I love Discord, it is a great way to connect with new people and be involved in the fandoms I enjoy. But, how does Discord make money if it is a free app that anyone can use?
Discord makes money by charging users for the Nitro premium subscription, selling games through verified servers, and offering users paid server boosts for extra benefits.
As a gamer who uses Discord (I may even be distracting myself with it now), I am interested to learn about their business model, how they make money, and if they are profitable. So, read on to find out more about how Discord gets the green paper they need to run their business.
Business Model of Discord
Discord is a free-to-use communication platform originally designed for gamers to communicate with their friends. As of 2019, it is accessible to everyone from hiking clubs to college groups.
Users communicate on platforms called servers that are only accessible through invites or by sharing the server link. They can message each other, participate in voice calls, and stream from within servers.
As a private company, Discord keeps itself free through financial support from investors and fundraising initiatives. These investors include Fidelity Management and Accel Partners among at least 30 others.
The team behind Discord created their own tried and true business model that does not rely on ad revenue or profiting off of user data (how crazy is that?). This makes it stand out from most modern apps on the market. Discord runs off a “freemium” business model where the app is free to use but payment is required to access advanced features.
Discord brands itself as a fun place for everyone to chat (I agree with this sentiment!) When I’m not hanging out with my gaming buddies, I’m chatting up the latest Owl House, Arcane, or other fandom news across multiple servers.
The bright and appealing color scheme the app uses is a huge selling point, as is the variety of settings you can use to customize your user and server experience. Discord is marketed through word of mouth, and I found out about it because one of my friends wanted me to join their server (spoiler alert: I’m still on that server today!)
According to the Discord website, there are 150 million active users every month (insert mindblown sound effect here!). So, the expenses to run the app are likely astronomical and include the cost of keeping the servers running and paying their staff.
Luckily, Discord has some neat ways of turning a profit while making sure they have enough money to keep the app running. More on that coming up in the next section!
How Does Discord Make Money?
Discord, the popular voice, and text communication platform uses a freemium business model. This means that the app is free, but users have to pay extra to access premium features.
This can make it frustrating for people who don’t want to spend extra money on cool stuff (like me because I like to be frugal).
Discord makes money in three ways. First, it sells a subscription service called Nitro. Second, it charges gamers to boost the levels of their servers. Third, it takes a cut of sales from games sold through its platform.
Ooh so multifaceted! Love the multiple revenue streams.
Discord Nitro is an optional premium subscription service. Users can pay either $9.99 a month or $99.99 a year to access it. They use the revenue gained from subscribers to continue improving the user experience.
With Nitro, users get all of these perks
- Better emoji – the ability to create custom emoji for your server and use animated emojis (does this mean I can make my face an emoji?)
- More options to personalize your profile – express yourself with animated avatars and gain the ability to make a custom Discord tag (ByeFelicia#2015 anyone?)
- Server Boosts – server boosts help servers function better, and as a Nitro user you get 2 free ones and 30% off extra ones you need (To infinity and beyond!)
- Multiple Avatars – have a different avatar is each server you are in (Avatars for every mood!)
- Special Stickers – access both custom stickers and over 300 other stickers exclusive to Nitro members (No sticking to the status quo here!)
- More Backgrounds – choose your own backgrounds for video calls (you can visit outer space or a serene forest!)
- Brag to Your Friends – show off your Nitro status with a special badge (Who’s the MVP now?)
- Bigger Uploads – the size limit for uploads on Discord is usually 8 MB, but with Nitro, the size limit is increased to 100 MB (I can feel the power!)
- HD Video Streaming – better connection and higher quality mean more time with the crew!
- Longer messages – the character limit is increased from 2000 to 4000 characters (More space for those intense fandom debates)
- Access to More Servers – the personal server limit of 100 is increased to 200 (yay more friends to meet!)
There is also another version of Nitro, called Nitro Classic. It includes all the features listed above except server boosting. Nitro Classic costs $4.99 a month or $49.99 per year (sounds tempting…).
Server boosting is another way that Discord generates profit. It is essentially a system where you can unlock different perks for a server of your choice to share with all the members. I have not been server boosted before, but it definitely sounds fun and exciting.
Server boosts work in a leveling system. Each boost costs $4.99. When you reach a certain number of them on your server of choice, you get access to cool bonuses.
There are currently three levels of server boosting. Each level unlocks more advanced perks than the last.
To reach level 1, a server needs 2 boosts. With the two free ones that come from Nitro, you can reach this goal easily.
Level 1 server boosting comes with these benefits:
- 50 extra server emoji slots (up to 100 unique emojis can now be added)
- Improved 180 Kbps sound quality (now blasting those tunes will sound even better)
- Stream quality improved to 720p and 60 fps (movie night just got 1000x better!)
- Custom server invite backgrounds (invite your friends in style)
- Animated server icons (show your friends how you really feel)
- 15 custom sticker slots (who doesn’t love stickers?)
- 3-day archive option for threads (so much power!)
To reach level 2, a server needs 7 boosts> In this level, you get to keep everything from level 1 and add the following benefits
- 50 more emoji slots (so you can now have up to 150 unique emojis)
- 256 Kbps sound quality (pump up the jams!)
- Stream quality improved to 1080p and 60 fps (everything in the highest quality)
- Custom server banner (express yourself and your group!)
- 50 MB media upload for all server members (yay for more meme sharing!)
- 15 more custom sticker slots (woohoo more stickers!)
- 1-week archive option for threads (for clearing out the drama…or starting fresh)
- The option to make private threads (what happens in the thread, stays in the thread)
Level three is the final level of server boosting, and it requires 14 boosts to access.
When your server reaches it, you will have access to all of the previous benefits from levels 1 and 2, as well as the following:
- 100 more emoji slots (so you can have 250 unique ones)
- 384 Kbps audio quality (for the ultimate jam sessions)
- 100 MB file upload limit for all users on the server (share your entire DnD campaign)
- Vanity URL (ooh fancy)
- 30 more custom sticker slots (who doesn’t love stickers?)
A vanity URL is a custom URL that server owners and members can use to invite others to their server. (I would put ILoveUnicorns in mine!).
All in all, the benefits of Nitro and server boosting seem worth the price. I would consider participating to give myself and my server buddies a better Discord experience and help Discord grow.
Selling Games Through Verified Servers
Note: As of December 1st, 2021 Discord no longer allows PC game developers to buy a license to sell their games through the platform. This feature will be completely phased out on March 1st, 2022.
Before Discord discontinued this feature, game developers could sell their games on the app by following a three-step process:
- Onboarding – create and manage a team, create a new application to sell the game that is compatible with Discord, pay the $25 developer fee, and gain access to the developer portal which gives access to the tools needed to sell and market a game on Discord
- Beta Development – manage and test the application through the developer portal, gain a developer application license, use the license to connect the application through a server of choice, and wait for seller approval
- Commerce Approval – check game submission guidelines, get the game ready, wait for Discord’s approval for distribution, once approved continue developing a game with feedback from fans, and sell when complete
I think this feature should have been around longer. New and indie developers can get great publicity and support for their games through Discord because of their massive user base.
The Discord website indicates the functionality was discontinued because they want to focus on other features and improving the user experience.
Discord Funding, Valuation, and Revenue
Let’s look at the numbers for Discord since was more established as a company in 2016. Seeing the growth of a company tells me a lot about its impact. User demand for the product also shows through numbers.
Discord made huge strides since its small beginnings:
|Year||Valuation||Funding||Revenue||Number of Registered Users|
|2021||$15 billion||$500 million||$200 million||350 million (150 million monthly active)|
|2020||$7.3 billion||$473.9 million||$130 million||300 million|
|2019||$5 million||$300 million||$45 million||250 million|
|2018||$2 billion||$280 million||$30 million||130 million|
|2017||$1.6 billion||$80 million||$10 million||45 million|
|2016||$1 billion||$20 million||$5 million||11 million|
Since Discord is a private company, finding reports on its financials is difficult. The data in this table represents the best estimates from trusted news media and data collection websites.
However, the data does indicate that Discord has no intentions of halting its growth. The company decided to make the switch from gaming to being a place where all groups of people can chat.
This move proved effective because the number of registered users increased by 50 million from 2019 to 2020. In March 2020, the COVID-19 pandemic ravaged the world and left us all inside for months. As a result, people looked for free ways to communicate with their friends from a distance.
Discord became one of the communication apps of choice and continues its streak of success since becoming accessible to everyone. Every company should think of how they can increase their user base and make a profit at the same time.
Is Discord Profitable?
Discord, the popular voice and text chat app for gamers, reported $130 million in revenue in 2020 but the company is not profitable yet. The company has been focusing on monetizing its platform by selling upgrades to its users as it continues to grow rapidly.
Discord as a company cites that they are not profitable since most of its growth comes from word-of-mouth exposure. They hope to raise profits by marketing to college students and the school-age generation. Also, Discord counts on loyal users’ support through their purchase of Nitro subscriptions.
I was not expecting this. I guess just because a company appears well on the outside, doesn’t mean they doing well profit-wise. Internal struggles with revenue-generating options may be a catalyst to Discord’s current profitability.
However, subscription-based models attract investors. So, they could be making enough from their investor partnerships to stay afloat. Their investors allow them to continue branching out and exploring ideas for new content.
Discord has no plans to go public as a company. Nor are they tempted to be bought out by some of the world’s biggest names.
This shows the company’s self-belief in its brand and the loyalty of the user base. Not every company has a team that fully believes in its objectives and collective strength.
Conclusion: How Does Discord Make Money?
Discord is a platform that has recently grown in popularity. It is a place where people can come together and talk about their favorite games. It is like a forum, but it is very different from the forums you would see on the internet
We hope this article has given you a better idea of how Discord generates revenue, who its target audience is, and why it has chosen to pursue a freemium business model. We also hope you’ve gained some insight into the broader gaming industry and its potential for growth.
Whether you are a potential investor or an entrepreneur, this information should aid you in your decision-making. The company clearly has a very distinct business model and is fairly unique in the way they do things.