I'm bearish on Discord. Unlike Slack, it targets a price-averse demographic and is attempting to enter spaces that are very saturated (Steam, Origin, Epic, Ubisoft are already crushing the digital distribution medium), so then it's basically an IRC replacement for gamers.
I understand Slack's valuation as it targets huge companies with up to decades-long contracts and has projected revenues > $1B for this year, but I just don't see Discord making money the same way. I use it daily with my friends, but none of us have Nitro (although the features are pretty neat). The only way I see it moving to profitability is doing targeted ads (which will significantly hinder user experience).
> it targets a price-averse demographic and is attempting to enter spaces that are very saturated
This is accurately the current state of affairs, but these are presented like conclusions you make on an industry that's a half century old at least. Gaming was a tiny niche not 15 years ago. It's entered the mainstream less than 10 years ago. It surpassed the film industry not 2 years ago in revenue. Pirated games almost had more volume than official sales in the 90s. All these things have changed, and are still changing.
The games and games-adjacent industry is changing at a blinding speed. Maybe it'll turn into a steaming junkpile like the mobile app market. But maybe it won't. Kids are growing up with games normalized. Everyone is digital, and games are on anything digital. Incumbents that don't keep up will definitely dwindle in their influence. Big players trying to break into the industry have failed to understand the changes. Everyone said similar things when Twitch had a $2B acquisition by Amazon. I think it was underpriced, they are doing incredibly well. Price-averse? There are people literally throwing (digital) money at streamers just for fun, or to troll them, or to get their message announced on stream, or any number of random antics a streamer sets up. But really only in the last year.
A rapidly changing industry is all about timing, and Xfire was sadly too soon, internet multiplayer gaming was not the mainstream and internet/tech infrastructure for it was not as mature either. No-one can tell these things in the present, but I think now is as good a time as any for Discord to do well.
I think the industry and market, if not Discord itself (which has good execution for a fertile market), is still being seriously underestimated.
"It's entered the mainstream less than 10 years ago. It surpassed the film industry not 2 years"
I don't know how you could think this unless you mean something like esports gaming. Gaming has been mainstream for quite some time, as early as the late 80's I'd say, complete with tv show, toy, and movie tie ins. PC gaming was a little less prevalent, they cost a lot more than consoles of the era.
When I was in middle/high school in the mid-late 90s, I was addicted to the precursors of today MMORPGs (back when everything was text-based), and my career plan consisted of founding a gaming company. My mother successfully (for a time) dissuaded me, saying "Who has time to play games? Once you have money to pay for games, you'll be working at a job for most of your waking hours."
A couple years out of college, I actually did start a casual game company. Ended up giving up on it because by then I didn't really keep up with or care much about the gaming industry, but not before launching a website that hosted ~100 or so games, and getting some initial users. Most of our traffic came from the Northeast Corridor of the U.S. during the hours of 9 AM - 6 PM EST weekdays.
I recently took a glance around the gaming world. It's amazing how much it's changed. There are more AAA titles than you could possible know about. There are massively-multiplayer F2P games that people spend hundreds of dollars on. People will actually pay to watch other people play games, and there are folks who make full-time livings streaming games on Twitch.
It's different than it was in the 80s. Almost all the kids I grew up with had Nintendos or PCs, but it was a kids thing. Those kids are adults now, and they have disposable income (though not necessarily a lot of it), and the idea of climbing the corporate ladder is becoming less and less attractive to many people because corporations have made a habit of pulling the ladder out from under you just as you're halfway up. So people put the minimum amount of effort needed to not get fired into their jobs, and they spend their competitive energies in one of thousands of different games on their nights, weekends, and occasionally (if server logs are to be believed) workdays.
It's probably bad for the competitiveness of the American economy, but it's been great for the gaming industry.
Careers are inherently meaningless?! Would you mind elaborating?
The way I see it, advancing in one's career is about gaining more and more skills and experience to merit a higher paycheck, which is a proxy for the value one provides to their employers and the market in general. The proxy is definitely not perfect, but it's the best one we have.
So under this view a career is inherently meaningless, at least if you are willing to attribute meaning to people providing value to one another, which I definitely do. I don't think that video gaming (at least on one's own) is as meaningful for society.
> The way I see it, advancing in one's career is about gaining more and more skills and experience to merit a higher paycheck, which is a proxy for the value one provides to their employers and the market in general. The proxy is definitely not perfect, but it's the best one we have.
Under the view of the grandparent, the metric/proxy of salary has become so utterly meaningless because of modern day business behavior that it is no longer a meaningful thing to pursue (or never was).
I personally also have some problems with your view. According to you a corporated lawyer earning $500/hour by drafting contracts is 50x as valuable to society as someone earning $10/hour caring for disabled people, which I think is very untrue. What "the market" values and what we as people should value only has a partial correlation.
Another example, a lot of people value their family and children above all else, while having children leads to almost zero reward from "the market".
I think we are mostly in agreement. The correlation is definitely partial, but again, I'm not familiar with any better numeric value. This is the one we have.
Salaries are in essence what we are willing to pay one another for each other's time and effort. In your example, people are willing to pay a person 50 times as much for drafting a contract than for taking care of a disabled person. I don't see anything inherently wrong with this. There could be various reasons explaining this disparity, ranging from a lack of availability of people who can do that, to that job potentially being more difficult in some ways, and probably also down to it being more important in some ways, e.g. directly affecting the lives of thousands of people. Whatever the reasons are, the people who choose to pay the fee were probably unable to negotiate a lower fee for a similar level of work.
On the other hand, the question of "what we should value" is much more amorphous and I'd be interested to hear of ideas on how to model and practically implement that, if you have any. There only alternative frameworks I'm familiar with are communism, with its well known share of problems and "time banks" which I've seen working decently well at a local level, but don't tend to scale.
Meaning as determined by salary strikes me a particularly perverse method of determining personal meaning or broader value to society. It seems fairly close to the prosperity gospel, where a person is deemed to be in god's favor as divined by looking at a person's wealth. Prosperity gospel has some very nasty corollaries, such as that poor people do not have god's favor, and lacking god's favor must be evil. Or in your terms, they lack meaning in their life or value to society.
"Mainstream" as in something that you could have a reasonable expectation of having a coherent conversation about with any/every human being on the planet. (For example, "baseball" is relatively mainstream. "The Beatles", or "Elvis", slightly moreso.)
As recently as 15 years ago, a "game console" (home or portable) was mostly something upper-middle-class children owned. 10 years ago, we all got smartphones, and those smartphones got app stores, and suddenly everyone owned a game console (whether they wanted to or not), with a constant stream of games—often free games—coming out for it.
Mario got a movie in the 80s. Pokemon got Thanksgiving day floats in the 90s. But in neither of those cases was everyone playing; everyone was just aware of the brand (mostly because their kids were playing.)
Meanwhile, if you union the sets of people who have played just Candy Crush, Minecraft, and Fortnite at this point, it's probably something like half the global population. Gaming really did "blow up" in the last decade.
> "Mainstream" as in something that you could have a reasonable expectation of having a coherent conversation about with any/every human being on the planet. (For example, "baseball" is relatively mainstream. "The Beatles", or "Elvis", slightly moreso.)
This doesn't strike me as a useful definition of mainstream.
I live in Vietnam and I guarantee you that no one here could tell you a single thing about baseball, The Beatles, or Elvis.
Hell, just go to Australia/UK and no one will be able to explain baseball to you. Just like you can go to the US and no one understands cricket even though nearly 1 billion people (albeit primarily in the ex-British Commonwealth) do.
In any case, your claims about the video game market 15 years ago (in 2003) aren't accurate. In 2003 videogames in the US sold 240 million units. 54% of American households bought a new videogame -- that's far from "mostly something upper-middle-class children owned".
15 years ago 32% of households were already playing video games on a mobile device (phone, PDA, handheld game system). 35% of parents said they played video games. 69% of households said they played computer & video games.
15 years ago 2/3rd of Americans played video games. It was already mainstream. Sure, it has gotten MORE popular since then. But that doesn't mean it wasn't mainstream.
I don't know what bar you're using for "mainstream", but if it doesn't include videogames in the late 80's/early 90's, it's too high. If being more popular than any other single toy short of a ball isn't mainstream, nothing is. Sure, they're even more popular now, and they may be more popular still in some areas of the world, but that doesn't make them not mainstream 25 years ago.
as reference, according to wiktionary, mainstream is Used or accepted broadly rather than by small portions of a population or market. I think that definition can encompass 40,000,000 households owning consoles.
comparing sales of specific video games to specific albums seems like a weird comparison. for every one purchase of an album, there will be many people who hear it without purchasing it (on the radio, in restaurants, while shopping, etc.). the only legal way to experience a videogame without purchasing a copy is to play at a friend's house. games like fortnite might rival the most famous pop stars today in cultural significance, but I don't think you could say the same for GTA vs Britney Spears in the mid 00's.
Wii Sports was one of the first mainstream games. That's pretty much the boundary of the two eras. Everyone at the time was talking about how the Wii was penetrating all these "mainstream" markets that gaming had never managed to touch before, remember?
I'm wondering if comments like this, that place "mainstream" somewhere in the mid 2000's, are being made by people born later, who grew up with ps2/gamecube and then wii console gen. They strike me as not being very familiar at all with the actual success and market penetration of videogames before then.
You cannot compare games to music unless you include all licensing revenue for radio stations, films etc. I don't own a single Beatles album but I still know a lot of their songs.
some additional data age distribution (pew research 2015)
"Although playing video games is especially popular among young adults, a substantial number of older adults play video games as well. More than half (58%) of those ages 30 to 49 play video games, along with 40% of those ages 50 to 64 and 25% of those 65 or older."
"By mid-1986, 19% (6.5 million) of Japanese households owned a Famicom;[12] one third by mid-1988.[35] By 1990, 30% of American households had the NES". ~ 90 million households in the United states in 1990, which suggests that if you didn't have a NES, you probably had one or more friends who did, and were probably hanging out at their place all the time. That sounds pretty mainstream to me.
(contemporary example: Taylor Swift is decidedly mainstream. Does everyone listen to Taylor Swift? No. At best half of teens and twenty-somethings and drops off going through olders. Does everyone know someone who listens to Taylor Swift? Pretty much.)
15 years ago, a "game console" (home or portable) was mostly something upper-middle-class children owned
No. Unless you're talking about a country other than the US, this is absolutely incorrect.
Original Playstation sold more than 40,000,000 units in the U.S., and in the same console generation N64 sold another 20,000,000. On the portable front, the original Gameboy & Color version, beginning in 1989, sold more than 40,000,000 units. Keep in mind, there were only about 80,000,000 households.
There are not 40,000,000 upper-middle class households in the US. For reference, the original gameboy cost $90, roughly $180 in today's money. This is not out of reach for even poorer households. In today's dollars, even if you draw the "upper middle" line relatively low at about $100k for a family of 3, there's only about 30 million households at that level, and 16 million of them don't even have kids.
I'm not debating that video games have become even more popular in recent years, but they were mainstream long before that. "Mainstream" doesn't mean "everyone". The simple wiktionary definition is simply "Used or accepted broadly rather than by small portions of a population or market." I'd be hard pressed to say that millions upon millions of console owners isn't "used broadly".
> This is not out of reach for even poorer households.
My point with that statement was more about the image than the reality. Go back to 2002, and ask a legislator—or any childless 40-year-old—"who plays video games." That's the answer they'd give. Yuppies. Children of yuppies. (Then the XBOX hit and it became "college-student yuppies and urban youth." No market shift happened in reality; it was just advertising causing a change in perceived image of gaming as a hobby.)
> households
I really think "households" is a bad way to measure anything about gaming, because the particular way that gaming wasn't mainstream in the 1970s-2000s (besides older people just never having experienced it) was that it was incredibly male-coded.
In 2003, a girl sitting around playing GBA games was still considered to be doing something "tomboyish." It wasn't until the release of the Nintendo DS in 2004 that there was any large-scale availability of games specifically targeted at female demographics. All the home consoles were advertised at boys, and mostly had games for boys (that being the explicit localization strategy of the American branches of Nintendo and Sega through the 90s; it began changing by the early 2000s partly due to the influence of Sony, partly the diminishment of Sega, and partly the reining-in of NoA by Nintendo Japan.)
PC games were more gender-neutral (because PCs weren't advertised at kids to begin with, but in homes as a side-effect of parental usage), but AAA releases targeted at girls were still few and far between. There was... The Sims? That's all I can think of. When I ask the women I know about the games they played in that era—of their own volition, rather than because someone handed them a controller—the only other one they tend to name is Myst. Oh, and DDR, but DDR seemingly wasn't really "a video game" in their minds, in the sense that made them think of themselves as "the type of person who plays video games."
What a member of the elite class of legislators knows about pop culture is an awful barometer, especially when you toss it in as better than actual counts of how many people owned these things. You sound like you're arguing from your own subjective circumstances instead of reasoning with evidence.
And maybe girls around you didn't play videogames, but they certainly did where I was, about as much, but maybe a little less. you're assumptions here are simply wrong.
> What a member of the elite class of legislators knows about pop culture is an awful barometer
No it's not. "Pop culture" (or "mainstream"-ness) must reach even "a member of the elite class", to be pop culture. The point at which something becomes "pop culture", is precisely the point at which it becomes equally likely that you've heard of it, no matter which demographics you're a part of. If there's even one demographic (like busy rich old white men) that can still be completely isolated from a thing's "reach", then that thing is not pop culture yet.
If all 20-year-olds know about something, but all 40-year-olds do not know about that thing, then that thing is not "pop culture" (or "mainstream", either-or.)
On the other hand, if 10% of ten-year-old boys and eighty-year-old women and plumbers and astrophysicists and farmers and investment bankers have all heard of the thing, then it is "pop culture."
Try that criterion out. It really does work:
• Beanie Babies? Pop culture.
• Pogs? Not really pop culture. They were a fad, but they died out before they reached universal intelligibility.
• The movie Titanic? Pop culture.
• The movie The Matrix? Not quite pop culture. My grandma hasn't seen it. Yours probably hasn't either.
• Pokemon in general? Not pop culture.
• Pikachu in particular? Pop culture. (Thus the recent movie.)
• Snoopy? Pop culture. Americana, even. ("Americana" being a word meaning "pop culture, but pretty much only in America, so we've latched onto it as a thing that reminds us of America.")
• Hello Kitty? Pop culture elsewhere, but not-so-much in America, despite what certain stylists like to think.
It is by this same criteria that I claim that "video games up to 2003" were not—as an abstract gestalt—part of pop culture, and that "video games starting in 2004"—as an abstract gestalt—were part of pop culture. They went from being "Hello Kitty" to being "Snoopy"; from being "The Matrix" to being "Titanic"; from being "Pogs" to being "Beanie Babies."
Uh... Son I grew up poor and adjacent to some housing projects. There wasn’t a single household with kids that didn’t have a console. Even kids from the projects had a console of some kind. I remember being five and begging my older cousins to let me play their Nintendo in 1992. The only difference between now and then is that consoles have gone from being a toy you bought your kids to a media device that sits in your living room.
And I hate to be insulting but I can’t imagine you being an adult. I’m fairly certain every adult here knew who sonic and Mario were and none of us would be so ignorant as to say gaming only went mainstream in the last fifteen years.
Thanks for your America-centric anecdotal perspective presented as all-encompassing. I never knew a pokemon besides Pikachu until I was 18, and I was by far the most avid gamer in my school. Yes I knew sonic and mario, but had barely played 2 hours of those games at arcades because my parents wouldn't give me change for (played at rich friends' birthday parties in the arcade). We all have our experiences.
Your "insult" literally corroborates what I'm saying. Until within the last 15 years, we weren't adults. The "adults" of then very likely did not know who sonic and Mario were, even if their kids did. Now that we're adults, adults know who sonic and mario are. And so do our kids. And maybe some of our parents. That's the point.
Please don't start of comments on HN calling people "son", then claim to "hate to be insulting", then proceed to insult people. None of that was necessary to make your points.
There are different levels of “mainstream.” I talk to my nephew and games like Minecraft / Fortnite / FIFA and Twitch have the mindshare of a 13 year old boy that they categorically did not have 10 years ago. I ask him what he does with his friends and it all revolves around this stuff. They’re not even chasing girls!
FIFA almost certainly did 10 years ago. It’s been a massive franchise for decades. The others obviously couldn’t as they didn’t exist! But games generally were absolutely mainstream in 2008. So rather than there being different levels of mainstream I think we’re seeing new facets emerging from games and becoming mainstream themselves.
What we’re seeing that’s new is the confluence of a few things that have led to game playing becoming a mainstream career and the existence of game players that are celebrities as a result.
The other trend I see is that more ubiquitous access to the internet means more kids hang out with their friends in games as a means to socialise. But this was by no means a niche thing in 2008 there was just a higher barrier to entry. For example XBox Live debuted in 2002.
> Price-averse? There are people literally throwing (digital) money at streamers just for fun, or to troll them, or to get their message announced on stream, or any number of random antics a streamer sets up.
The magic of twitch (and league of legends, and a few more) is that this is indeed a very price-sensitive crowd, but one that is willing to engage in a steady stream of frequent capex-style microtransactions while refusing to touch opex/subscription-based models.
Most of these people also have $5/mo (or 'prime subs' that are free with amazon prime) subscriptions to one or more content creators in the community.
I don't even have netflix or spotify or any subscription service, but I find it worth my $5/month to support the one streamer I enjoy tuning in to whenever I want some background entertainment while doing things around the house, and I think that's not an uncommon usecase.
Amazon bought Twitch for $1B I believe, not $2B. How accurate are the the other figures you cited? If possible, please do provide links for figures you cite- it’s incredibly useful.
Good catch. They were all off the top of my head based on a lifetime of studying the game industry but not having the time to dig out citations for everything. They're mostly google-able, a few GDC "year in numbers" slides can show you the trends you're interested in. I'm probably off by a few years here and there. It was all just to illustrate the point that things are changing fast and not stopping, which I'm confident will stand.
I'm gonna have to disagree with you there. Gamers today are not price-averse like they might have been when the gaming demographic was mostly teens.
After a peek at your website, I see I'm quite a bit younger than you. I know a lot of people who do not have much money, but they still consider it worth it to spend a chunk of their limited income on Discord Nitro. In some servers I've even seen young teens (13-14) spending their allowance money on it. It would be interesting, based on your anecdote, if most Nitro subscribers are young users. It might be due to the custom emotes, which are probably more desirable to younger users than older ones.
On top of that, Discord has become the main social media platform for some people. I can't imagine using it that way myself, but I know a lot of people who are in a massive number of servers and spend much of their day on it. It's not just gaming voice chat for them, it's an entire social network. These people, who also tend to be quite young, almost always have Nitro, because it's worth paying $5-10/month for their main online platform.
Maybe the main area of concern for Discord should be whether these young users keep their subscriptions as they age.
It's all relative. Gamers are a heck of a lot more price averse than corporations, and the same person is more likely to spend money on a service that helps his/her business than one used for video games.
How many too-young-to-work online gamers are there who have parents willing to pay for their subscriptions / games / in-game purchases?
We already know that these kids who don't have enough (or any of their own) money have a computer, internet access, and the ability to purchase all of the peripherals and a game needed to play. What's making companies stop and say, "We don't think the people who made these non-working kids positioned to be our customers (e.g. they have the minimum hardware needed to play their game / products) will spend any more money on them."?
Are there more kids whose parents buy them computers and allow them to play games than there are corporations / businesses?
Do all corporations / businesses and products made for corp/bus only allow for micro-transactions or are their products a monthly/yearly subscription fee (fixed rate) or is it a one time purchase?
Are we expecting future generations to stop buying computers and games for their children? Are we expecting children to stop being born or stop growing old enough to be able to use our products?
It's a demographic that's got infinite potential and every year there is a new set of customers. And, if you get on any single customer's good side they can become loyal, paying customers when they reach an age where they are no longer price-averse.
I certainly expect children to stop being born. Looking at how expensive it is to raise even one, I quickly see it become an upper class thing to be able to afford a child.
That's a very interesting statement. Could you share some more information about what events in history or research in "evolutionary biology" suggest this ?
I don't know where to start searching from for this information...
Nothing direct from what I've read but I'm extrapolating from various "decline and fall of X civilization(s)" - all great societies have been through a phase where the society no longer produces enough defenders and the ones alive lack vitality to protect against relatively primitive less technologically sophisticated "barbarians".
Also, what we're seeing happenning in Europe right now on immigration. Japan is a bit weird right now.
Prebuilt maybe have some nice margin, but I don't know any gamers who haven't bought their PC custom, or assembled by the retailer. Those have very thin margins, both component manufacturers and retailers have very stiff competition.
At retail prices but I’ve never known anyone besides rich people or rich grandparents that can afford to spend $2500+ (video cards are well above $600 for high end and the other components at retail tend to get inflated similar to how Apple pads their SKUs around) so a teen can mess around playing games (mostly looking at it from the lens of how I was raised and the attitudes of my elders as well as my non-nerd friends). The usual ignorant gift giver would have bought a console or something towards the console like games or an online subscription.
The areas usually where margins come from are:
1. Skimping on PSU quality
2. Reduced motherboard features
3. Adding LEDs as a “value add” (why earlier this year RAM with LEDs we’re going on sale ahead of the non-LED RAM)
That depends a great deal on the part, and—again—what is "high" relative to other products. nVidia's Quadro cards have much higher margins than the models targeting gamers.
At least, they do for the plans I'm familiar with. I don't know what Slack's giant enterprise agreements are like, but I imagine they're still getting paid plenty per-user.
> I know a lot of people who do not have much money, but they still consider it worth it to spend a chunk of their limited income on Discord Nitro.
I'm often surprised the type of people who are willing to pay for Nitro on Discord just for the cross-channel and animated emoticon support. I've been in communities with college students who despite posting how they're struggling to pay the rent will still keep up their Nitro subscription. The majority won't be subscribers (like most services with a free tier) but I think some underestimate those who would be, especially when targeting a mostly gaming demographic which I think has changed over the years in terms of spending habits.
After over six months of being harrased with “upgrade your skype for better experience”, I finally buckled up and clicked “ok”. When Skype came back in less than five minutes I felt that Microsoft read my mind, pickup all the features I loved and used daily, and deleted them off their new version! it simply blew my mind! In addition everything worked different! New Skype is entirely new messanger, not Skype upgrade. Thank God I was able to find previous version and still install it although I am sure eventually they will cut off old versions.
The new UI is the most anti-user-friendly thing I have ever seen. They took something so simple and made it absolutely hard to use. I work with many non-tech people and they hate it. Skype is done.
Not sure if I agree considering it indirectly competes with both Xbox Live and Teams. In another world maybe they could buy it just for the tech and make something more synergistic with it, but they already did that with Skype. So ultimately I just don't see how Microsoft would monetize it and integrate it with their existing products without competing against themselves.
I think Amazon is a more likely acquirer considering they already have Twitch and Discord could vertically integrate with their cloud + it will make their ecosystem better for eventually launching a Steam competitor which I am 100% sure they plan to do at some point
I think it would be an even better buy for Epic Games. It would give their Epic Games Store immediate credibility, and add all of the communication and community features that they are currently lacking.
A Microsoft buyout would kill the thing just like Skype.
For the entire time that I've been (PC) gaming, that is starting in the early 2000s, people have been using Teamspeak/Mumble/Ventrilo and recently entirely transitioned to Discord. Everybody either had their own VoIP server or hopped on a friend's. I've never seen Skype used consistently. The assumption being that Skype has just too much overhead. Which is comical when you think about what Discord is.
I think it's more about scale. Mumble and co. have good enough noise cancelling and management options that it's reasonable to have 30+ people in the same channel. Skype becomes a mess around 4-5 people. Discord is still much worse than Mumble, but apparently still close enough that people can't be bothered to set anything else up.
My high school friends and I used it up until we switch to Discord last year (so ~2013-2017). We all had Mumble and TeamSpeak installed for when we needed it, but all through high school we had a Skype group chat that we always used. It was a admittedly a bit of a hog, but it was free, looked nicer, and had a few more useful features then Mumble or Teamspeak.
When I played CS:Source in a clan, we had Teamspeak that we rented a server for. When I played WoW and Guild Wars with a small group of friends, we used Skype because it was free. Early-to-mid 2000s.
At the end of MoP and during WoD, everyone was all of a sudden using Skype for everything in WoW (raiding, PvP, dungeons, etc.). I remember it vividly because it was so annoying.
I think mostly for small groups. For groups of friends Skype was usable, for guilds it was terrible.
There was a period when I went back to a WoW expansion that everyone was trying to go everyone onto Skype for pickup groups which was a horrible experience.
Discord, however, is a bit of a lifestyle brand like Twitch. It's where conversations happen, and it's incredibly useful to the gaming community. If they can get even a toehold with their subscription services and store, I think they have a very serious chance of turning towards something valuable.
Discord is as valuable to the gaming community as IRC was, or as Ventrilo was, or as Skype was (for a while). In other words, not very (as all those tools were easily replaced). Twitch built a marketplace of creators and consumers (like YouTube) -- that's why it's hard to replace. Discord, on the other hand, is a chat program.
I disagree (to a degree). Everyone i know kicked and screamed about switching from Vent/Teamspeak/Mumble. I feel like it eventually dominated not because it was easy to dump existing solutions, but because existing solutions were poorly designed by comparison. No mobile, horrid chat, required install, poor voip quality. Discord came along with a better offering and it still was a tough switch.
With that said, i agree that no one "cares" about Discord. If a better thing comes along i could easily see people dumping it. But, i imagine it'll be a bit more difficult. Discord "won" in my view because it simply had to be modern to be vastly superior. However, i'm unsure how easy someone can make a next version that is such a superior leap.
Fwiw, as a gaming voip/chat i still find it a pretty great UX. My only complaint is that it is a bit laggy due to the, i assume, web-based interface on "desktop".
I think one big killer feature Discord has is that you just have to paste in an URL/shortcode to join a server instead of needing to enter an IP and create a username to join every server. It is so much more streamlined to join a Discord server. The voice quality and chat features are both whatever although I would say that Discord feels like a more responsive and less resource intensive application than something like Slack or nuSkype.
The last time I used Slack it was a giant memory hog and used a lot of CPU resources. I don't think Discord would have become nearly as popular compared to say Mumble or Teamspeak it was not also relatively efficient in terms of system resources because PC gamers are very sensitive to big resource hogs.
As far as becoming a digital retail storefront, it has zero advantages compared to the other various competitors. While the other digital retailers do have social features, those social features are generally add-ons that aren't critical to the experience. Many of those storefronts also have API hooks that many developers rely upon for certain game-relevant social features like joining a friend's game in progress.
> Discord "won" in my view because it simply had to be modern to be vastly superior.
Discord "won" because it's literally burning cash and offering a service for free (for example, I don't have to pay for a t2.micro instance to host a Mumble server). But this is obviously not sustainable.
If you're selling a dollar for fifty cents, it's not hard to find a market.
Relaying some text is cheap. If I had to pay 3x the actual server cost to run one (so the rest can go toward development and staff), it would still be minuscule.
My friend circles on discord have enough people with nitro that it's almost certainly cash-positive by a lot.
Yep; it’s important to note that the signaling required to coordinate P2P voice and video is no more expensive than “relaying some text” with modern protocols. The question is whether Discord can remain sufficiently innovative to be ahead of the next thing that tries to disrupt its model. I think it is sufficiently irreverent, and sufficiently independent from B2B stability needs, to be that innovative.
But even if you gave me a free mumble service, it still wouldn't be comparable to Discord - at least when i was using Discord.
The price wasn't the issue (imo), it was simply the user experience. It had the best, by leagues. Users (ie, non hosts) didn't pay for any of these products, but the UX of Discord was vastly superior in my view.
Good for you, but it's still optional for the right crowd. More specifically, you don't have to. Users can connect to your gaming group with zero friction. Not even signup! (at least, back in the day, i'm unsure what it's like not)
All of those were a pain in the ass for one reason or another, Discord caught on like wildfire because it was a huge step up from what existed. Pretty much a combination of the best parts of IRC + Teamspeak + Skype.
You don't think Discord has any lockin? For a lot of games, coordinating voice chat these days is "paste a discord server invite in chat". Pretty much any guild/clan/subreddit/group/whatever has a Discord (apart from ones with really old TS servers etc), so if you're in one of those, you probably have Discord. Much easier than negotiating Skype/Mumble/TS3.
I'd say Valve/Steam is feeling a lot more pressure these days than Discord.
I'm not sure Discord will ever be a hugely valuable company, but judging by the fact that every launcher in existence (Steam, Battle.net) is trying to clone their features, I'm sure they can at least sell it for quite a bit.
I was really expecting them to push out of the gaming niche, but with the store it looks like they're doubling down on that angle.
I disagree. It's more connected to communities than IRC/Vent/Skype. Right now I hang out in multiple alpha dev game discords, speedrunning discords, a personal game friends discord, a queer gaming discord, and a tabletop game development discord. The degree to which I'm connected to communities is much stronger than in something like IRC or Vent.
Many game developers use Discord to organize beta tests, gauge feedback, share announcements and manage and measure their community following in general. The fans feel good for being included in the process and the devs feel good knowing roughly how many people they can expect to buy their games at launch time. I hope they figure out a good way to monetize this, since I see it as their killer app.
We’re started using Discord for remote employees and now use it for the whole engineering team. I can very much see discord introduce more business specific features and directly compete with slack.
Not long ago they gave me access to a huge amount of their new game library just for being a Nitro user. And they're competing with Steam by offering a better deal to publishers... which is a good thing. And of course, their voice chat is top-notch.
Bias: They're also powered by Elixir, my current favorite language.
I think you’re underestimating the market and features Discord could bring to gaming companies, eg identity management, cross games challenges, and more
On steam, most people don't want to use the in-game friends client even though it looks a lot like discord in style (when you get to the chat rooms). Not sure why that is, but Steam Chat most definitely lost to discord.
Do you think that because most have $2k+ of gaming gear + regularly drop $120 each game? I'd say that they spend money on the aforementioned things because there's no cheap alternative. They dumped all their money into hardware + games (unavoidable costs) so they can't afford to spend money elsewhere.
PUBG is still massively popular with the demographic it is made for. Fortnite is popular because it pulled in a new demographic of young kids, new gamers, and was easy to get into. Just because Fortnight is more popular overall doesn't make PUBG a failure or that it "lost".
Yeah PUBG has 400k players on steam, down from 1.5M at peak. Not bad at all considering nowadays most games last a year or two at most before they decline quickly...except the evergreen ones like Counterstrike and League/Dota
Well, that and the fact that two years after the game released it can only run on the most premium hardware because they never paid down their tech debt.
There is a much, much easier explanation for the obscene valuation:
> The round was led by Greenoaks Capital with participation from Firstmark, ___Tencent___, IVP, Index Ventures and Technology Opportunity Partners.
All and every big Chinese company seeks to exfiltrate cash out of the country no mater what the justification is.
That way you have China Rail buying Canadian casinos, tech companies buying American pig farms, and a farming cooperative buying Dutch semiconductor fab equipment maker.
I will not be surprised that Tencent will dump them upon first opportunity. I am almost certain that all other players on board the deal are there just to provide the justification and legal cover for otherwise nonsensical deal.
Yeah this is written by someone with no knowledge of the industry.
Tencent has been making strategic investments in top western gaming businesses for years. This is completely consistent with their investments in, for example, Riot and Epic. None of those have been dumped.
I feel like if Discord had a default white theme and took out the gaming-specific references, it could easily be a better choice for business comms than Slack.
They would also have to completely overhaul their permissions system, as it is extremely complicated and ACL based, whereas slack has much easier to grasp concepts of private channels and public channels, which is fine in the business world.
I strongly believe Discord would be a better alternative to Slack in the workplace. Drop in/out voice channels combined with chat would be fantastic for geographically disparate teams.
I'd be more bearish on the stores of Origin, Epic, Ubisoft. Building a user base has to be done bottom up. Companies in general cannot do that because their approach is a forced top down one, pushed by marketing and sales.
I think it's fair to believe that Discord can be one of two stores together with Steam. Other publishers are likely to fail.
Stores have nothing to do with "user bases." You just want people to buy stuff. As a publisher, you have all the leverage when it comes to pricing arbitrage. You can sell game X on your platform for $45 and sell the same license to Discord for $50. The consumer doesn't care where they buy it from, as long as it's cheaper. Obviously, they're incentivized to buy it on your platform.
I'm not saying that platform size doesn't matter, but funneling resources for a win there would be a Pyrrhic victory. Steam won that battle a long time ago.
> if you sell it on Steam you can't sell it for cheaper elsewhere
My understanding is the actual rule is a bit narrower than that. You can't sell _Steam keys_ cheaper elsehwere. If you sell it as a non-Steam game they don't have any input on it.
Wrong. Stores need traffic, which is why they locate on shopping streets, in large malls, offer large discounts at times and use loss leader products, and buy advertising.
That's incredibly reductive. Not all traffic is created equally. Reddit, for example, is notorious for providing awful bang for your ad buck[1].
> Discords user base is traffic.
Oh, I see, so Facebook and Google should've started online stores because of.. traffic? Of course not. If you build a (big enough) platform for free, one of the few viable ways to monetize is to do ads. Making a store is a very dubious prospect (which has not been received particularly warmly). If you're going to bring up Steam, keep in mind they had about a decade of first mover advantage.
This is just a bunch of random points added together. You have the confidence of someone fully ignorant of the subject matter.
The equation is relatively simple. Out of everyone that visits your online store, a small % will make a purchase. You can can both optimize quality and quantity of traffic. For traffic, you need to keep it coming every day, through out the year. Discord has that returning traffic/users. Game publishers do not.
I think you’re confused. Ubisoft, Epic, Bethesda, etc. all have launchers/storefronts that people need to use to play their games. Saying they don’t have “traffic” is nonsensical.
(But as I mentioned previously, and you brushed off, traffic alone is an awful metric anyway.)
I'm a pretty big discord user, early supporter/nitro/hypesquad and all that, and I have never heard of this "influential crowd" calling it uncool. All I've seen is servers getting larger and more servers popping up. Discord themselves just ran a Snowsgiving server which raised 100k for charity in under a week and had ~10k people in it at any time I checked chatting.
I don't have any lag on any devices nor do I hear of anyone else having that issue. The store was maybe not asked for but it's continuously getting better. With the latest announcement it's even more exciting.
I'd like to hear about how you think it's a datamining operation as well. The only times I've heard that are from when a lot of alt-right and neonazi servers/users were banned and started an astroturfing campaign.
Their response to the request for end to end encryption was a non-response. They've stated that they believe in security but it doesn't get any more substantive than that.
I agree. It is the de facto app for chatting amongst gamers, especially streamers. Just check out streamers on Twitch: even the tiniest ones have a Discord server.
The biggest thing is that while it's focused to and originally for gamers that's not the only thing it's used for. There's a server for anything now. Subreddits have Discords, I've been in the typology/psychology Discords a lot. Discord themselves even has a page promoting it for open-source projects.
the GDPR data takeout option (maybe only for european users) contains a lot of creepy shit (essentially every click and mouse movement), but no audio data
I tried that. The lack of mentioning voice data in their privacy page is disturbing.
Except one mention:
>Developers: Developers using our SDK or API will have access to their end users’ information, including message content, message metadata, and voice metadata.
Since voice metadata is explicitly mentioned, real voice data must also be stored somewhere.
Also,
>... your activities within the Services
is very vague. The lack of mentioning voice data is probably because of the huge backlash. Wiretapping every user.
> Since voice metadata is explicitly mentioned, real voice data must also be stored somewhere.
That's not necessarily true. "voice metadata" could be things like quality settings, latency history, when you join a voice channel, when you leave a voice channel, etc. It may have a lot of metadata about it without actually storing the audio streams.
A phone PBX will have tons of metadata about calls placed through it, but it might not bother recording every call that goes through it.
It's not creepy. Discord tracks mouse movements to tell when you're hovering over something and tracks clicks to tell when you've clicked on something. It's just how the client works.
Are you a Discord developer? It does need to be transmitted for it to work based on how Discord is made. Your argument would be better written as, "I believe Discord could be made differently for this not to be needed."
I did see a video or article on it earlier, I wish I still knew where to find that.
Common sense. It does not. In fact I just tried it. Went offline, and clicked some settings in the Discord program. It worked. Chat messages from a channel also worked (those preloaded of course) and clicking a link opens the browser. No need for sending cursor information anywhere for this to work.
So tell me again, why does Discord need cursor movements to work?
Discord isn't just for gamers. Though that's where it started, its robust community management features have made it's a go-to for online creators looking to engage with their audiences.
It's especially prominent among Youtubers, and is increasingly becoming seen in some circles as a safer alternative to public forums like Reddit for topical discourse. This is, in my opinion because there's no formal discoverability mechanism, and the invite feature lets server admins make their communities as inclusive, or exclusive as they want them to be.
Discord has a lot of appeal outside of its target audience, and its growth in other areas is largely automatic since a lot of subcultures online exist in parallel or close proximity to hardcore gaming demographics.
That's where I see its future being the brightest, so long as the service doesn't get too cluttered with unnecessary 'community' features.
Do you know of any comparison between use of Discord and Slack for these kind of community management use cases? Is either one used more and what are the relevant feature differences?
Discord is definitely used more often for communities. Some community focused game companies come to mind: Amplitude, Coffee Stain Studios, most gaming oriented youtubers have discords.
I think the relevant feature differences is that Discord comes with free voice chat and free complex permission and group management features, as well as a much simpler on-boarding procedure (slack has you fiddling with accounts for each individual group).
I honestly couldn't speak to differences between the two services. I used Slack for one semi-professional community in particular a few years ago, but have since used exclusively Discord, due to its ubiquity. I do recall that I immediately preferred Discord's UX, but I can't remember anything that impressed me in particular.
As for anecdata, I have yet to stumble upon any active community still using Slack in the last couple years, but I am aware of several Slack groups that cater to industry-specific demographics, though since they require membership in their particular industries I cannot speak to how active they are or whether they've since changed platforms.
The reason discord attracts both crowds is that they can safely and easily exclude each other.
Sure, /r/the_donald is in discord and uses it to coordinate raids and harassment, but they perform those raids on Reddit and Twitter, where making a sockpuppet takes five seconds and you can instantly yell and vote at anyone on the whole site.
You can't target a discord like that, you need an invite that mods can revoke or stop issuing at any time, or use hierarchical user privileges to hinder new accounts, or any number of other moderation steps.
I've used Discord for a long time and my previous startup was even part of the Hypesquad program. However, I'm really concerned with their views around E2E encryption. We've asked many times for an end-to-end encryption service. This became the #3 most upvoted request (https://support.discordapp.com/hc/en-us/community/posts/3600...). Unfortunately, their "rejection" and user comments were deleted after they switched feature request systems.
It was something along the lines of "we take security seriously but we won't do this." IMO, it's pretty important for them to actually consider implementing this.
I'd argue that it's actually impossible if the target group is not technically skilled. Discord has too many different clients, just the key exchange would be a nightmare for the average person. TeamSpeak tried to use keys for their profile management but everybody I know just simply regenerates their keys when they freshly install TeamSpeak, so it's effectively useless when combined with E2E encryption.
To be honest, I agree with the people saying that this isnt discords responsibility. The real baddies are already using other services, and IIRC Discord has handed over user data for other cases as well
In addition to this, they've also locked the ability for users to vote for this feature so even if you do sign in, you can't vote for end to end encryption to be implemented.
What I find quite strange in Discord (gamers) vs Slack (business/software) is that Discord has syntax highlighting in code snippets, but Slack does not..
I've found discord to be a very reasonable alternative to slack and I think their branding as a 'gaming service' is more of an effort to carve out a niche than related to functionality. It actually works pretty well as a generic chat / collaboration tool.
Were finishing a HipChat migration to Slack in January. HipChat doesn’t even have inline code or any syntax highlighting so I’ll be very glad to make the transition.
As much as I want something like discord to succeed, it throws all cautions to the wind with user data. There is rentention in two databases of every chat message sent. If somebody ever gets access they could crawl all their info and learn most of their private life through it.
Steam on the other hand will not retain more than 5ish of the last messages.
I'd say it's fine aslong as users could set a duration for their messages automatically, but Discord doesn't even have a mass deletion option. Their API has been Incapable of mass deletion further than 2 weeks.
I have no doubt there will be some major leaks in the future that ruin someone's life.
There is no way to massively delete your past messages. In addition to that:
1. If you close a private message window and are not friends with the person or share a server with them, there is no way to open it again, so you've lost access to that chat history and can't delete your messages from there.
2. If you get banned from a server, you lose access to that server's history and can't delete your messages from it.
3. If you delete your account, your messages are not deleted and stay in all private conversations and servers forever.
Their data management is simply terrible. Personally, I would've deleted my account already, but I don't feel comfortable knowing I can't delete my past messages and that they may add that option later.
I'm a bit confused about 1. First, you can't private message someone if you're not friends and/or don't share a server. Second, all DMs are placed under the DM menu and are visible until you delete them.
Discord is in this weird situation where they've been massively successful at some specific things that people aren't willing to spend money on, and not, as best as I can tell, anywhere else.
They're absolutely the community chat tool of choice these days - just about every subreddit you go to, every fandom you could ever think of, has a discord community. It's incredibly easy to put one together.
But things like Nitro seem to have minimal adoption. The game store isn't particularly compelling. They've got some partnerships with games where they offer Discord up as the actual in-game voice communication, but I haven't seen much adoption of that, and I don't know if it actually results in revenue for them, either.
It's not unique - we've seen plenty of major tech companies in similar spots - but they've basically all pivoted to advertisements as a way to make money, something that Discord has categorically said they don't want to do. I don't know what they could do to really turn things around here.
They don't release numbers, so everything I have is personal anecdata, but I'm in 12 active Discord communities, and any time the discussion has come up, pretty much no one involved has a nitro subscription.
We're the demographics that, at least to me, seem the most likely to pay for it as well. Better than average incomes, MMO subscribers, groups that host their own servers for games that support it, subscribers to twitch streamers, etc. I can't fathom who is paying for Nitro in large numbers if not these demographics.
Why do people think this? I know a good chunk of users I interact with every day pay for their Nitro subscription. It's not crazy to think I can buy a game or two on it as well. They partnered with Warframe, I think things are going well.
I'm curious to see how Discord fairs in the long run. I've been a daily user of Discord for nearly 2 years now, and I think their core text-and-voice service is the best on the market (for now). However, whenever I hear about Discord's financials, it is always with regards to additional secured funding, and very little discussed about their userbase revenue. I see a notable number of "regular" users with Nitro, but very few so far seem interested in their game market. I'd be interested in seeing how well their cash input is fairing, especially with regards to Nitro. A few days ago, they gave away a large number of free Nitro benefits for a month, so I imagine that many users who had never tried it before (like myself) are being additionally tempted. We'll see if it pays off.
I have been using Discord since the very beginning, as a replacement for TeamSpeak, Ventrilo and the occasional Mumble ( friends and onlinr friends). Also it replaced entirely Skype. And IRC for pugs and finding opponents to "fight".
Discord is great and free. I would have never expected them to try and take a bite off Steam.
Steam has a lot of issues but it's also the king of the hill and will be extremely hard to take a seizable chunk of their cake away.
With the Netflix for videogames approach Discord enters another unsustainable model, with the first one being unlimited chat and voice-chat for everyone.
I wish them the best, it would suck if Discord disappeared, but they're throwing a lot stones into the gaming well. And we all know how the gaming world is...
Worth $1.65B April 19th, worth $1.85B December 19th (+$150MM in new money, for a post-money of $2B ignoring rounding, options pool expanding and preferences).
When you look at broader market conditions, this is somewhat impressive. Picking a FAANG out of a hat, AMZN is down 12% in the same period. Granted, they're at different stages, but there have been some serious valuation headwinds in the past few months.
The close proximity to very lucrative services like Twitch makes this an extremely interesting company. With eSports breaking into mainstream media outlets like ESPN, having a fully fledged community gathering place with all the trimmings, voice chat, raffles appears to be marketing heaven for a generation raised on YouTube and gaming streams.
I wonder what's in store for Discord next. Integration into games? Digital currencies blending the virtual worlds with reality?
Discord is now imo the best positioned competitor to Steam based on their latest updates.
They're launching a full self-service game publishing platform and only taking 10% revenue, instead of Steam's 30%. Discord already has the gaming focused community and their store has already been doing very well and is super easy to use. If Discord broke into the streaming market there would be no reason to ever leave it for some people. Buy your game, talk to friends and join their games, watch streamed games - all from one client.
Discord does already have some integration into games with the rich presence stuff and some games you can even jump into from a chat. The overlay also works like as if it's chat within a game.
I might argue that Epic is also positioned to take on Steam. Small cut of proceeds, and they have a HUGE audience of kids about to age into the gaming market who have only ever played Fortnite (and don't have the baggage of a huge Steam library.)
I love Discord though, and I generally agree with your analysis.
>they have a HUGE audience of kids about to age into the gaming market who have only ever played Fortnite (and don't have the baggage of a huge Steam library.)
This never occurred to me before. When you put it like that it really does make me think they could be an extremely strong rival to Steam.
Do you have a source for "their store has already been doing very well"?
I buy quite a few games, but can't see a compelling reason to buy anything from Discord. I also don't know anyone else that's bought a game from them yet either.
I also use Steam to buy games but unless Discord lands some super good unique tripleA names, I don't see many people moving away from Steam...even considering that there are other games marketplaces popping up left and right.
They did recently launch their game store, so they'll be taking on the liked of Steam but as a $10/month service to access (almost) all available games.
You know, this might be a linguistic nit, and likely not a popular one to mention on HN, but...
I find it awfully odd to use the word "surpassing" to describe valuation, given that valuation is a number on paper. "Surpassing" is for something where there were expectations to exceed; or an arduous challenge overcome to the surprise of onlookers.
Valuation is an expectation; by definition it cannot be exceeded. While running a company is surely arduous, the most interesting challenge and the place to surpass expectations is not in the board room where the valuation is decided; and whether the math is massaged to offer a valuation a few decimal digits above or below a nice round $2B is more a foible of those in the room than any real indication of... anything.
Odd phrasing, to say "surpassing" here. It's numeric assignment.
We're also using Discord to deliver our classes and as an alumni community, because our students are teenagers and either already familar with Discord or not turned off by the UX/UI as it's made for that demographic.
Discord banned my account a few weeks ago when a user reported a one word joke I'd made.
Here's the scenario:
Troll: "Whats your age?"
Me: "9"
Troll reports messages to Discord after completing the baiting technique (clearly has done this before to other people.)
Discord immediately disables my account despite the fact that I
1) paid for Nitro with a credit card in my name and have an ongoing subscription to Nitro
2) Entered my birthdate/age as nearly 30 in my original registration.
Screenshots of everything including the messages that Discord banned me over:
This company does not deserve our business. While banned I had no access to any of my private chat logs and the servers I run were in jeopardy of being lost.
Even though they eventually unbanned me, their last email wuite clearly demonstrates how ridiculous their procedures are: "Never joke about being under the age of 13 [even in private messages.]"
They try to back up their bullshit by mentioning it is a because of COPPA. Reminiscent of Slack banning all non US ips because of supposed "embargo laws."
I would love if a lawyer could chime in like in the Slack thread and show how lazy anf customer hostile their procedures are.
We need to quit using these centralized services. They clearly do not care about you or me as free speaking individuals or even as customers. They are just looking for the next IPO or funding round. The actual revenue we provide to them? Shoe gum.
Odds are that their reporting and content moderation services are outsourced to companies that are given guidelines and follow them strictly, with no room for interpretation or nuance.
No one in that support org is going to go cross-reference your account details and look that stuff up because (1) they hopefully don't have access to it and (2) no offence, you're not important enough to get some kind of special treatment.
Your expectations that a company with millions of customers should "get the joke" or spend time triple-checking whether you were serious or not are unrealistic.
That's just the reality of moderation services at scale in today's Internet. No one does it in-house anymore, so it's all very very black-and-white when it comes to enforcement.
There shouldn't be a reason you get banned from a chat client except for abuse. I don't see your point making sense except from maybe a sheltered millenials curated softy platform perspective shaped by the centralized services like YouTube and Twitter.
If their TOS says you have to be over 13 to use the service, and someone reports you for saying "I am 9 years old", and that goes in front of an outsourced content moderation team that has been given rules that say "you have to be over 13 years old to use the service" then what do you think will happen?
I'm happy for Discord since I know they're a big user of Elixir [0]. I'm sure it will make the Elixir language stronger and will make it a strong candidate for apps in the future. Much like how Twitter/GitHub did for Rails.
They launched a game store this year, and they sell pro accounts ("Nitro") with extras like animated avatars, higher streaming quality and free access to some games from the store.
They have a premium service, but I can't imagine they're making enough off of that. From what I can tell, they aren't making money, and are just spending investor capital
It doesn't make them much but I believe they sell a premium version with access to stickers and other stuff for chatting, and they have a video game store for PC now.
I'm sure they don't. You can pay to use an animated gif as your avatar and some other useless gimmicks, and as you can imagine, the % of users who pay is abysmal.
I just managed to get trought the techcrunch ad choice page and tell them my choices: took about an hour.
I think someone could make a performance art piece about scrolling throught the ebay ad choices: that was a quiet half an hour spent contemplating the online ad industry.
How can something as basic as a chat technology be valued at so much? Seems crazy when there much more important problems to solve. Maybe I am missing something :)
It's based on the equity the investor is purchasing in the investment. Here's an easy math example:
I invest $10 in a lemonade stand and get 10% equity in the company. That means that I can theoretically buy the company at $100 to get 100% of the equity.
So when investors put $150M into a company, they are purchasing equity/stock/shares/whatever and the company can then be valued based on the percentage of equity they get for their investment.
More or less, with the very big caveat that the specific terms of the deal means it's almost never actually a straight exchange of money for share of equity.
I would venture it's the huge amount of monthly active users. 200M users at just $1 a year (or month) is a lot of money compared to the $150M they just picked up in debt.
I understand Slack's valuation as it targets huge companies with up to decades-long contracts and has projected revenues > $1B for this year, but I just don't see Discord making money the same way. I use it daily with my friends, but none of us have Nitro (although the features are pretty neat). The only way I see it moving to profitability is doing targeted ads (which will significantly hinder user experience).
I see it going the way of Xfire[1].
[1] https://en.wikipedia.org/wiki/Xfire