Snap (NYSE:SNAP) is said to be shutting down its unit focused on creating augmented reality services for businesses, according to a Bloomberg report on Wednesday.
The company is reportedly pulling the plug on its attempt to diversify the company, with the ARES (short for augmented reality) division, which was aiming to let retailers adjust Snap's AR technology for their own websites, only announced in March.
However, Bloomberg, citing a memo it has seen from Snap CEO Evan Spiegel, states the social media company realized the expense and intricacy of the service was too significant. The publication added that a Snap spokesperson confirmed the memo.
After Snap began working on the product, it realized it would need to invest more in web tools rather than the mobile software the company is best known for, which made it "both technically complex and less engaging for our customers," Spiegel reportedly said in the memo.
As a result, Bloomberg said Spiegel wrote that it became clear "it would take significant incremental investment to grow our enterprise offering for retailers, and we simply cannot make that investment at this time."
"Our business performance has reduced our capacity to invest in this incremental opportunity as we have had to focus our resources on our core advertising business," Spiegel added.