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Match Group CEO Not Ready for Full Metaverse Commitment

Tech
0 min read


Image Credit: Russ Seidel (Flickr)


Is a Metaverse Presence or Product Becoming Less of a Priority for Businesses?

Match Group CEO told Tinder metaverse unit he wants to stay in touch; he has a lot going on right now; that funds are tight, and until we meta again. While he sees a future with the metaverse, there are other units the company has a greater interest in, so it’s not ready for a full commitment.

A number of tech companies had the exact right product for consumers to better adapt to lockdowns during the pandemic. Many of these companies may have gotten ahead of themselves, planning for the lockdown lifestyle to continue strong. Examples include Meta (Meta), which announced last week that it may change its strategy and lay off staff, Peloton (PLTN), which announced in July it will exit all in-house manufacturing and instead outsource more to Taiwan, online retailer Amazon (AMZN), which shrank workers by 100,000 last quarter, and Robinhood (HOOD) which also announced cutting back on staff and growth plans.

Match Group (MTCH) owns dating apps Match.com, Tinder, and Hinge. The CEO, Bernard Kim, cited economic uncertainty as a reason for its pulling its planned investment in Hyperconnect, the company’s metaverse initiative. Bernard Kim discussed these plans in a letter to shareholders dated August 2.

Mr. Kim wrote that he scaled back on Hyperconnect as the company would be reducing its metaverse ambitions. Tinder acquired Hyperconnect last year. The division focuses on video, AI, and augmented reality technology. Its avatar-based “Single Town” experience was planned to be a meeting place in the metaverse for Tinder customers. 


Source: Match
Group Letter to Shareholders (August 2, 2022)

Kim has only been the CEO for 62 days (as of the date on the shareholder letter). He shared that as he settles into the role and shapes the culture of the various divisions, taking advantage of the easier growth potential from lower hanging fruit should come before other priorities. Referring to a slowdown in domestic growth, Kim explained, “Although the overall market opportunity remains substantial, the current environment is presenting some unique trends related to consumer behavior. 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.”  We are still seeing higher engagement from pre-existing users compared to before the pandemic.” He said he’d challenge staff to make increase the rate of first-time users. 

The company sees the largest untapped market opportunity in the Asia Pacific region as well as parts of Europe. One current headwind is the rise in the dollar vs. other currencies.

Take Away

Match Group expects the metaverse dating experience is important to capture the next generation of Users. The Hyperconnect division (purchased by Tinder last year) has been innovating in the virtual world. 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,” the company is not ready for a full commitment. Kim said, “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.

Paul Hoffman

Managing Editor, Channelchek

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Sources

https://s22.q4cdn.com/279430125/files/doc_financials/2022/q2/Earnings-Letter-Q2-2022-vF.pdf

https://www.cnbc.com/2022/07/12/peloton-to-outsource-all-manufacturing-as-part-of-its-turnaround-efforts.html

https://news.crunchbase.com/startups/tech-layoffs-2022/

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