Snap Inc. has lost over $40 million trying to sell its futuristic glasses, Spectacles.
That’s about 300,000 unsold pairs, despite their groundbreaking video recording and sharing ability.
At one point, the smart frames were selling for as much as $5,000 a pair on the secondary market, but the camera company must now deal with product overstock following a hyped launch last year.
“Unfortunately, we misjudged strong early demand for Spectacles and purchased more inventory than we now anticipate being able to sell, Snap announced Tuesday, ahead of its 2017 Q3 earnings call.
“As a result, we recorded a $39.9 million non-recurring expense primarily related to excess inventory and purchase commitment cancellations.”
Snap says it will continue to sell Spectacles through its online shop and vendors, but will keep revenue expectation from the product line “modest.”
Founder and CEO Evan Spiegel admitted the miscalculation during the company’s earnings call, confirming that Snap believed the viral marketing campaign surrounding Spectacles will have them flying off the virtual shelves.
If you’re looking to grab a pair this holiday season, Spectacles are currently sold for $129.99 through its official site.
The glasses’ financial failure is just one of many setbacks for Snap, Inc. since Snap’s initial public offering earlier this year. With an announced app redesign to simplify usage and an aggressive Android push, major changes are set to continue for the social platform company.
When the glasses debuted in New York a year ago this month via much-hyped yellow vending machines, people lined up for hours in the cold to be among the first to own them.
“I consider myself an early adopter,” Alejandro, a 23-year-old software programmer, told Inverse while waiting to buy Spectacles near a pop-up Central Park pop-up store last November. “I’m trying to be an Instagram influencer, so this is a marketing opportunity for me,” before adding, “I’m supposed to be at work. I took a sick day for this. Man, there’s gonna be a riot in like 10 minutes if they don’t let us in!”
Before their New York debut, online hype over surprise locations on where to buy them worked Twitter into a frothy mess. In February of this year, a few months after their debut, Spectacles seemed to be only the beginning, according to paperwork for Snap’s IPO.
“We may develop future products that are regulated as medical devices by the FDA,” Snap’s filing from its IPO reads. The company also had announced plans to “invest heavily in future product innovation.”
While the future of Spectacles might have been sky-high because of early hype, the waning interest has seemingly brought them back down to Earth.