I actually disagree that Discord doesn't have a functional business. They have massive growth and many many top teams, streamer personalities etc use their services.

If Discord becomes a critical component to the content creators of the whole gaming ecosystem, there's going to be plenty of revenue opportunities.

As I just said, and you confirmed: Discord doesn't have a functional business. Discord currently makes no money. "Opportunites" are just that, opportunities. A lottery ticket is an opportunity, but it is not a business.

Discord promises it will always be free with "no gotchas". It specifically notes no "slot limitations" as an example of that, which indicates premium tiers are unlikely. They promise to never charge for core functionality. Presumably they may be able to do some sponsored promotion of some sort, but banner ads are probably out.

The revenue plan they mention is here: "In the future there will be optional cosmetics like themes, sticker packs, and sound packs available for purchase." And I have not ever seen an emoji pack for a chat service as an appealing sales item that's going to fund a startup. I'm super skeptical of this, and it's why I don't use it.

But, it'd make a solid acquisition for a company like Twitch that has a shoddy/simple chat function and needs something better in the gaming space.

LINE made $268 Million from just stickers last year http://qz.com/704768/line-sold-268-million-worth-of-stickers...

If Discord can keep up the growth, things like stickers, emojis, and sound packs could pull in good revenue. Also, the gaming community is already used to paying for these items on sites like Twitch

I will stand corrected, with this excellent example.

God, I'm so disconnected with current millennial trends, I had to lookup what those stickers were.

I'm a millennial and haven't heard of them until now.

Everyone likes to keep coming up with new names for the word "emote".

I'm actually a millennial too, I just don't give a damn about all these new apps that are reinventing irc for the tap/swipe people.

I have to admit, Slack and Discord are much nicer to use than IRC - even something like IRCCloud (and I'm a relatively happy paying customer of IRCCloud).

It's probably due to location. LINE is absolutely dominant in Japan, Taiwan, Thailand and a few other Asian markets. None of my friends in America use it really. Facebook messenger is clearly watching LINE closely though.

>Also, the gaming community is already used to paying for these items on sites like Twitch

But I have a "global twitch emote" plugin on chrome so I presume kappa will already show up for me if used in discord?

Why would a chrome plugin affect a totally separate application?

It's not really totally separate. Discord is a web app and you can run it in chrome. The only feature that you lose is push-to-talk, last I looked.

Granted, a lot of people will run the electron-based desktop app (which packages the web site), but IIRC, there's a plugin for twitch emotes for it too.

> And I have not ever seen an emoji pack for a chat service as an appealing sales item that's going to fund a startup.

You underestimate gamers as a market. Valve's built a thriving business on virtual hats. Twitch sells access to premium emotes and a wider range of username colors as a subscription upgrade. "Cosmetic purchases" are huge.

Discord could also do what Twitch does and let streamers offer recurring donation options to their fanbases, in exchange for perks like being able to talk during restricted times (eg. during large streams) and custom community-specific stickers.

I'm not that sure about Valve. What they actually have for hats now is a system that withdrawals short of casino — you can't buy the thing you want, instead, you buy a "crate" that may (randomly) contain it, or other item.

My thinking is that hats aren't that profitable without these kinds of tricks, and Steam effectively sponsored everything that happened at Valve before they implemented "gambling".

I get where you're coming from, but this is definitely not the case. Valve recently banned all gambling sites from using their APIs, so they're all shut down by now.

And if you refer to crates of random items as gambling, they've also filled in that gap with the Steam Marketplace where you can buy individual items for market-dictated prices from other Steam users, where Valve takes a portion of the money the items are sold for.

This business is extremely profitable. Looking at their game Dota 2 for example where they recently hosted the world's largest e-sports tournament, where the pricepool were completely funded by the players of Dota 2 through in-game virtual items. This pricepool were over $20,000,000 USD, funded through in-game purchases where 25% of the items price would go to the pricepool, and the rest would go to Valve. That is $60,000,000 USD that Valve profited in the span of two months, for one of their games, in one of their tournaments. Valve hosts 4 tournaments per year for this game.

Looking at the pricepool of their previous tournaments ( http://www.esportsearnings.com/tournaments ), we can see that this amount just keeps increasing year after year.

My point is that what Valve does with in-game items is similar to what certain mobile games do with time/pay-walls and how casinos exploit certain aspects of our psychology. And if you do not practice this "shady stuff", it is not that profitable…

# Crates

Crates or doubling, tripling, etc. item's cost. Say I want a certain hat, on average, I'll need to pay multiple times (crate contains 5 other items, but successive crates do not yield duplicates in most recent Dota 2 versions, so worst case you pay 6 times a price).

# Steam Marketplace

Adds at least 30% to item's cost, since you buy with real-world dollars, but sell for "Valve Dollars" (only usable in Steam, no withdrawals), this is effectively paying more for a single item (at least 30% more expensive which is Valve's margin for Steam purchases of non-Valve titles).

In addition, Valve makes purchases non-tradable via Marketplace for a period of time (multiple months, usually) since original purchases for "preventing fraud". I see it as "incentivising gambling with crates", though.

# Third-party site

These were probably shut down because they involved real money, so Vavle could be potentially helping organise casino/bookmaking businesses from legal standpoint. It's all fine with Steam Money from marketplace.

So, yes, it is extremely profitable, probably orders of magnitude more profitable than "honest" selling where transaction is "pay money, receive item".

# Regarding TI

It is incredible how much money it made. It is as incredible as how Valve decided to split matchmaking pool for months with International Ranked to boost prize pool, so you had to pay $10 to go into faster queue.

You do realise it is completely backwards, right? The crates were first to arrive, only after that the real money market came along. Sure, the boxes themselves were a little scammy, but it was not like it meant anything gameplay wise, unlike most of in-game purchases ever - where you have to continually feed money to be able to keep up

Not sure what you mean by "real money market", Steam Community Market? Or ability to put in money for creates in TF2? Because in TF2 you first would randomly receive items for just playing or achieving certain goals. Then they added creates which would also randomly drop and you'd need to buy a key to unlock some random stuff inside. Not sure on current situation, haven't played for years now.

In the beginning of Dota 2, you were able to buy item directly, now you either need to go to Commumity Market, or buy crates from Valve. Check out dota2.com/store — there is either half a year old sets, or crates for new ones. Even older items are not in the shop and I believe w/ever you unlock from crates is not tradable for quite some time.

Correct me if I'm wrong, but there seems to be no way to buy particular items directly, at least not newer ones. (Exceptions are $30+ arcana quality sets which bring a lot of money as they are, so no need to increase price with "gambling".)

You can generally buy the majority of items you want directly and it's often actually cheaper than buying 200 crates to get some item with a 0.5% chance.

Check out TI treasures. There are only crates. No?

You should check out LINE. Same business model, absolutely huge.

I guess I don't know what you mean by functional business. For me they have built an incredibly valuable asset that has grown enormously and will probably continue to do so.

Amazon is another company with opportunities to make profit, but they traditionally haven't done much of that, eschewing that for just growing value.

In the years when Amazon was not turning profit, would you consider it a non-functional business?

I don't see how they're going to extract enough revenue to keep the lights on and pay the staff. This isn't the same as Amazon reinvesting money that would otherwise be profits.