As the COVID-19 crisis keeps millions of people at home, the Los Angeles Rams turned to the social media app Snapchat on Wednesday to introduce its new uniforms for the 2020 National Football League Season.
With the Snap Inc. (NYSE: SNAP) augmented reality (AR) lens, Snapchat users can tap selfie mode to see themselves wearing the blue and yellow gear with or without helmets on. A simple touch allows users to change between a royal blue version of the uniform and a bone-colored option.
Changing the lens to world mode (facing forward) displays quarterback Jared Goff and defensive lineman Aaron Donald in AR versions of the new uniforms. Snapchatters can use the app to move the players around, getting Goff to throw a pass or Donald to do his sack dance. The world lens also incorporates the voice of an official Rams stadium announcer and crowd noise from actual Rams games.
Longtime Relationship With NFL
Since 2016, Snap has collaborated with the NFL on augmented reality lenses. The first allowed football fans to experience a virtual “Gatorade dunk,” like the sideline showers winning football coaches get from their teams. The introduction of the Rams uniforms marks the first time that Snap has worked directly with an NFL team. It is also the first time an NFL team has unveiled new uniforms with an AR lens.
Snapchat said special attention was paid to match the Rams colors and designs accurately.
Los Angeles Rams chief operating officer Kevin Demoff said, “SoFi Stadium is an iconic, transformative stadium that encouraged us to design uniforms as innovative as our new home.” With Snapchat, the team has also found an innovative way to introduce its new uniforms. Normally, NFL teams hold news conferences to tell the public about such changes.
The new uniforms can also be seen on Rams players in EA Sports’ Madden NFL 20 video game and on Instagram, which is owned by Facebook Inc. (NASDAQ: FB).
Snap’s Bitmoji Faces Competition From Facebook
Even as Snap is finding new uses for augmented reality, the company is facing additional competition from Facebook. The social media giant began rolling out Facebook Avatars in the United States this week. Like Snap’s Bitmoji, Avatars will allow users to create cartoon-like images of themselves.
Facebook’s version offers more options than Bitmoji’s does. Avatars can show a variety of facial expressions and can be created manually or by scanning a photo.
“So much of our interactions these days are taking place online, which is why it’s more important than ever to be able to express yourself personally on Facebook,” Fidji Simo, head of the Facebook App, wrote in a post. “Avatars enable you to share a range of emotions and expressions via a digital persona that’s uniquely representative of you, so we’re excited to bring this new form of self-expression to more people around the world.”
Whether Facebook Avatars will have an effect on Snap’s business is an open question. A recent survey of people between the ages of 13 and 22 found that Facebook is lagging in popularity.
YouTube was the most popular social media service, used by 79% of the survey respondents. Instagram was used by 73% and Snapchat by 66%, according to the poll conducted by The Federalist and the Young America’s Foundation, a conservative youth advocacy group. Facebook was used by only 58% and Twitter by 44%.
YouTube is owned by Alphabet Inc. (NASDAQ: GOOGL), while Instagram is a subsidiary of Facebook.
Favorable View From Wall Street
Wall Street remains generally positive about Snap. Like many stocks, Snap slumped in mid-March, dropping below $9 a share when the COVID-19 crisis forced millions of people to stay home. Since then the share price has been steadily rising, closing at $16.77 on Thursday.
The consensus among analysts is that the stock is a Buy with a target price of $18.00.
In earnings reported April 22, Snap showed a net loss of $0.08 per share and $462 million in revenue, compared with consensus estimates that called for a net loss of $0.07 per share and $431.43 million in revenue. In the same period last year, Snap had a net loss of $0.10 per share and revenue of $320.43 million.
In the first quarter of 2020, daily active users (DAU) rose to 229 million from 190 million a year earlier. On average, more than 4 billion Snaps were created each day in the quarter. This user growth has likely been accelerated by the coronavirus pandemic lockdown. With schools closed, students are spending more time on their smartphones and tablets.
Average revenue per user rose 20% year over year to $2.02. As a result of these numbers, many analysts moved the stock to the Buy category.