Match Group – the holding co of Tinder and Hinge – has decided to step back from the metaverse by cutting down investments for potential projects.
The news comes after disappointing Quarter two results. Match Group is also reshuffling its top-level management. Tinder CEO Renate Nyborg, who joined almost a year ago, will leave the company.
Last year, Tinder forayed into the metaverse dubbed “Tinderverse” under the leadership of Nyborg with the acquisition of Hyperconnect – an augmented reality firm. However, Match Group CEO Bernard Kim, who himself joined just before two months, said Tinder is rolling back on its plans because of economic uncertainty in the space.
“Given uncertainty about the ultimate contours of the metaverse and what will or won’t work, as well as the more challenging operating environment, I’ve instructed the Hyperconnect team to iterate but not invest heavily in metaverse at this time,”
wrote Kim in a letter to shareholders.
“We’ll continue to evaluate this space carefully, and we will consider moving forward at the appropriate time when we have more clarity on the overall opportunity and feel we have a service that is well-positioned to succeed.”
The dating firm also decided to scrap its in-app currency Tinder coins – aimed at encouraging users to spend more on the app – launched last year. According to Kim, the company received “mixed results” from test runs of the initiative, which is why it needs to re-examine.
Match Gurop’s revenues were 22% down Quarter on Quarter. Even though the year-on-year revenue was up 12%, it missed analysts’ estimates. Hyperconnect’s acquisition led to a loss of $10 million. Kim attributed the underwhelming performance to “disappointing execution on several optimizations and new product initiatives.“
Moving forward, the company expects muted revenue growth for the rest of the year. However, it remains optimistic about its execution capabilities to deliver results from next year onwards.