Match Group, the parent company of the popular dating app Tinder, says it is cutting funding for Web3-related research and development amid disappointing second-quarter results and the departure of the current Tinder CEO.
In a letter to shareholders on Aug. 2, Match Group CEO Bernard Kim revealed it will scale back its Metaverse investments and scrap plans to release an in-app virtual currency called Tinder Coins.
The move also coincides with the resignation of Tinder CEO Renate Nyborg, the company’s first female CEO who initially made plans to introduce the “Tinderverse” after acquiring a video AI and augmented reality company called Hyperconnect in 2021.
Nyborg had planned for Hyperconnect to further develop its avatar-based “Single Town” experience as a way for Tinder users to meet and interact in virtual spaces in the future.
While Kim didn’t explicitly state the reasons for Nyborg’s departure, he stressed that in recent quarters, Tinder has “been unable to realize the monetization success we usually deliver.”
In his letter, Kim said Match Group would continue to watch the Metaverse space, but would rather wait for the “opportune time.”
“I believe a Metaverse dating experience is important to capture the next generation of users […] However, given the uncertainty about the final contours of the Metaverse and what will or will not work […] I have instructed the Hyperconnect team to iterate, but not invest heavily in [the] Metaverse right now.”
Kim further disclosed that plans to release an in-app virtual currency had also been scrapped on Tinder Coins due to “mixed results” of testing.
“After seeing mixed results from testing Tinder Coins, we decided to step back and re-examine that initiative so that it can more effectively contribute to Tinder’s revenue.”
“We also plan to think more about virtual goods to make sure they can be a real driver for Tinder’s next growth phase and help us unlock the untapped power users on the platform,” he added.
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“We will continue to carefully evaluate this space and we will consider moving forward at the appropriate time when we have more clarity about the overall opportunity and feel we have a service well positioned to succeed.”
The company reported 12% year-over-year growth in total revenue in the second quarter of 2022, to $795 million, in addition to an operating loss of $10 million due to impairment charges related to the Hyperconnect acquisition.
Match Group shares are down 11.39% in the past five days to $63.24 at the time of writing.