Match Group, the parent company of the popular dating app Tinder, announced a reduction in investment for Web 3.0 research shortly after releasing poor Q2 financial results.
Match Group CEO, Bernard Kim, announced that Tinder CEO Renate Nyborg, who became the dating app’s first female CEO just last September, is set to leave after less than a year at the helm.
Disappointing revenue and profits
The social networking service provider reported disappointing Q2 2022 results, with both revenue and profit falling short of estimates.
According to the report, Tinder was the lowest revenue generator per paying user at just $14, while The League brought in the highest figure in the revenue mix at more than $100 per payer user.
Tinder launched its metaverse campaign in December 2021, with Tinder CEO Renate Nyborg stating that the company had been discussing the metaverse opportunity internally.
However, after a disappointing quarter, the company is phasing out metaverse along with Tinder Coin, the virtual currency which Match Group has been testing in recent months.
What’s in store for the future?
In a letter to shareholders on the 2nd of August, Match Group CEO Bernard Kim revealed that they would scale back their metaverse investments and scrap their plans to issue Tinder Coin, the platform’s digital currency.
Giving details about the Tinder Coins, Kim noted that the first test saw mixed reactions from users. With this, the company will continue to work on the virtual currency and look for ways that will benefit both the company and its users.
Previously, Tinder CEO Renate Nyborg revealed about Tinderverse after acquiring AI and augmented reality company Hyperconnect in 2021. This metaverse offers an exciting experience and a playground for Tinder users to meet and communicate.
Kim mentioned that they are also looking into virtual goods to help them increase the platform’s growth by appealing to the wants of the new users. Tinder suffered a massive USD $10M loss due to the acquisition of Hyperconnect, while its parent company’s stock suffered a massive 11% fall to trade at $63.5. Presently, Match Group Inc (NASDAQ: MTCH) is trading 63% away from its all time highs.
In the letter, Kim said Match Group would continue to monitor the metaverse space but want to wait for the right time, and the company will continue to evaluate this space with caution:
“After seeing mixed results from testing Tinder Coins, we’ve decided to take a step back and re-examine that initiative so that it can more effectively contribute to Tinder’s revenue. We also intend to do more thinking about virtual goods to ensure that they can be a real driver for Tinder’s next leg of growth and help us unlock the untapped power users on the platform.”
Bernard Kim
Kim noted that although the firm sees the major benefits of the metaverse at this period, it is not a good time to venture into the space. However, the CEO also pointed out that they will continue to monitor the metaverse space and will wait for the right time before delving into it.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
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