Match Group, the parent company of popular dating app Tinder, says it is cutting funding for Web3-related research and development amid disappointing second-quarter earnings and the departure of Tinder’s current CEO.
In a letter to shareholders on Aug. 2, Match Group CEO Bernard Kim revealed that it will scale back its investments in Metaverse as well as scrap plans to launch an in-app virtual currency called Tinder Coins.
The move also comes alongside the resignation of Tinder CEO Renate Nyborg, the company’s first female CEO who originally planned to introduce the “Tinderverseafter acquiring a video-AI and augmented reality company called Hyperconnect in 2021.
Nyborg had planned for Hyperconnect to further develop the avatar-based “Single Town” experience as a way for Tinder users to meet and interact with each other in virtual spaces in the future.
While Kim did not specifically state the reasons for Nyborg’s departure, he emphasized that Tinder “has not been able to realize the monetization success that we typically deliver” in recent quarters.
In his letter, Kim said Match Group would continue to monitor the Metaverse space, but would prefer to wait for the “right 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 won’t work […] I have instructed the Hyperconnect team to iterate but not invest heavily [the] Metaverse right now.”
Kim went on to reveal that plans to launch an in-app virtual currency, Tinder Coins, had also been scrapped due to “mixed results” from testing.
“After seeing mixed results from testing Tinder Coins, we decided to take a step back and re-examine this initiative so it can more effectively contribute to Tinder’s revenue.”
“We also plan to think more about virtual goods to ensure they can be a real driver for Tinder’s next leg of growth and help us unlock untapped power users on the platform,” he added.
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“We will continue to carefully evaluate this space and consider moving forward at the appropriate time when we have more clarity on the overall opportunity and feel we have a service that is in a position to succeed.”
The company reported a 12% year-over-year increase in total revenue in the second quarter of 2022, reaching $795 million, alongside an operating loss of $10 million due to impairments related to the acquisition of Hyperconnect.
Match Group stock is down 11.39% over the past five days to $63.24 at the time of writing.