Tinder distances itself from Metaverse after disappointing results

Dating giant Match Group has announced several changes to its management team alongside disappointing second-quarter earnings. CEO Renate Nyborg revealed that big investments in the metaverse will now take a back seat.

Tinder’s first foray into web3 related research and conversion development was previously envisioned by the executive committee. It unveiled the ambitious “Tinderverse” project after acquiring a video-AI and augmented reality company – Hyperconnect – last year. However, the CEO of its parent company, Bernard Kim, said the online dating app would slow things down, citing “uncertainty” in the space.

Return from Metaverse and Web3

In a letter to shareholders this week, Kim said Tinder has been able to realize the monetization hits it typically delivers. In an effort to improve the overall execution and speed of the application product, the manager assigned the team to carefully evaluate the web3 and metaverse space to understand more clarity.

“I believe a conversion dating experience is important to capture the next generation of users and Hyperconnect is innovating in this area. However, given the uncertainty about the final contours of the metaverse and what will or will not work, as well as the more demanding operating environment, I have instructed the Hyperconnect team to iterate but not invest heavily in the metaverse at this time.”

The Tinder Coins initiative is another initiative that the company plans to phase out. It first introduced the concept of a virtual currency in October 2021. The goal was to encourage users to spend more time swiping, scrolling and then spending real money on the US dating app.

The in-app currency was part of his efforts to create an experience beyond the traditional “swipe right” method. The feature was then released in February this year.

The decision to retire Tinder’s dating ambition and scrap plans to offer in-app Tinder Coins comes alongside the departure of the company’s first female CEO, Nyborg.

Tinder Troubles

Kim attributed Tinder’s second-quarter performance to “disappointing execution across multiple optimizations and new product initiatives.” Shares of the app fell 22%.

It posted a 12% year-over-year increase in total revenue in the second quarter to $795 million, while operating at a $10 million loss due to impairments related to the Hyperconnect acquisition.