Discord starts down the dangerous road of ads this week

Discord had long been strongly opposed to ads, but starting this week, it’s giving video game makers the ability to advertise to its users. The introduction of so-called Sponsored Quests marks a notable change from the startup’s previous business model, but, at least for now, it seems much less intrusive than the ads shoved into other social media platforms, especially since Discord users can disable them.

Discord first announced Sponsored Quests on March 7, with Peter Sellis, Discord’s SVP of product, writing in a blog post that users would start seeing them in the “coming weeks.” Sponsored Quests offer PC gamers in-game rewards for getting friends to watch a stream of them playing through Discord.

The goal is for video games to get exposure to more gamers, serving as a form of marketing. On Saturday, The Wall Street Journal (WSJ) reported that it viewed a slide from a slideshow Discord shows to game developers regarding the ads that reads: “We’ll get you in front of players. And those players will get you into their friend groups.”

WSJ reported on Saturday that Sponsored Quests “will become part of the platform beginning” this week. Sellis told the publication that Discord will target ads depending on users’ age, geographic location data, and gameplay. The ads will live on the bottom-left of the screen, but users can disable Sponsored Quests in settings.

Discord already tested the ads in May with Lucasfilm Games and Epic Games. Discord users were able to receive Star Wars-themed gear in Fortnite for getting a friend to watch them play Fortnite on PC for at least 15 minutes.

Jason Citron, Discord co-founder and CEO, told Bloomberg in March that the company hopes that one day “every game will offer Quests on Discord.”

Discord used to be anti-ads

It may be a nuisance for users to have to disable a new setting that they didn’t ask for, but it should bring long-term users at least some comfort that the ads can be removed. However, it’s unclear if Discord may one day change this. The fact that the platform is implementing ads at all is somewhat surprising. Discord named its avoidance of advertising as one of its key differentiators from traditional social media platforms as recently as late January.

In March 2021, Citron told WSJ that Discord had eschewed ads until that point because ads would be intrusive, considering Discord’s purpose of instant back-and-forth communication and people’s general distaste for viewing ads and having their data shared with other companies.

“We really believe we can build products that make Discord more fun and that people will pay for them. It keeps our incentives aligned,” Citron told WSJ at the time.

That same year, Citron, in response to a question about why being ad-free is important to Discord, told NPR: “We believe that people’s data is their data and that people should feel comfortable and safe to have conversations and that their data is not going to be used against them in any way that is improper.”

Sponsored Quests differs from other types of ads that would more obviously disrupt Discord users’ experiences, such as pop-up ads or ads viewed alongside chat windows.

A tight-rope to walk

Beyond Sponsored Quests, Discord, which launched in 2015, previously announced that it will start selling sponsored profile effects and avatar decorations in the Discord Shop. In March, Discord’s Sellis said this would arrive in the “coming weeks.” Discord is also trying to hire more than 12 people to work in ad sales, WSJ said Saturday, citing anonymous “people familiar with [Discord’s] plans.”

In 2021, Discord enjoyed a nearly three-times revenue boost that it attributed to subscription sales for Nitro, which adds features like HD video streaming and up to 500MB uploads. In March, Citron told Bloomberg that Discord has more than 200 million monthly active users and that the company will “probably” go public eventually.

The publication, citing unnamed “people with knowledge of the matter,” also reported that Discord makes over $600 million in annualized revenue. The startup has raised over $1 billion in funding and is reported to have over $700 million in cash. However, the company reportedly isn’t profitable. It also laid off 17 percent of staffers, or 170 workers, in January.

Meanwhile ads are the top revenue generator for many other social media platforms, such as Reddit, which recently went public.

While Discord’s first real ads endeavor seems like it will have minimal impact on users who aren’t interested in them, it brings the company down a tricky road that it hasn’t previously navigated. A key priority should be ensuring that any form of ads doesn’t disrupt the primary reasons people like using Discord. As it stands, Sponsored Quests might already put off some users.

“I don’t want my friendships to be monetized or productized in any way,” Zack Mohsen, a reported long-time user and computer hardware engineer based in Seattle, told WSJ.