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Snap pulls the plug on its AR Enterprise business

Snap has announced that it is winding down its AR (Augmented Reality) Enterprise business. Today, in a blog post, the company shared the CEO’s note sent to employees at Snap updating them about the changes.

According to Snap Inc. CEO Evan Spiegel, maintaining and growing the AR Enterprise business offering for retailers would consume significant investments that the company cannot do. He mentioned that there have been several changes (and challenges) in pursuing the AR Enterprise business. These include strong competition from companies offering generative AI to keep customers engaged, huge investments needed to support the technology, and an overall refocusing of resources towards the advertising business. Spiegel added:

“Several things have changed since we first began pursuing our AR Enterprise strategy. First, we believed that we could primarily leverage our existing mobile AR technology. Over time, we also learned that we needed to invest incrementally to support web-based augmented reality which is both technically complex and less-engaging for our customers.

Second, the advent of generative AI has made it easier for companies of all sizes to create try-on experiences for their customers and made it harder for us to differentiate our offering. Third, our business performance has reduced our capacity to invest in this incremental opportunity as we have had to focus our resources on our core advertising business.

Despite this, the CEO mentioned that Snap will continue investing in their CameraKit partners and the millions of users that use platforms powered by the company’s augmented reality experiences. Additionally, the news update mentions that Snapchat has found new opportunities for its Sponsored AR business that promotes branded content to users on the platform.

While Snapchat reassured that some members of the AR Enterprise team would continue their journey with Snapchat to support CameraKit, Sponsored AR advertising, and the more than 250 million people who engage with AR every day on Snapchat, 170 members will no longer be a part of the company.

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