Snap Says AI Virtual Try-On Helped Kill Augmented Reality Unit

Snap is shutting down its six-month-old augmented reality (AR) for enterprise services unit. 

“Several things have changed since we first began pursuing our AR Enterprise strategy,” Snap CEO Evan Spiegel wrote in a message to employees Wednesday (Sept. 27).

“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,” Spiegel said. 

In addition, Spiegel wrote, the rise of generative AI has made it easier for companies to create virtual try-on tools, making it tougher for Snap to stand out. 

And lastly, he said, “our business performance has reduced our capacity to invest in this incremental opportunity” as the company focuses on its core ad business. 

Snap debuted its AR Enterprise Services (ARES) unit in March, giving businesses the opportunity to integrate the social media company’s AR technology into their own apps, websites and physical locations.

“We believe that AR — digital content overlaid on the real world — represents a profound technological paradigm shift that is going to significantly impact businesses across nearly every industry, and that companies and brands that adopt a winning AR strategy will enjoy a meaningful competitive advantage in the years to come,” the company said at the time.

As PYMNTS wrote in June, a number of solution providers, including tech giant Google, are fighting for supremacy in the virtual try-on space. Google debuted its solution in June.

“However, the question remains: How can other players compete with giants like Google?” that report asked.

In an interview with PYMNTS, Wayne Liu, chief growth officer and president of the Americas at AR company Perfect Corp., offered this idea: “We’re going very deep to go very broad.”

Among Perfect Corp.’s focus is the advancement of AI technology and the integration of AI GC (artificial intelligence with generative content) capabilities. 

The company also plans to broaden its horizons and extend its presence into the fashion industry, leveraging its expertise to delve into accessories, jewelry and apparel. 

“The objective is to fortify the technological infrastructure by addressing previous constraints and catering to the varied requirements of fashion-savvy customers,” PYMNTS wrote.