Tinder has given up on its plans for metaverse dating and virtual currency after its parent company missed analysts’ estimates for first-quarter revenue and profit.
Tinder has backtracked on its plans to create a dating metaverse. The online social app has also canceled its virtual currency, Tinder Token, essentially withdrawing from the Web3 race. The announcement came during the recent quarterly report of its parent company, Match Group Inc (NASDAQ: MTCH).
The social networking service provider reported disappointing Q1 2022 results, with both revenue and profit falling short of estimates.
According to the report, Tinder was the lowest revenue generator per paying user at just $14, while The League brought in the highest figure in the revenue mix at more than $100 per payer.
Tinder launched its metaverse campaign in December 2021, with Tinder CEO Renate Nyborg stating that the company had been discussing the metaverse opportunity internally.
However, after a disappointing quarter, the company is phasing out metaverse along with virtual currency, which Match Group has been testing in recent months. And Nyborg, under whose tutelage the idea was born, will also be stepping down, the company announced Tuesday.
The metaverse is roughly described as a 3D virtual space that allows people to meet and interact with each other in an immersive way. One of the biggest advantages of using avatars in the metaverse to meet people is the ability to remain anonymous, a user of Chinese dating platform metaverse Soul App told the Financial Times in July.
However, like any other social app, monetization is a major challenge for these apps, as most people are more interested in the experiential part of the platform than the monetary one.
Unlike other apps like gaming and retail that can be integrated with utilities to generate more revenue from the blockchain community, dating apps have to rely on premium subscriptions, which is what Match Group refers to in its revenue report what it says Revenue Per Payer.
Match Group CEO Bernard Kim said the decision to scale back the metaverse strategy was driven by the growing uncertainty of what the metaverse actually is, or what it might be, or might not be in the future.
“Given the uncertainty about the final contours of the metaverse and what will or will not work, as well as the more challenging operating environment, I have instructed the Hyperconnect team to iterate but not invest heavily in the metaverse at this time,” Kim said.
Kim’s view on the metaverse appears to be in line with that of Ethereum co-founder Vitalik Butenin, who late last month said that Facebook’s current strategy for the immersive 3D virtual world is likely to fail.
“We still don’t know the definition of the metaverse,” Butenin said, adding that “it’s too early to know what people really want.”
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