For the countless people utilizing Discord’s free services, the question remains: how does Discord make money? Through a freemium model, Discord monetizes with premium offerings and integrations that cater to its diverse community. This article unpacks the layers of Discord’s revenue streams without spoiling the finer details found later on.
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Key Takeaways
Discord has evolved into a versatile communication platform for gamers and non-gamers, offering high-quality voice, text, and video communication, server creation, and extensive customization options.
Discord employs a freemium model, earning substantial revenue from premium features via Nitro subscriptions and server boosting, alongside direct game sales and integrations with services like Patreon and Twitch.
The platform is maintaining user privacy and combating abuse through a blend of volunteer moderators, AI-powered bots, and dedicated trust & safety teams, while also expanding into non-gaming communities and exploring new revenue streams.
Discord’s Core Offerings
When Discord launched, it positioned itself as a one-stop solution for gamers’ communication needs. Over the years, it has evolved into a versatile communication platform, offering comprehensive services such as voice, text, and video communication that cater to both gaming and non-gaming communities. With its focus on providing secure and seamless communication across various channels, it’s no surprise that Discord quickly pivoted into a platform loved by over 140 million users worldwide.
Discord’s offerings are not limited to communication alone. It empowers users to:
Craft and tweak servers according to their preferences
Set up interest-specific channels
Designate roles for management and representation
Access a plethora of customization options
The Discord app has positioned itself as a prime platform for nurturing communities.
Discord Total User Count
| Year | Monthly Active Users (MAUs) | Registered Users |
|---|---|---|
| 2019 | 56 Million | 250 Million |
| 2020 | 100 Million | 300 Million |
| 2021 | 140 Million | 400 Million |
| 2022 | 175 Million | 450 Million |
| 2023 | 196.2 Million | 563 Million |
Voice, Text, and Video Communication
Whether you’re strategizing for a game or conducting a book club meeting, Discord offers the following features for real-time communication:
High-quality individual and group voice calls
Rich text messaging, including direct messaging, group chats, and channel communications
Features such as rich media sharing and message pinning
Video calls and voice chat are another feather in Discord’s cap, allowing users to share their webcam feeds and screens. This feature supports collaborative sessions, live demonstrations, and even interactive experiences like games and video watching.
Server Creation and Customization
Discord servers, the heart of the platform, are communities housing several channels for discussions. Users can create and join up to 100 servers, each customizable with unique icons, custom emojis, and designated roles. These permanent or temporary servers cater to various interests and needs.
Server boosting, also known as server boosts, is a premium feature that enhances a Discord server’s functionality and appearance, offering perks such as additional emoji slots, higher audio quality, and custom server visuals at various boost levels.
Discord’s Freemium Model
Adopting a freemium discord business model, Discord provides fundamental services at no cost while charging for enhanced features. This approach has been profitable for Discord, fetching its primary revenue from sources such as premium subscriptions, game sales, and server boosting.
The platform’s premium subscription, Discord Nitro, offers users advantages like:
Faster upload times
Larger upload limits
HD video chat
More extensive customization options for avatars and emojis
Users can avail of Nitro subscriptions at flexible monthly or yearly rates, with the ability to cancel any time.
Discords Total Revenue
| Year | Revenue |
|---|---|
| 2019 | $45 Million |
| 2020 | $130 Million |
| 2021 | $310 Million |
| 2022 | $445 Million |
| 2023 | $937.6 Million |
Nitro Subscriptions
Discord’s premium service, known as Nitro, comes in several pricing tiers. Nitro subscribers enjoy perks like:
Custom emojis
Increased upload limits
Superior audio quality
Options like HD streaming
The Nitro subscriptions significantly contribute to Discord’s revenue, forming a key part of its monetization strategy.
| Year | Nitro Sales Revenue |
|---|---|
| 2019 | $73 Million |
| 2020 | $120 Million |
| 2021 | $173 Million |
| 2022 | $208 Million |
| 2023 | $207 Million |
Server Boosting
Server Boosting, introduced in 2019, allows users to enhance a Discord server with special perks based on the boost level. Perks of server boosting include improved server functionality, performance enhancements such as better audio quality and live streaming.
Server boosting has become a lucrative source of revenue for Discord, as the service is monetized through direct in-app purchases of boost subscriptions.
Partnerships and Game Distribution
Discord smartly monetizes by partnering with game developers for exclusive game sales on their platform. Discord launched a storefront in beta that allows users to purchase PC titles directly, with a standard 70/30 revenue split favoring developers. To attract developers, Discord has allocated $5 million for funding developers and early-stage startups, with plans to expand its gaming stores.
Discord also integrates with third-party platforms like Patreon and Twitch. Patreon creators can integrate their accounts with Discord to provide exclusive server or channel access to their patrons, creating a value-added benefit. Twitch streamers can enhance their community’s sense of exclusivity by using Discord integrations to provide special roles and access to private channels for their subscribers.
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Exclusive Game Sales
Through the ‘First on Discord’ initiative, Discord sells games exclusively on their platform. Titles such as ‘Last Year: The Nightmare,’ ‘Sinner: Sacrifice for Redemption,’ and ‘Minion Masters’ were part of the initial wave.
Integration with Third-Party Platforms
Integration with third-party platforms like Patreon and Twitch provides added value to Discord users. Patreon’s Connected Apps settings and Discord’s role synchronization feature ensure that supporters are assigned the correct roles automatically according to their patronage or subscription level.
Additional Revenue Streams
Discord’s revenue sources, also known as discord’s revenue streams, extend beyond subscriptions and game sales. The platform also profits from selling virtual event tickets, in-app purchases like stickers and emojis, and merchandise. The platform has plans to implement Premium App Subscriptions, allowing developers to offer premium features of their apps and monetize directly on the platform.
Funding developers and startups enables Discord to draw a broader spectrum of creative content, thereby diversifying its monetization avenues beyond gaming. The introduction of Activities on Discord allows developers and studios to create interactive experiences, opening up new monetization opportunities.
Virtual Event Tickets
One of the innovative ways Discord makes money is by selling tickets for virtual events directly within the platform. Users can purchase these tickets for virtual events, streamlining the buying experience.
In-app Purchases and Merchandise
In-app purchases on Discord, introduced in October 2020, including animated avatars, stickers, and emojis, serve as another source of revenue for the company.
The company also has a merchandise store with a variety of products catering to the gaming industry, such as clothing, gaming goods, collectibles, keyboards, and other accessories.
Overcoming Challenges: Content Moderation and Privacy
Balancing moderation with privacy is a challenging task for any platform, and Discord is no exception. Discord addresses content moderation and privacy concerns using a combination of:
Volunteer moderators
AI-powered bots
Transparency reports
Dedicated trust & safety teams
To safeguard user privacy, Discord has implemented security features like data encryption and two-factor authentication to bolster its defenses against unauthorized access. Discord confronts direct threats to user security, including various forms of online fraud and user harassment.
Volunteer Moderators and AI-powered Bots
Volunteer moderators in Discord communities are responsible for enforcing server rules and responding to community inquiries. AI-powered moderation bots like AutoMod can interpret server rules set by admins and automatically enforce moderation based on message context and intent.
Transparency Reports and Trust & Safety Teams
Transparency reports and trust & safety teams are part of Discord’s strategy to ensure user privacy and security. Teams dedicated to child safety and engineering aid in content moderation, and Discord actively collaborates with industry peers, civil society, and law enforcement to combat online child sexual exploitation and abuse.
Tools like PhotoDNA are utilized to identify and remove known child sexual abuse material (CSAM).
Competition in the Communication Landscape
Even with its distinctive offerings and market standing, Discord competes with platforms like Slack, Telegram, Element, Microsoft Teams, and Clubhouse in the communication landscape. In the gaming-focused niche, it competes with platforms like Steam Chat and TeamSpeak that offer similar communication services.
However, Discord’s adaptability shines through its Stage Channels feature, which competes directly with Clubhouse’s format, proving Discord’s resilience against features popularized by other platforms.
Gaming-focused Competitors
In the gaming sector, Valve updated its Steam Chat service with the introduction of mobile apps on iOS and Android to compete more directly with Discord.
Enterprise and General Communication Competitors
Enterprise and general communication competitors like Teamspeak and Slack focus on advanced security and integration capabilities, providing tools for communication that may surpass what Discord offers. Microsoft Teams, for example, distinguishes itself with substantial cloud storage, meeting recording, and 24/7 phone and web assistance in its paid offerings.
The Future of Discord: Growth and Expansion
Looking to the future, promising growth and expansion prospects await Discord. The platform’s successful efforts to attract non-gaming communities have repositioned Discord as a diverse communication tool, with nearly 80% of users engaged in non-gaming activities.
New revenue opportunities are emerging for Discord, including:
potential paid server plans
partnering with non-gaming brands for product sales
expansion of the Nitro Package
a revised revenue-sharing model in its gaming stores.
With a strategy centered on continual innovation and new projects to sustain growth and engage users, Discord projects a positive trajectory for its future.
New Revenue Opportunities
Discord is venturing into new revenue avenues, such as selling virtual tickets for live events managed by server moderators. They are also contemplating adding more services and features to the Nitro packages to attract additional subscribers and increase revenue.
Non-Gaming Community Expansion
Discord’s expansion into non-gaming communities is a testament to its versatility. Discord servers are being created around topics such as:
TV shows
geographical regions
sports
memes
dating
investing
Users who lack a real-life community for their interests are turning to Discord to create and join servers that cater to those interests.
Summary
From its initial focus on gamers to its evolution into a comprehensive communication platform, Discord has adeptly navigated the communication landscape, offering a robust suite of services. Through its freemium model, partnerships, and innovative revenue streams, Discord continues to thrive amidst competition. As it scales to cater to non-gaming communities, the future of Discord appears promising, with room for growth and expansion that extends beyond its current scope.
Frequently Asked Questions
Is Discord actually profitable?
Yes, Discord is profitable as it hit $937M in revenue by the end of 2023, with significant growth and a large user base.
How come Discord is free?
Discord is free because it operates on a freemium model, generating revenue from premium subscriptions, game sales, membership fees, and server boosting.
How does Discord make money?
Discord makes money from premium subscriptions, game sales, server boosting, virtual event tickets, in-app purchases, and merchandise sales. These revenue streams contribute to its income.
How does Discord handle content moderation and privacy concerns?
Discord utilizes volunteer moderators, AI-powered bots, transparency reports, and trust & safety teams to handle content moderation and privacy concerns, ensuring a comprehensive approach to addressing these issues.
Who are Discord’s main competitors?
Discord’s main competitors include platforms like Steam Chat, TeamSpeak, Slack, Telegram, Element, Microsoft Teams, and Clubhouse in the gaming and broader communication landscapes.
