The gaming-centric voice chat platform Discord has raised USD$150m (£118m) in a round of funding that may position it to rival Valve and Epic’s efforts to dominate video game distribution platforms.
The new round of funding, led by investment group Greenoaks Capital, also includes contributions from Firstmark, Index Ventures, IVP, Technology Opportunity Partners, and Tencent. Discord now courts an impressive USD$2.05bn (£1.6bn) valuation.
It has been widely reported that Discord will use much of the money to bolster its restructured curated online games store. Funds will also be put towards developing the company’s core communications offering, which provides a voice and text chat platform for gamers, and already serves 200 million users.
Presently, the landscape where games are sold digitally via online stores is entering a period of seeming disruption. For over a decade, game developer and publisher Valve has dominated the market with its store Steam. Then Epic – the game studio and dev tools provider behind Fortnite – revealed earlier this month that it was launching a store that provides games makers with a more generous revenue split than that traditionally offered by Steam. Such stores are not only places where games are sold; they also provide a platform for solitary and multiplayer gaming, hubs for player communities, places to distribute development technology, and more besides.
Where Valve had previously offered a 70/30% revenue split in the developers’ favour, Epic is starting out with a 88/12% split. Discord has now gone one better by building its store around a 90/10% revenue split, with a promise it will look to lower its take even more. As 2019 nears, the company is also endeavouring to expand and extend what its store offers.
“Starting in 2019, we are going to extend access to the Discord store and our extremely efficient game patcher by releasing a self-serve game publishing platform”, announced Discord in a blog posted earlier this month. No matter what size, from AAA to single person teams, developers will be able to self publish on the Discord store with 90% revenue share going to the developer. The remaining 10% covers our operating costs; and we’ll explore lowering it by optimising our tech and making things more efficient.”
It is worth noting that Valve recently announced a reshuffle of its long-established revenue spilt model, meaning going forward the more successful a game is on Steam, the less of a cut Valve will take.
The fact that the market for online game distribution platforms is entering a period of change is significant because for so long Steam has dominated. It is an entity where its conventions have influenced the ways games are bought, sold, marketed, played, and even designed, over its 13-year history. Now Epic is looking to expand its remit buoyed up by the success of Fortnite; and Discord appears to be seeking to bolster its revenues via a similar route.
That could mean significant changes across the video game industry ecosystems, should a new model of store come to dominate in a similar way to Steam, demanding new conventions in game distribution, design, and consumption.
The Discord store appears set to run along side the outfit’s Nitro offering, which provides a selection of games via a subscription. It is assumed Discord’s First On initiative will also help build the store’s presence and impact. First On provides games that are only available via Discord for an exclusivity period of around 90 days, making the platform more alluring to many players. It is also not impossible that, as we see more hyper-casual games arrive which are playable within messaging services, Discord will be in an ideal position to link the distribution and consumption of those titles.