Discord: Turning Servers Into Dollars
Isn’t Discord Free? Let’s Find Out
If you run a company or are a professional and need a place to work, chat, and collaborate with your team, you may go to Slack. But if you are a gamer or someone who just wants to hang out, chat, and chill with like-minded individuals online, you go to Discord.
There is a very fine line between Slack and Discord.
However, both platforms look pretty similar in many ways. But businesses and organizations don’t use Discord anymore to collaborate and communicate with their teams and employees, but they might use Slack, Microsoft Teams, Basecamp, etc. Why? It’s not just that businesses show concern about Discord privacy, but it’s also because Discord isn’t designed for business and professional use.
Look at the Discord homepage:
Group chat, that's all “Fun” and “Games.” What does this mean? Discord is a platform primarily designed for gamers and individuals who just want to hang out, talk to like-minded people, chill online, and build/find a community along the way.
But the interesting part? Slack and Discord both have a pretty similar use case & UI:
What’s the point I’m trying to say? You, as a founder and builder, can build a similar product that already exists in the market but attract a different type of user and demographic to make it successful. You don’t need to take a slice of your competitors if you just build a similar product for a different group of people.
And that's exactly how Discord thrives in the market. Slack directly competes with big tech giants: Microsoft Teams, Google Workspace, Trello, ClickUp, Basecamp, and many others. But Discord? I don’t know if it has a head-to-head competitor. Gamers aren’t going to use Slack or Microsoft Teams to livestream and talk to their fans.
You see what I mean?
Discord has done a great job of building a great product for a specific group of people. However, that’s not what’s important here. What’s important is, how the heck Discord even makes money, isn’t Discord free, who pays to use Discord? These are the questions worth asking if you want to understand the economics of Discord.
The unfair advantage of Slack and other similar products is that they are business tools, so it makes sense if they ask people to pay for the service, most would pleasantly do. But Discord? It had to make a smart move on how it’s going to monetize the users, as it’s not for professionals.
So today’s deep dive is dedicated to Discord’s business model. I’ll walk you through what Discord is actually, its founding story, how it’s doing number-wise, and most importantly, how it makes money. Why care? Discord's business model tells founders and leaders how to keep the user experience top-notch while sustaining the economics of the business.
Get your popcorn ready, and let’s dive in!
What is Discord
Discord, similar to Slack, is an online communication tool mainly built for gamers and individuals who want to hang out, chat, and talk with like-minded people via sending text, doing voice chat, and hopping on video calls. Users on the platform can also share emojis, images, and graphics.
You can understand what Discord is trying to do or stand for from their mission statement, which goes like this: "To be the best place to hang out before, during, and after playing games.” This simple statement sums up everything.
All in all, it’s worth saying that Discord is mainly focused on gamers, helping them build/find a community on the platform. However, the features and services Discord offers aren’t limited to gamers, anyone with the intention of finding a community, talking with like-minded people, and just wanting to have a good time together, can use Discord.
To understand it more, you need to understand how Discord actually works.
To use Discord, anyone can go to the Discord official website or just install its app on their preferred devices, widely available on Android, iOS, Windows, Linux, iPad, Tablets, and many more. If you want to create a community, you have to start what Discord calls Servers—each server has channels that work as groups. If you want to join a server (community) either you can find them on the platform via Discord’s Explore Page, or you have to get the Discord server link firsthand.
What Discord calls Servers can be either free to join, where you, as a user just need the link of the server. Then there are servers that require permission from the server owner or moderator, who must accept your request for you to join the server.
Once you have created or joined a server, you can start joining different “Channels” and participate in the conversations. These Channels usually come in three mediums: First text-based channels, where you have to type to engage. Second, voice-based channels, where you need to speak to engage. And third, video-based channels, where you can, just like a Zoom call, hop on video calls to see other faces live.
Moreover, users on the platform can also livestream games that their fans and the members who have joined the server can participate in—in real time. They can listen to music together. They can study together. And all the other fun stuff you can imagine can be done on Discord.
A user can create up to 500 channels inside a server. These channels are different on their own, with each having a different dialogue box. For example, if you are a designer, you may create channels like: #Design Ideas, #Figma Chat, #Lightroom Talk, #Canva Show, #Designers Chill, and 500 others like these.
A user can create 100 servers (so basically 100 communities) and each can have up to 500,000 members, which I think is pretty mind-boggling, as it’s totally free unless the user wants to spend money on the things Discord offers.
Watch how Discord works by Discord:
So, where does it all begin?
When I first learned that the Discord founding story is pretty similar to Slack, I was completely surprised. I was like: “How in the world can two similar companies have a pretty similar founding story?” At first, I couldn’t wrap my head around thinking, “Is this a made-up story?” But guess what? Turns out it's a true story. If you don’t already know the interesting founding story of Slack, read it here.
Just like, Slack was a by-product of another gaming company its founders were trying to build, Discord also has a pretty similar story. Its founders were trying to build a product, but the original product didn’t go anywhere, and Discord was born.
Slack founder, Stewart Butterfield had sold his first company, Flickr for $25 million to Yahoo before founding Slack in 2014. Similarly, Discord founder, Jason Citron had also sold his first company, Openfeint for $104 million in 2011 to a Japanese gaming company, GREE before founding Discord in 2015.
Jason Citron, after selling his company for millions of dollars, decided to take some time off and figure out his next move. Deep dive he had no intention to build another company. He, 26 years old, just wanted to play games with his friends.
But guess what? In April 2012, he founded a gaming studio called Phoenix Guild to focus on developing next-generation tablet-based MOBA (multiplayer online battle arena). And soon they introduced the first project Fates Forever, especially designed for mobile.
In 2013, another gaming enthusiast, Stanislav Vishnevskiy joined, and renamed the studio to Hammer and Chisel from Phoenix Guild in 2014. One of the cool features of the Fate Forever game was, players could send text, voice chat, and share images with each other.
And just like Glitch, that Slack founders were trying to build but couldn’t succeed, however, as a result, Slack was born. It’s the same story here, Fate Forever had a hard time finding users and growing the product—as a result, the founders decided to shut it down.
But they realized they could double down on this “Chat” feature.
Guess what? In May 2015, they shut down the game they were building and introduced a new product that they called “Discord” for desktop and mobile. 5 months go by, nothing happened, then in November Discord hit 1 million users, then 2 million, then 5 million, then 10 million users.
Discord had a hard time finding users in the early days, but the turning point came when one of the founders’ friends wrote a thread about it on Reddit and added a link to the Discord server where the founders were hanging out. And from there it just became a snowball effect.
Watch Jason Citron talking about it:
Today Discord is a giant tech company, especially in its industry—gaming. Discord has grown, it has evolved, it has expanded, and it’s definitely not what it was 10 years ago. Discord now has Quests, apps, and shops. This begs the question: Does Discord make money, isn’t it free? The reality is, Discord DOES make money and here’s how.
Discord Business Model
Discord operates with a freemium business model, allowing users to use the majority of its products and services for free and only charge for a few selected features and items. But as Discord has grown, it has consistently thought of ways to monetize the platform. The product has to make money to sustain the business, right?
Here are the ways Discord makes money through (and how they work):
1. Subscriptions
Subscription is the lifeblood of Discord. Users can use Discord for free, but if they want to get the best out of the platform, they can subscribe to Discord Nitro, which was introduced in 2017. Nitro subscriptions allow users to unlock exclusive features and perks that come with a monthly or annual recurring fee.
There are two tiers of Nitro subscriptions:
Nitro Basic: Costs $2.99 per month
Nitro: Costs $9.99 per month
What’s the benefit of buying a Nitro subscription? Well, if you have a Nitro subscription, you can upload bigger files—50MB to 500MB, create custom emojis, get a Nitro badge on your Discord profile, and many other features.
Here’s the pricing and what you get with Nitro subscriptions:
2. Discord Shop
Launched in November 2023, Discord Shop is a place where users can buy avatars and custom animations that they can use in their Discord profiles. This is a one time purchase the user has to make and keep whatever avatar they buy forever.
Nitro Subscribers get exclusive, early deals on Discord Shop’s products and also get to purchase items that are limited. These avatars and themes are usually priced between $5 to $10 as a one-time investment.
Here’s what the store looks like on Discord:
3. Server Boosts
Many Discord users complain that their servers are buggy and sometimes don't work properly. Discord saw an opportunity and monetized it with what they call “Server Boost.” What’s that? When you, as a server administrator, buy a server boost, your server performance increases and you get to experience better audio and video quality. There are levels of Server boost, starting with $4.99 per month.
Here’s how it works (if the video doesn’t play, watch it here):
4. Merchandise Sales
The beauty of building a community is that you can monetize the users through selling merchandise, and that’s exactly what Discord does to make money. Going beyond online, Discord also ships physical goods to its users who buy their hats, T-shirts, hoodies, sweatshirts, bags, etc.
Check out the Discord store:
5. App Store
Discord helps game developers (companies) integrate their games on the platform. Once the game is on the platform, Discord users can see and play the game. This helps game developers get more users and increase brand awareness, while it becomes a source of revenue for Discord.
If you open the game section on Discord, you’ll see this “Promoted Games” section. This is where Discord makes money from promoting third party games without losing the users from the platform as they can play the game within it.
6. Advertising (New!)
This is going to be the newest revenue model of Discord.
Discord has this feature that they call “Quests,” mainly like games where users have to play or watch games for a specific time, and in reward, they get exclusive perks and unlock bonuses. So to monetize Quests, Discord, on March 20, 2025, announced that they are going to show ads on the Quest games for mobile devices.
In Discord words:
"Expanding our advertising platform to mobile is an obvious, natural evolution in our strategy. Our mission is to create the most authentic, player-centric advertising platform in the galaxy. This expansion will provide brand partners access to Discord's highly engaged, cross-platform mobile audience — and create new opportunities for businesses to connect with our community in meaningful, and performant, ways.” – Peter Sellis, Senior Vice President, Product at Discord.
Discord understands the importance of ads and how powerful they are for the company's growth, business, and economic sustainability. They have long avoided ads, but are now finally giving it a shot to try ads, which is pretty cool.
Well, what other ways Discord make money through? Nothing pretty much. Though they are testing ticket selling. Server administrators can sell tickets for virtual meetings that they host on their servers. But it’s not quite adaptive and successful yet.
Also, Discord has a long partnership with Spotify to help its users listen to music together on the platform. Discord has partnered with Microsoft to help its users play Xbox games without leaving the platform. And Discord has partnered with Sony to let its users enjoy PlayStation while hanging out on the platform. These partnerships and collaborations help Discord make money directly and indirectly.
Discord Financials
To understand how well Discord’s Business Model is working for the company, we need to look at its numbers and finances, because numbers don’t lie, and it’s the only thing that we can trust the most, right?
So let’s examine and see how Discord’s doing number-wise:
Discord has raised nearly $1 billion ($995.4 million) in 16 funding rounds, with its last venture fund secured in 2021, which valued the company at $15 billion. However, half of the total capital was raised in the last round—a total amount of $550.52 million.
Talking about the total revenue the company has generated, the company's revenue has been on an upward trajectory for many years. In 2023, the company generated around $600 million, which, in 2024, reached $879 million, expected to cross $1 billion in total revenue in 2025.
The total registered users have also been going up, accumulating over 600 million registered users as of the latest update in 2024, with the daily active users of around ~29 million and total monthly active users of 200 million. However, Discord’s total paid users aren’t publicly available, but it’s expected to be around 50 million.
DIscord has more than 3,000 employees, with the company headquartered in San Francisco, California. One more interesting thing, Discord founders have said that 93% of Discord users play games.
That being said,
It’s interesting to see where Discord goes from here. The company has raised a ton of capital, is a decade-old company, and is now heading towards the ad-supported model. Will it thrive? I don’t know, no one knows. And that’s what makes the tech industry so fascinating.
Thanks for reading, catch you on the next one.