Snapchat Maker Snap Suspends Gaming Business Amid Layoffs

Due to financial difficulties, the maker of Snapchat is indefinitely suspending its gaming business, Snap Games, and laying off hundreds of employees.

Snapchat manufacturer Snap is suspending its gaming business, Snap Games, amid financial turmoil. The social media company revealed the decision in a recent regulatory filing, framing it as a necessary step in an upcoming restructuring that will also involve laying off around 20% of its global workforce, which consisted of nearly 6,400 employees as of June 30.

The Snap Games program was announced at the Snap Partner Summit in mid-2019 and is separate from the company’s partnerships with major game publishers who occasionally create promotional filters and run exclusive sales on Snapchat. According to Snap’s developer pages, more than 300 million people have played Snap Games to date, which is equivalent to more than 90% of Snapchat’s user base. A high engagement rate relative to rival social media apps has long been Snapchat’s main selling point for advertisers, but monetizing it has proven challenging.


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In a filing last week with the US Securities and Exchange Commission, Snap outlined a plan to “substantially reduce or eliminate” all efforts that do not directly contribute to its three post-restructuring priorities: user growth , revenue growth and augmented reality. In addition to its gaming business, Snap Originals, Minis and Pixy are also on the chopping block. So, no more flying cameras, no more chainsaw-wielding Ryan Reynolds. The company’s Voisey and Zenly apps will also no longer be available as part of the restructuring.

At least a few more titles are likely to be released under the Snap Games umbrella in the near future. The company’s gaming division has so far been consistent in introducing new games on a quarterly basis. The last creation of this type, ghost phone, released last month, and Snap apparently had more near-finish projects in the pipeline before deciding to cut funding for its games. Also, this almost certainly won’t spell the end of Snapchat usage among game publishers. In-app content such as official Ninja Theory Snapchat filters for Senua Saga: Hellblade 2 therefore, it must continue to be done.

That said, Snapchat isn’t exactly the most popular marketing tool in the gaming space. Examples of promotional AR content such as the Ghost of Tsushima Official Snapchat filters are few and far between. And in general, game publishers seem just as reluctant to spend their marketing budgets on Snap as advertisers in unrelated industries. Consequently, Snap is currently trading at just over $11, down nearly 40% compared to its 2017 IPO price of $17.60.

Despite the official claim that more than a third of Snap Games publishers made more than $1 million from HTML5-based Snapchat games, Snap appears to have little to show for its 40-month effort. So regardless of whether the California-based company scraps Snap Games entirely or simply withdraws funding from Snap Games, it won’t be making any significant waves in gaming any time soon.

MORE: 6 Weird Augmented Reality Games You Need To Try

Source: SEC/CloudFront

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