The dating app has cold feet after experiencing a dismal second financial quarter.
Operating at a $10 million loss has Tinder rethinking its burgeoning relationship with the metaverse. As The Verge and elsewhere report, the dating app’s parent company, Match Group, recently announced a dramatic reversal from its previously announced plans for an expanded “Tinderverse.” The digital space would have purportedly included virtual reality meetups, video chats, and an AR experience dubbed “Single Town.”
The news follows an abysmal second financial quarter report, part of which is already being blamed on last year’s acquisition of the metaverse tech company, Hyperconnect. Match closed a $1.7 billion deal with the South Korean startup in June 2021, but has had little to show for it in the ensuing months.
“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,” Match Group CEO Bernard Kim wrote in the company’s earnings report, adding, “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.”
Tinder’s metaverse project is on hold for now
The news was announced in a letter to shareholders of MatchGroup, the group owning the Tinder brand. Bernard Kim announces the departure of Renate Nyborg, the previous CEO, and details the new organization of the company as well as its new priorities.
And the metaverse is no longer part of it, if we are to believe a terse explanation from the new CEO:
I believe a metaverse based on dating experiences is important for capturing the next generation of users. […] But the uncertainty regarding the contours of the metaverse , and its ability to work or not, led me to ask the Hyperconnect teams […] not to invest heavily in the metaverse
Hyperconnect was acquired by Tinder in 2021 to develop new features related to augmented reality and artificial intelligence. A metaverse – called Single Town – was previously in preparation.
Bernard Kim clarified that he asked the teams to continue to evaluate the metaverse domain and that Tinder plans to get back to it “ when we have clarified the global opportunities ”. Translation: Tinder doesn’t think the metaverse has proven itself enough to invest heavily.
Discontinued Tinder Coins
Another change of course: the company is abandoning its “Tinder Coins” , a virtual digital currency that it had started testing in the application. The CEO explains laconically that the latter would not generate the expected income:
The results of Tinder have indeed been less good than anticipated, and the company is therefore slashing certain initiatives in order to raise the bar.
We feel here the ambivalence that companies still have regarding the metaverse and associated technologies. They want to capitalize on the new opportunities represented, but the still uncertain definition of this sector, which is very young, may cause some to hesitate.