Snapchat’s big new augmented reality feature is letting creators make money

Augmented reality isn’t really a thing yet. But you know what is? Face lenses. Millions of users across Snapchat, Instagram, Zoom, TikTok, and countless other apps are already used to tapping a button and having dog ears suddenly attached to their skull, rainbows fired out of their mouth, or their makeup subtly — or not so subtly — transformed into a new style. Most users don’t think of this as AR or view these features as evidence of some revolutionary new technology. But whether you call it lenses, filters, or something else, it’s all augmented reality.

At its Lensfest developer event this week, Snap announced that it now has more than 300,000 developers building AR products for its platform and that together, they’ve built more than 3 million lenses that have been viewed a staggering 5 trillion times. All those numbers are up over a year ago, and for Snap, they’re proof that AR is already finding some product-market fit.

Snap’s big news at this year’s Lensfest is all about monetization. Snap is working with some creators to build lenses that include buyable digital goods — think in-game items, upgraded lens control, that sort of thing — that users can purchase with Snap Tokens. The plan borrows ideas from the in-game economies of platforms like Roblox and Fortnite, with just a dash of the NFT craze. Either way, Snap’s hoping it helps developers make money now and incentivizes them to keep building going forward. “We’re very optimistic that this will create more opportunities for Snapchatters to pay for the value that they’re getting in our experience,” Snap CTO Bobby Murphy says, “and then also motivate even more investment and time and effort and increase the level of quality around use cases.”

Translation: AR is good. It’s going to get better. But it’ll only get big if it’s also a big business. 

A new money-making tool may sound like small-stakes stuff in the evolution of AR, but it’s a key bet for Snap. Nobody knows the power of an ecosystem better: from disappearing messages to Stories to Bitmoji to lenses, Snap has a well-earned reputation as the R&D department for other tech giants, which then copy Snap’s ideas and give them to a larger audience and a more lucrative developer ecosystem. With AR, Snap is determined not to let the cycle repeat itself. That means building the product and the business before someone else does.

Building an AR business is crucial for Snap’s long-term prospects, too. The company knows that face lenses on a smartphone are not the final form of AR — the long-term vision for augmented reality involves dedicated glasses, always-on experiences, and software that understands exactly what you’re looking at and what you might want to do with it. “If I do choose to put a piece of hardware on my face,” says Qi Pan, Snap’s director of computer vision engineering, “it has to be adding value to my life almost every minute that I’m wearing it; otherwise, I will choose not to do it.”

That’s a high bar, and nobody’s close to clearing it. Murphy says he’s confident the company will get there, though. “This future that has felt super far away for many years actually feels closer than I would have even guessed several years ago,” he says. Snap’s latest version of Spectacles has been in developers’ hands for more than a year now, and while it’s still a primitive gadget — with big battery life and overheating issues and a relatively low resolution and small field of view — Murphy says he’s seen enough to convince him that Snap is on the right track. 

If Snap wants to see its vision through, though, it has to be right both about the 10-year plan and how to get from here to there without killing the company in the process. Long-term bets take time, and the current economic moment, in particular, doesn’t really allow that: Amazon has had to make cuts to Alexa because it can’t figure out how to monetize its voice assistant, Meta’s decade-long metaverse bet has played a role in tanking the company’s stock price, and even Snap has had to cut back on some of its more exploratory projects like the flying Pixy drone. Inventing the future is expensive and risky, even in the best of times, and these are not the best of times.

Figuring out how developers can make money goes hand in hand with another big question facing Snap and the whole AR industry: how is AR supposed to, you know, work? So far, there are only a few things the industry seems to know for sure. Face lenses are a winner. So is virtual try-on, which lets you see how everything from sunglasses to couches will look before you buy them. People are starting to use AR to get more information on a monument or statue or painting in a gallery. But ultimately, just as the smartphone spawned entire new industries and human behaviors, AR will eventually change in ways nobody expects.

In the near term, real-world interactions seem to be at the top of Snap’s list. Snap has made no secret of its disdain for the metaverse and its belief that improving rather than replacing the real world is the way forward. “Part of the reason we’re so excited about the future of AR is because it opens up to the camera,” says Sophia Dominguez, Snap’s director of AR platform partnerships. “It’s leveraging the camera to enhance the world around you, not take you somewhere else.” 

Murphy also says he thinks Snapchat’s Scan feature has huge potential as a visual, real-world search engine along the lines of Google Lens and that as Snap gets better at understanding users and the world, it can learn to offer that information more proactively (and, presumably, ads and shopping opportunities, too). 

The company is working on building maps of the world so users can interact with practically any object anywhere through their smartphone camera. The company has detailed, interactive maps of some landmarks and cities already, and Pan says that as more people share photos and livestreams, things will get better fast. “If a car moves from one place to another, you’ll be able to update and generate the model so you can really have these live experiences that are interacting with the whole world,” he says. Snap is working on ways to make it easier for users to scan spaces, too, so you can map your own world on the fly.

AR is, for now, almost entirely a phone-based experience, but a wearable revolution could change both what works and how. Murphy says obviously glasses will change things, both in frequency of use and in the UI — how should things work when you have both hands free, for instance? But he says he’s confident people will want the same things from AR no matter the hardware. “People are opening up Snapchat and the camera like 10-plus times a day,” he says. “That’s about as close an approximation of a wearable camera that you can get to.”

At the same time, Murphy acknowledges that nobody knows everything about how AR is going to work. He says the company is trying to build on what it knows works while also experimenting with new ideas about the future. The key, at least for Snap, is to nail the basics — like the carousel of lenses that users are used to swiping through to find fun stuff or the press-and-hold way of accessing Scan. “It’s important that we really get that right,” Murphy says, “but what each of those has allowed us to do is then create a much more flexible framework to then learn with many different types of AR use cases.”

That’ll be the trick for the next few years, for Snap and for everybody else. The industry increasingly agrees on the 10-year plan for AR, a world in which everyone’s wearing glasses and projecting everything from computer screens to video chat holograms to high-quality video games onto the real world. Charting the course from the present to that future will require getting a lot of hardware roadmaps and AI systems right and will require a huge amount of experimentation in everything from use cases to user interfaces. 

But where will all that experimentation happen? That’s the first fight Snap knows it needs to win. If AR is going to be as big as everyone imagines, if it is truly to be the successor to the smartphone, it’ll only work with an entire industry building for it. The prize for Snap, or whoever beats it to the punch, will be to run the operating system of the future — and the ultra-lucrative app store inside.

“At the end of the day,” Dominguez says, “when platforms succeed and fail, it’s whether the developers and those who are building on the platform are able to monetize.” So far, rainbow mouths and sunglass try-ons have given Snap an edge. If it can help developers stick around and make it worth the investment for others to jump in as well, it might keep that edge. If someone else beats Snap to the punch, the company won’t be saved by face lenses.