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The announcement to halt the Tinder foray into the metaverse came after its parent company acquired global social platform company Hyperconnect.
Online dating service company Match Group (NASDAQ: MTCH), the parent company of popular dating app Tinder, is pulling back from its Metaverse plans. Match Group CEO said the company is withdrawing from its metaverse initiative and halting the Tinder Coins idea. Bernard Kim announced the decision in a letter to shareholders on April 2nd.
While many have unpleasant experiences with Tinder, others have found the love of their lives on Tinder. A lot of people got married to partners they met on the dating site. As a matter of fact, many Gen Zs are the result of Tinder dating.
Tinder in Metaverse Initiative Halts
The announcement to halt the Tinder foray into the metaverse came after its parent company acquired global social platform company Hyperconnect. Match Group purchased the company for $1.725 billion, with 50% paid in cash. The Group paid the concluding 50% with its stock. However, the transaction meant to push Tinder into the metaverse was a huge debt to Match Group. This resulted in disappointing quarterly earnings and ended the idea of Tinder in the Metaverse. During the second quarter, the online dating service company said the operating loss was $10 million and was driven by a $217 impairment of intangibles concerning its Hyperconnect acquisition.
Kim wrote in the letter to shareholders:
“However, 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. We’ll continue to evaluate this pace 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.”
Furthermore, Match Group blamed the mixed quarterly results for withdrawing from the Tinder Coins initiative. The company said it will “do more thinking about virtual goods to ensure that they can be a real driver for Tinder’s next leg of growth.” Match Group recorded total revenue growth of 12% YoY to $795 million.
Tinder CEO’s Departure
The retraction from moving Tinder into the metaverse and scrapping Tinder Coins come along with the exit of Tinder’s CEO. Kim announced Renate Nyborg’s departure in the shareholder letter, noting changes to the management team. While the search for a permanent Tinder CEO begins, he will manage the app’s operations.
Hopes are high that the changes will trigger a rally after losing almost 57% in a year. Since the year started, Match Group has plunged 52.18% and declined 17.74% in the last three months. The company has also dropped 16.66% over the past month, shedding 12.80% in the last five days.
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