, they don’t rely on ads to make a profit, and it doesn’t seem that they will do so in the future.
Discord generally earn money through these methods:
- Discord Nitro and Nitro Classic
- Discord server boosts
- Discord merchandise store
- Game sales and distribution
Let’s have a look at these methods, one by one.
Discord Nitro and Nitro Classic
Discord is free to use, however, it has a premium subscription offering that lets users who avail them enjoy exclusive perks and features.
Discord launched Discord Nitro Classic at the onset of 2017. It was their first premium subscription offering, which gave users upgraded features, such as the ability to upload animated avatars and increased upload size up to 50MB. Those who use Discord’s free version can only upload files up to 8MB, so there’s a big difference in that aspect alone.
Then, in 2019, Discord introduced “Discord Nitro”, and renamed the former one as “Nitro Classic.” Discord Nitro is an upgraded version of what’s now called “Nitro Classic”. It has all the features Nitro Classic has, plus a few other cool perks such as better video resolution and bigger upload sizes. With Discord Nitro, you can upload files that are as big as 100MB.
Of course, Discord Nitro is quite more expensive than Nitro Classic. Nitro Classic is only $4.99 a month (or $49.99 a year), whereas Discord Nitro (a.k.a. the upgraded version of Nitro) costs $9.99 per month (or $99.99 a year).
Here’s a more detailed breakdown of their respective perks and offerings:
- Exclusive Nitro badge to show people you’ve subscribed to and supports Discord.
- Customized tag. See that number at the end of your username? You can change that from #0001 to #9999 with Discord Nitro and Nitro Classic.
- Animated avatars.
- 30% off server boosts
- The ability to use custom and animated emoji on any server and DMs
- Upload size increased from 8MB to 50MB
- Screenshare upgraded up to 1080p at 30fps or 720p at 60fps
Discord Nitro Classic
- All of the above mentioned perks.
- Upload size increased up to 100MB
- Multiple profiles and avatars across different servers
- Better hi-res videos when you go live or screen share
- Character limit in messages increased from 2000 to 4000. You can now type in a novel if you want. Of course, you can’t but with Discord Nitro you’ll be able to type long messages.
- Double your server cap. You can now join up to 200 servers (from the original 100)
- The ability to use custom stickers on any server and DMs
- In addition to the 30% discount on server boosts, you get two free Discord boosts along with a Discord Nitro subscription
Those are the perks and features you get when subscribing to either Discord Nitro or Discord Nitro Classic. Nitro is one of the main ways Discord gets its income, you will be supporting the developers by subscribing to either one of those plans.
Discord Server Boosting
I talked about server boosts as one of the perks you’ll get by subscribing to Nitro or Nitro classic. But, what in the world are server boosts, anyway?
Server boosting is a way to unlock more features for a server. For example, boosted servers enjoy more emoji slots, the ability to upload a custom banner, and higher video and audio quality.
At a bare minimum, servers still have the functionality to allow members to use the voice and text chat, send emojis and stickers (if they have Nitro), and the other usual stuff.
Server boosts, however, are sort of a way to level up your favorite server and show your support. Furthermore, booster server features can also be enjoyed by everyone in that particular community. You can say that giving boosts kind of makes you a patron to that server.
Admins of that server will usually do something like giving you a special role or mentioning your username as their way of saying thanks for your contribution.
Boosts are also paid monthly, but you can cancel them if, for example, you decide to boost another server after seven days.
Servers can be boosted up to Level 3. You might have now guessed it, but the higher the level is, the more features your community gets to unlock and enjoy.
Here’s a quick breakdown of each level’s requirements and perks:
Requirement: 2 server boosts
- An additional 50 slots for Emojis Slots (100 emojis overall)
- The ability to use a custom server invite background.
- Higher live stream quality. Go Live streams up to 720P 60FPS
- Higher audio quality at 128 Kbps.
- Upload an animated server icon
- 15 custom sticker slots
- The 3-day archive option from the last activity for threads is enabled
Requirement: 7 server boosts
- All of the perks in Level 1, plus:
- An additional 50 slots for Emoji Slots (150 emojis overall)
- The ability to upload a custom server banner
- Even higher live stream quality Go Live streams boosted to 1080P 60FPS
- Even higher audio quality at 256 Kbps
- Members can upload files up to 50MB server-wide
- An additional 15 custom sticker slots, for a total of 30
- The 1-week archive option from the last activity for threads is enabled
- If you had been wondering how to create private threads in your server, being boosted at Level 2 will give you that feature
Requirement: 14 server boosts
- All of the perks in levels 1 and 2, plus:
- A whopping additional 100 slots for emojis (250 emojis overall)
- An EVEN higher audio quality, now at 384Kbps
- An EVEN higher upload limit of up to 100MB for all members in the server
- An additional 30 custom sticker slots, for a total of 60
- Vanity URL. At the highest server boost tier, Discord will allow a server to customize its invite link. Instead of getting a random string of letters and numbers at the end, you can change it to the name of your server.
Discord merchandise store
Apart from Nitro and Server Boosts, another way that Discord earns money is through selling merch. In its merchandise store, Discord offers exclusive hoodies, beanies, shirts, pouches, and bandanas.
The merch store is built and run with the partnership of DOTEXE. DOTEXE is a shopping platform that sells tees, hoodies, and other fashion items intended for gamers.
Besides those, Discord Merch store also sells Wumpus plushies and mechanical keyboards. However, those products are currently sold out.
Game sales and distribution
In 2018, the gaming chat app announced its first-ever game distribution store which was then simply called “Discord Store.” It was set to compete with Valve’s Steam and Epic Games Store. Compared to those other game distribution platforms, Discord has a far more curated list with titles such as Hollow Knight, Into the Breach, and Dead Cells.
Perhaps one of the best things about Discord’s game distribution storefront was its lower distribution fee. This was done so game developers will receive more from the games they created rather than leaving a considerable chunk of their revenue to distribution platforms. Before Discord Store and Epic Games came out, game distribution giant Steam takes a 30% cut. Out of the three, Discord probably offered the lowest fee at around 10% to cover distribution costs.
However, about a year later, the Discord store was shut down. Nitro used to have free games library as one of its features, but that too was shut down later.
Discord turned to self-serve game selling where it allowed game developers to sell PC games on their own server.
However, in the last part of 2021, Discord announced that they will halt the store channel functionality. This means game developers that have a store in their server would not be able to sell their games on there anymore. Store channels was closed down after March 1, 2022.
Discord says on their website that this decision allows them to focus more on developing features, improvements, and game-related experiences that their users will enjoy. The platform now focuses on bringing more features to their app and working on improving the existing ones, such as Nitro and Discord Rich Presence. As of the moment, nobody can say yet if Discord will reintroduce the game store feature, so we’ll keep our fingers crossed.
About Discord Funding
Discord also received funding from its investors over the years since its launch, some of which are already giants in the gaming industry such as Tencent and Sony Entertainment Interactive. Sony was one of the biggest, most recent additions to Discord’s top investors when they joined during the Series H funding round, announced in September 2021.
According to the data published by Crunchbase Discord raised $500 million, with a pre-money valuation at $14.5 billion.
How Much Does Discord Make Annually?
Discord doesn’t disclose its revenue to the public, however, it was reported that it made $130 million in revenue in 2020. They came a long way from earning only around $5 million in 2016, a year after the app was launched. This number doubled in 2017 and continued to increase every year.
Is Discord Public? Who Owns Discord?
The short answer is, no, Discord isn’t public. Well, not yet, at least. Discord has a proprietary license and is owned by a private company named Discord Inc (formerly Hammer & Chisel). Discord was founded by Jason Citron and Stan Vishnevskiy in 2015 as a free voice communication service and instant messaging app originally catering to gamers. Lately, other communities began using it, too.
Over the years, companies have tried to acquire Discord, the most famous one being Microsoft, in which Discord turned down a $12 billion dollar offer. While Discord is still a private company as of the moment, it’s reported they are considering going public.
Citron and Vishnevskiy are the current CEO and CTO of Discord, respectively.
How Much Is Discord Worth?
In 2020, Discord is valued at $7 billion. However, some estimates projected that Discord will reach $15 billion in 2021.
How Does Discord’s Value Rank Compare to Its Competitors?
Discord famously sticks to its rule not to host ads on its platform as a way to make money. Instead, they generally rely on other methods such as member subscriptions and merch.
Now, you might be wondering how Discord’s competitors make money and how much their net worth is currently valued. Here’s our list of the top competitors to Discord and their estimated revenue.
As you might have probably known or guessed, Steam Chat is a free voice and chat messaging platform released by none other than Valve’s Steam. Steam is primarily a game distribution service, but instead of remaining as an online game storefront, it launched a free tool to allow users to chat with their friends on Steam. It’s available on PC and has apps you can download on both Android and iOS, too.
Although there is no exact data on how many people use Steam Chat, the platform itself has 120 million monthly active users. We also cannot say for sure how much is Steam Chat worth and how much does it make. However, it should be worth noting that its parent company, Valve is valued at $10 billion, as of 2019.
Guilded is another popular text and audio chat platform for gamers. In fact, it’s one of Discord’s strongest competitors. While Discord’s communities are called “servers”, Guilded has “guilds”, which is also a cool way to call a community, if you think about it.
There are no exact figures that tell how much Guilded is making annually or how much it’s worth. However, Roblox Corporation acquired the company for $90 million in August 2021.
Element is a free, open-source text and voice chat software that uses Matrix services. It features secure and end-to-end encryption. You can download its web application or download the app on Android or iOS devices.
According to their website, Element primarily earns its revenues through Element Matrix and consulting services. In the Series B round of funding that was announced in 2021, Element has raised $30 million.
What sets Clubhouse apart from the others in this list is that it’s specifically a video chat application that can accommodate thousands of people. It’s a social network available on iOS and Android app stores. It became quite popular with high-profile users, such as those who are in Silicon Valley. Later on, it became available to everyone.
In 2020, Clubhouse’s estimated value is at $100 million and rocketed to $4 billion in 2021. How does it make that much money, you ask? Aside from its rich and elite patrons that donate money to the platform, they also host ads and event tickets.
As far as anyone is concerned, TeamSpeak remains one of the top competitors of Discord. How could it not be? It has already been long-established and popular long before Discord made its appearance in 2015. TeamSpeak is mainly a voice chat application dedicated to gamers.
TeamSpeak earns its revenue from paid servers. Basically, you have to register for a gamer license if you want to run a private server for as low as $55 Annual Renewal Cost.
Microsoft Teams is a communication platform developed by Microsoft itself, and currently has one of the highest daily active users in this list at 145 million. Unlike Discord, though, it’s more focused on businesses and enterprises, so most of its users are companies and organizations.
It’s a bit difficult to ascertain how much money Microsoft Teams make. However, some estimates say that they made $6.8 billion in 2020 after the number of users skyrocketed due to the pandemic.
Slack is another popular communication platform with organizations, businesses, and teams as its primary audience. Voice and text chat are also available.
Slack earns money mainly through its paid plan subscription. Perhaps one of the major advantages of using Slack as a platform to organize your team or community is its huge file storage. The highest tier of Slack’s paid plan offers 1 TB per team member. You can upload and store large files in your Slack space. The file limit for a single upload can go up to 1 GB, compared to Discord’s 8 MB for free users and 50 to 100 MB for Discord Nitro subscription users.
Telegram is mainly an instant messaging app. However, users can create large group chats and communities on the platform. Aside from end-to-end encrypted video calling, what makes Telegram attractive to users is its simplicity, security, and speed.
You may be surprised to know that Telegram doesn’t generate any revenue despite being so popular. It doesn’t host ads and doesn’t sell personal data. The social network’s funding generally comes from its founders Pavel and Nikolai Durov. However, it seems Telegram is planning to release a freemium business model to earn revenue in the future while keeping the core features free.
Perhaps one of the most notable VoIP software for gamers that took off in the 2000s is Ventrilo. Its client and servers are available as freeware. Many gamers who played World of Warcraft and Halo in the 2000s used Ventrilo to communicate with their teammates. Even though a lot of popular VoIP platforms have surfaced in the past several years, there are still those who use this open-source freeware to chat with their teammates in-game.
Ventrilo’s main source of revenue is by renting servers.
Last but not the least, we have Mumble as another VoIP platform and one of Discord’s competitors. Like TeamSpeak and Ventrilo, it’s software intended for gamers to chat with their teammates and friends while playing.
Also an encrypted communications tool, it was released in the mid-2000s, too, when VoIP software for gamers is the most popular method of in-game communication. Even until now, gamers, especially those who play eSports still use tools like Mumble, Ventrilo, and TeamSpeak.
Mumble also allows its users to download the client for free. They can choose to host their own servers or rent one. Rented Mumble servers’ costs vary depending on how many slots can your server host. For example, a server that can host up to 400 users will have to pay $130 a month, but you can get a discount if you opt for a yearly plan.