Discord is Changing: What Leaks Tell Us About its IPO and Impact on Users
Discord, the beloved communication platform for gamers and communities, appears to be actively moving towards an Initial Public Offering (IPO). While we’ve known about their ambition to go public since 2024, recent reports from the Financial Times, citing sources, indicate that Discord is “actively talking to banks.” This signifies a clear plan in motion, not just a desire.
But what does this mean for us, the users? Why should we care about these business decisions impacting our daily experience? The answer, perhaps, lies in the beginning of “enshittification.”
1. The Money Problem: Discord’s Achilles’ Heel
From its inception, Discord has faced a core issue: profitability. As a venture-backed tech company, Discord sacrificed short-term profitability to focus on user growth. This might sound insane, but it’s a common business model in tech: burn cash to scale massively, and once you’re huge, generate returns for investors and shareholders either by being acquired or by going public.
Over time, Discord has raised over $1 billion across 17 funding rounds. However, relying solely on Nitro subscriptions and cosmetics isn’t enough to sustain its massive operations and meet investor expectations. This leads to the next step: advertisements.
2. Advertisements: The Key to Discord’s Future?
After a desktop rollout last year, Discord is set to massively expand ads to mobile this June. While we might not like ads, they are undeniably the go-to solution for many companies seeking revenue growth, even for established games like Runescape and some premium streaming services now incorporating them into paid tiers.
Notably, Discord’s ads seem different. They’re branded as “Quests,” offering in-app cosmetics upon completion. This format aims to be “fairly inoffensive” while being highly trackable and results-driven, which is very appealing to brands. Furthermore, Discord holds immense value in reaching demographics traditionally harder to access through conventional marketing channels, boosting its advertising appeal.
3. The Grand Strategy: Becoming Vital Internet Infrastructure
This is the truly unexpected “chess move.” Discord isn’t just content with being a “nice-to-have” social app; it wants to become essential internet infrastructure.
They’ve introduced the Discord Social SDK (Software Development Kit). Simply put, it’s a complete, off-the-shelf social system that allows game developers to integrate friends lists, game invites, text chat, and voice chat directly into their games, without requiring a Discord login. All these social features will be run on Discord’s backend.
Games like Rust, Splitgate 2, and TheoryCraft Games are already in early access with this SDK. Unlike social features tied to platforms like Steam or Battle.net, the Discord Social SDK can be ubiquitous and cross-platform. Considering hundreds of millions already use Discord, users might even actively request developers to use this system.
This strategic move aims to transform Discord from just “having users” to “running digital infrastructure,” thereby demonstrating immense growth potential to investors and paving the way for a successful IPO.
4. The Worry of “Enshittification” and the Harsh Reality
When a company goes public, everything becomes exposed, and investor pressure for returns intensifies. For a “growth stock” like Discord, this means constantly demonstrating excellent execution and dangling a “juicy new carrot” every quarter to tell a story of transformational growth. The SDK strategy and ad expansion are direct results of this growth narrative.
It also implies a deepening of leverage over users. If Discord runs your game’s social network and your friend groups, it becomes incredibly hard to leave. Even if you personally want to, convincing all your online friends to migrate to another platform is a monumental task.
Should earnings falter or growth slow, companies often resort to aggressive short-term cost-cutting or more intrusive monetization schemes. While Discord’s current ad design is relatively “thoughtful,” this “thoughtfulness” might be sacrificed under intense investor pressure post-IPO.
5. A Reality Check: Discord is Still Incredible
We must acknowledge that, compared to the days of Ventrilo or Xfire, Discord is essentially a piece of magic. It offers so many features, mostly for free, which is incredible. Slack’s cheapest offering is £7/month, Teams is £3.10/month, yet Discord scaled to such a massive size while remaining free.
The dilemma is this: users demand free services, yet broadly hate ads. If users directly pay for software, developers can focus on features and user experience. But if users demand free, companies are forced to explore other monetization models like ads and SDKs to satisfy the “line must go up” growth narrative.
Discord’s very existence hinges on the massive investments from venture capital, which ultimately need to be cashed out through a big IPO or acquisition payday. This means its development must feed into a growth narrative, and that is the recipe for enshittification.
I hope Discord gets this right. What they’ve built is a genuinely incredible piece of software and service. It would be sad to see it go wrong.
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