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Snap is slowly growing, but it’s banking on augmented reality to sustain it

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But Facebook is also focused on AR

Illustration by Alex Castro / The Verge

Snap’s future depends on how well it builds its augmented reality platform. The company announced in its quarterly earnings call today that it added more users — 7 million in the last quarter — and generated more money, but it’s still unprofitable and lags far behind other social platforms like Facebook and Instagram in terms of user base size. Instagram’s ephemeral Stories product counts 500 million users per day as of January this year, while Snapchat counts 210 million daily active users total.

Still, in his prepared remarks, CEO Evan Spiegel detailed how important AR will be for the company’s future. Spiegel says every daily active user interacts with a Snap AR product nearly 30 times a day on average. These come in the form of AR Lenses and filters that place masks or virtual elements on the user’s face or in their environment. He also notes that the Snap community has created more than 600,000 Lenses.

That sounds like a high figure, but we don’t know how many filters Instagram users have built for its much larger platform. Instagram opened its filter program up to the broader public earlier this summer, and much of Snap’s future success will depend on staying one step ahead of Instagram before its rival’s sheer scale makes competing too difficult.

Spiegel also says the company is looking to integrate AR wearables into its lineup within the next seven to 10 years, starting with its third-generation Spectacles glasses, which the company introduced in August. The glasses come with an added camera so that people can overlay these AR effects on their content, and they go on sale in November.

In the more immediate term, the company says it expects “significant” potential revenue to come from AR advertisements, and it’s focusing on scaling its platform to make AR more personalized and to help the company make money from the technology. Snap has seen success in the past turning AR filters into a viral phenomenon that extends to other social platforms. That was before people started creating filters for Instagram, however, and with Facebook also looking to build AR glasses, Snap will need to move faster and more effectively than its biggest competition if it wants to win as the dominant AR platform.