Virtual reality has the potential to upend the future of dating. In this clip from “The Virtual Opportunities Show” on Motley Fool Live, recorded on March 15, Motley Fool contributors Rachel Warren and Demitri Kalogeropoulos discuss the new idea of digital dating within the metaverse and how the leading company in the space is responding.
Rachel Warren: I saw this interview with the Chief Product Officer for Match basically talking about how VR could be the next big thing in dating. One of the hurdles that you have when you use a dating app is trying to find someone that I’m compatible with. Is this someone that I actually want to hang out with and get to know better? What the Product Officer was basically saying was that VR could really have this real world use case where, instead of your face timing or you meet up, you play ping pong with your avatars [laughs] in this VR world, and that’s how you get to know someone. It was interesting, the idea that whole relationships will be conducted online is dystopian. But, to me, VR has real potential to solve that cold-start problem where, instead of having to slip on cameras and suddenly you’re staring at my face and I’m seeing yours, we can be our avatars and play ping pong in VR together. He also continued, “I would argue that’s actually a much better way to determine compatibility i.e., making conversation while you do something together and, arguably, that could also be a safer way to do it if you’re meeting someone for the first time.” I was fascinated by this. The fact that they’re launching this virtual goods-based economy within Tinder and this new explore section. Then, they’re also exploring this VR piece. It’s super fascinating. Match Group, as a whole, had a pretty good year in 2021. Tinder still comprises the lion share of the company’s revenue, and Tinder revenue alone was up 22% in 2021. And, emerging apps were up 91% year-over-year revenue from those. One of those includes Hinge, I believe, and then established apps like Match, Plenty of Fish, or OkCupid, revenue from those apps was up 5% year-over-year, and overall revenue was up 25% compared to 2020. Really interesting. I think it’s fascinating that you have companies like Match Group that are seeing real opportunity within VR, within this new virtual economy space, and how to monetize that, but also to enhance experiences for users, so really fascinating and I think something to watch.
Demitri Kalogeropoulos: Match is also a very profitable business too. Like you mentioned, sales were up 22% last year, but also operating income adjusted earnings, so this is before taxes and stuff. On their revenue of about $3 billion, they got $1.1 billion in adjusted earnings. That’s a pretty impressive figure. I know a lot of people don’t pay for it. It’s a little surprising for me to think about that when most of your members maybe don’t pay for the app. But, I guess they’ve got digital advertising and they’ve got a subset that pays for the service a lot. That’s pretty impressive stuff.
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