Tinder Ditches Metaverse, Digital Coin Plans As Investors Swipe Left

Tinder parent company Match Group has said it plans to temporarily shift its focus away from metaverse and digital token plans, amidst the departure of Tinder chief executive Renate Nyborg and disappointing expectations for the current quarter.

The company’s second-quarter results, announced last Tuesday, saw its share price plummet by nearly a quarter in early trading on Wednesday, before recovering somewhat.

In a letter to shareholders Match Group’s newly appointed chief executive Bernard Kim said a “metaverse dating experience” has the potential to “capture the next generation of users” but that concerns over usability and adoption rate led the company to retreat and reflect.

Metaverse

Match Group acquired Seoul-based video and AR start-up Hyperconnect in 2021 for $1.7 billion (£1.4bn) but Kim said he had instructed the company to “iterate but not invest heavily in metaverse at this time”.

Tinder is also suspending a digital currency called Tinder Coins that it believed could enhance revenue from purchases such as subscriptions, super likes and boost functions.

The offering was piloted in Australia ahead of a planned third-quarter launch, but Kim said this was no longer on the cards after “mixed results” from the pilot.

Match Group is now planning to “take a step back and re-examine that initiative so that it can more effectively contribute to Tinder’s revenue”, Kim said.

Digital coins

Dallas, Texas-based Match Group, whose other brands include Hinge and Plenty of Fish, said it needs 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”.

Nyborg, Tinder’s first female chief executive, becomes the sixth chief executive to leave the dating app since it was founded in 2012.

Her departure comes three months after Shar Dubey stepped down as head of Match Group.

The company said its challenges in the second quarter included a stronger dollar, a drop in paying subscribers for some apps and a slow recovery in some markets.

Slow recovery

Match Group saw surging demand early last year amidst easing Covid-19 lockdowns, but Kim said that since then demand has levelled off.

“While people have generally moved past lockdowns and entered a more normal way of life, their willingness to try online dating products for the first time hasn’t yet returned to pre-pandemic levels,” Kim said.

The company forecast revenue of $790m to $800m for the third quarter, well below analysts’ expectations.

Match said it would also cut back on hiring and marketing expenditure.