Discord is a free messaging app with hundreds of millions of users that send each other messages, images, and videos and can even support live streams.
Taking this into account, Discord’s server costs must be massive. On top of this, Discord reportedly has somewhere around 750 employees, which adds up to the company’s monthly and annual costs.
This raises the question: How does Discord make enough money to pay for all this with a free app?
Overall, Discord makes money through a combination of selling paid services such as Nitro and Server Boosts, revenue sharing with content creators from premium memberships, merch sales, partnerships with various companies, and finally investor funding.
That being said, it is entirely possible Discord may not even be interested in making money at all.
As strange as it may seem, the founders of Discord (as a company) might make more money by selling Discord and have others worry about making Discord profitable.
With all that said, here’s a small breakdown of Discord’s revenue streams.
Discord’s primary revenue stream is the Nitro subscription service.
The subscription gives a few useful benefits to its users, although most casual users will be satisfied with the free version.
Discord Server Boosts
Discord servers can be upgraded (or “boosted), from level 1 to level 3, with each level offering a different set of benefits for all the users on the server.
It takes 2 boosts to get a server to level 1, 7 boosts for level 2, and 14 boosts for level 3.
Each boost expires after 1 month, so they must be renewed every month if users and servers want to keep those benefits.
Boosts can be bought separately and cost around $5–6 USD, depending on exchange rates.
However, most servers receive their boosts from Nitro subscribers, since they receive two server boosts per month as part of their subscription.
You can check how many boosts a server has received in total and then do some napkin math to calculate how much revenue it generates for Discord each month.
As an example, below is the Discord server for the video game franchise Battlefield:
It has 97 boosts. If each boost is worth 5 USD, that means it generates almost $500 per month or $6,000 of revenue every year for Discord (if it stays at a constant 100 boosts per month).
Revenue sharing with content creators
Starting in late 2022, influencers and content creators with a Discord following can monetize their audiences through Server Subscriptions.
These subscriptions offer the buyer a set of benefits on that server (the server owner decides the benefits).
This feature is super useful for content creators, especially since Discord gives 90% of the revenue back to creators and keeps just 10%.
By comparison, Twitch has a 50/50 revenue split, while YouTube shares about 55% of the revenue with creators.
Another revenue source for Discord is its merchandise store at https://discordmerch.com/ .
Since its founding in 2015, Discord has attracted close to 1 billion dollars in investor money.
This huge amount of money has insured that Discord has plenty of resources to keep the service running without having to force users into paying for essential features or introducing ads to the messaging service.
Partnerships with various companies
In 2021, Sony and Discord announced an integration partnership between the messaging service and Sony’s PlayStation social features.
The announcement does not mention any transfers of money, but it is very likely that Sony, as the richer partner, likely paid some undisclosed sums of money to Discord to have the privilege of integrating hundreds of millions of users into the PlayStation Network.
Discord has entered into other such integration partnerships, although none as big as the Sony integration. If Discord receives money from every such integration, it becomes easy to see how it can become a reliable revenue source.
Discord doesn’t want to make money
A more unusual explanation regarding Discord’s finances is that the company simply doesn’t want to make money.
The reasoning behind this is that the company’s leadership and investors want to sell the company in the future, which would be much easier to do if Discord had a lower valuation.
The last time they raised funds, Discord was valued at $15 billion. Because of this huge price tag, only a few companies are wealthy enough to afford buying out Discord in one go.
If Discord were able to successfully monetize its audience, then its valuation would go up significantly and make it too expensive to purchase even for the big tech giants such as Google, Apple, or Microsoft.
On paper, that should be a good thing since the higher a company’s valuation, the richer its shareholders become.
The problem in this case is that both founders and investors are forced to stick around with the company so they can maximize its valuation, whereas a buyout allows them the freedom to leave the company fabulously wealthy.
Another explanation is that Discord’s leadership and investors simply don’t know how to make money from the messaging service without pushing away its userbase.
If they are not careful, it’s possible they could alienate the user base and cause it to shrink, which in turn would decrease the company’s valuation.
As such, it’s possible Discord’s leadership and investors want to sell the company and have the buyer take on the risk of making money from the platform.
Overall, Discord has multiple revenue streams, but by all estimates, they do not produce as much revenue as its hundreds of millions of users would suggest.
It’s very likely that in the future, Discord will impose more heavy handed monetization methods, the same way as Twitter, Facebook, and Snapchat.
If these monetization methods are properly implemented, then the end user probably won’t notice much of a difference.
However, if Discord isn’t careful, it’s possible the current days will be remembered as the “golden years” of Discord.
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