Snapchat parent company Snap Inc. (NYSE:SNAP) today announced a slew of new platform features that drove its stock price up nearly 5 percent.
The headliner feature is called ‘Snap Games’, and it will work similar to the Instant Games found within Facebook’s (NASDAQ:FB) Messenger. Games will be relatively simple HTLM5 games, and there will even be some slimmed-down battle royale-style games to appease fans of Fortnite and Apex. The move should help increase the average amount of time its users spend inside of the app which should offer more opportunities for ad-clicks.
Perhaps even more important to the company’s actual bottom line will be the ‘Snap Audience Network’. Snap aims to sell ads that will appear in other apps that may not have the resources to integrate and sell ads to 3rd parties. Snap would market this to apps as an easy, all-in-one ad service, complete with full screen vertical ads, and would receive a cut of the revenue generated.
The Snap Audience Network was announced as launching in the coming months.
Snap announcements come at a crucial time for the company
The host of announcements, also including new augmented reality features and new original video content, couldn’t come at a better time for Snap Inc.
In short, they’ve had an extremely rough time since bringing the company public in 2017. Perhaps the most worrying thing investors have been watching is the combination of Snapchat’s stalling user growth and its poor monetization per user. Facebook earns about $7 dollars per user, Snap struggles to make more than $2 per user.
And Snapchat has fewer users than what was once hoped-for. Snap’s user count has seemingly leveled off from an all time high of around 191 million. Once Instagram launched it’s stories feature, user count actually began to drop. Q2 2018 saw 3 million users leave the platform and Q3 2018 saw a further 2 million leave. The final quarter of 2018 saw user count remain flat and the company ended the year down 9 million from the beginning of the year.
It wasn’t just about user count in 2018 for the company, either. Some key celebrities went on strike against the app, causing the stock to plummet on multiple occasions. Then the company rolled out a disastrous UI update that was almost universally panned – there was even a petition with over a million signatures begging for the company to revert the update! As if things weren’t bad enough, only days into 2019 and the company was rocked by the high-profile departure of its CFO which sent shares tumbling even further.
Make no mistake, this is Snap’s last ditch effort to really turn the company around. Shares of Snap are worth less than half of its 2017 IPO price, and the trend over the last 18 months has been consistently sloped downward. Wall Street just hasn’t been able to place faith in a company that has struggled so much to show the viability of its long term business plan. Again, poor per-user revenue and stagnating user growth rates are a recipe for disaster in the social media world, and something quite simply had to be done.
Only time will tell if the addition of its new ad-tunneling service, and the newly launched Snap Games will be enough to flip things back into the positive for the company that once boasted the highest growth rates in the industry!
The post Snapchat Announces ‘Snap Games’ And Other New Features, Shares Rise On News by Shaun Williams appeared first on Wccftech.
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