Discord, the gaming-centric social media platform known for its ad-free experience, has announced its plan to introduce advertisements. With a user base exceeding 200 million monthly active users, the platform aims to incorporate paid promotions from video game developers. According to the Wall Street Journal, these promotions are designed to engage users by offering rewards for completing in-game tasks, with the condition that at least one friend is watching the activity on Discord. The initiative marks a significant shift from Discord’s long-standing policy since its inception in May 2015.
Strategic Implications and User Experience
The advertisements are set to appear in the bottom left corner of the user interface, targeting users based on their gameplay, age, and location. Discord’s senior vice president of product, Peter Sellis, says that the platform intends to enhance its revenue streams through these targeted advertisements. While The Wall Street Journal reports that users have the option to disable ads, it remains unclear whether this feature is available to all users or exclusively to subscribers. The move to introduce ads comes as Discord seeks to diversify its revenue sources and potentially prepare for an initial public offering (IPO).
Financial Outlook and Future Prospects
Currently, Discord boasts sales figures around $600 million and is contemplating an IPO as a future milestone. The company is also a major partner of Microsoft, especially on Xbox where the two platforms integrate. Discord’s decision to embrace advertising and explore public listing follows its rejection of a $10 billion acquisition offer from Microsoft in 2021, opting instead to remain independent. Despite recent workforce reductions, amounting to 17% of its employees, Discord is positioned by InvestorPlace.com as one of the most anticipated IPOs of 2024, described as a “cash cow in the making.”
This strategic pivot to incorporate advertisements and in-game rewards signifies Discord’s commitment to evolving its business model while maintaining its core user base’s engagement. As the platform prepares for this new chapter, the gaming community and investors alike are keenly watching Discord’s next moves in the tech market.
Last Updated on November 7, 2024 9:18 pm CET
