Discord launching rewards for playing online games

Discord, the instant messaging app favoured by video gamers, is launching a product that offers rewards for online play, part of an effort to generate a profit at the company this year.

Quests, as the product is called, let Discord users try out new games with friends and win stuff, CEO Jason Citron said in an interview.

Video game companies, including some big names, will pay Discord to offer rewards tied to their games.

“Our ambition is that every game will offer quests on Discord,” Citron said.

Originally a voice and text chat app for gamers to discuss their strategies, Discord exploded in popularity during the pandemic.

It now has over 200 million monthly active users, according to Citron. Revenue has quadrupled since 2020 to over $600 million on an annualised basis, according to people with knowledge of the matter.

“At some point, we’d probably go public,” Citron said.

The growth reflects the fact that people are increasingly turning to private chat rooms rather than public posts, Citron said.

While social media apps are extremely popular, there is a big trend toward group chats and closed, invite-only spaces, he said.

Discord makes money primarily by selling $3 to $10 monthly subscriptions to its Nitro service, which offers users the ability to share bigger files, stream high-definition video and place custom emojis in their chats.

The company is expanding its digital shop, where users can customise their Discord profiles with paid banners or effects.

Previous new offerings have had less success.

Discord shut down its game store in 2019. A product that allows people who create servers, or chat rooms, on the site to sell their own subscriptions hasn’t been a winner.

“There are some people who enjoy it but it hasn’t become as big a phenomenon as we’ve hoped,” Citron said.

Discord, which rejected a $12 billion bid from Microsoft in 2021, has raised over $1 billion in capital and still has some $700 million in cash.

In January, the company laid off 17% of its employees, or about 170 people, after making cuts last year as well.

In a memo to staff at the time, Citron said the company had grown too quickly. He’s now refocusing the business on its roots.

“Gaming is the largest and fastest-growing form of entertainment in the world,” he said. “As we reflect on what’s been most successful for us as a business, it’s been what’s closest to gaming.”