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LBX Collective
Sound Off #82 - Arcades, AI and Augmented Reality: Managing Guest Expectations
Sponsored by Intercard!
On this week's episode we kick things off with a conversation on how managing guest expectations has become critical for location-based entertainment venues as the industry faces growing competition and evolving consumer demands. Properly marketing the actual experience while avoiding overhyped claims affects not just individual venues but trust in the entire industry.
• Economic shifts in the consumer gaming sector create opportunities for LBE venues to become the "next console" for gamers
• Incredible Pizza Company announces rebrand and venue upgrades ahead of their 25th anniversary
• Great Wolf Lodge investing $40 million in Grapevine facility, adding socializing attractions including Topgolf Swing Suite
• Retailtainment evolving with Sega Store pop-up and Bandai Namco's Cross Store concept leveraging IP
• COSM continues rapid expansion with fifth venue announced in Cleveland
• ValoMotion celebrates 100th installation of Valo Arena, showing strong adoption across FECs and entertainment venues
• Industry needs clearer understanding of XR technologies: distinguishing between AR, VR, mixed reality and shared reality
• Be cautious about AI claims in marketing – most "AI-powered" attractions use simpler algorithms or procedurally generated content
Sign up for The Stinger Report newsletter for weekly updates on these trends and more in location-based entertainment.
Are you on the edge of your seat Because we're about to sound off with Kevin Williams covering today's latest trends in location-based entertainment, brought to you by the LBX Collective your community to connect, engage and inspire. All right, everyone, let's buckle up buckle up, all right.
Speaker 2:Well, welcome everybody. To Sound Off with Kevin Williams, this is number 82 for July 15th 2025. So we are now over halfway through the year, making our fast way to my favorite time of the year, which is IAAPA Expo Week. But anyway, we're more than halfway there for that, but we're not going to be talking about that today. But I just felt like I had to get that out. I got recently registered. I registered for IAPA Celebrates at Epic Universe. I'm so excited, so, anyway, I just had to get that excitement out there.
Speaker 3:Good for you. Some of us dread the rush of time progression. You're embracing it, which I think is very positive, but anyway.
Speaker 2:All right. Well, let's dive in. Kevin, how are you going to change my mind today?
Speaker 3:Well, we've touched upon this a number of times now and I think we need to really reiterate.
Speaker 3:The point is, we need to manage better the guest experience or their expectations of what the experience they're going to have in our facility is.
Speaker 3:Too many times it's just a web page with a couple of pictures of generic arcade machines and generic people eating generic burgers and generic pictures of wings, without showing a guest experience, without showing what level of engagement you're going to offer guests of certain ages, what you're going to get for your money, what the storyline of the venue is.
Speaker 3:None of this, the magic making, as I call it, regarding a location-based entertainment facility offering to your guests is promoted and we've kind of seen a backlash to the failure to achieve this by the interest that has been generated by the announcements of Netflix house concept. We have seen companies now that were sitting on the fence regarding promoting a guest experience or an expectation of guest experience now looking very closely at improving that message, that communication with the people that are paying their wages, as well as themality, the level of theming and the guest immersion within the space. I point to what we've seen with Chuck's Arcade being an example of taking what could have been a very boring arcade, as was the case with the Fun Spot Arcade, and turning it into something that is more compelling, more engaging and offers a level of guest experience that is exceptional.
Speaker 2:I think you also have the opposite issue. We've seen many, many times and we've covered some of them on SoundOff and we've covered them on just the LBX show in general. But the opposite of it is okay. You've got the issue where you don't have enough information about what the guest experience is going to be, and then you have the overselling. So you have the AI generated images or you have words you know put out in press releases that talk about first of its kind, or you know, completely innovative and nothing like it.
Speaker 2:You know, in the world or whatever thing I'm using hyperbole, but actually many press releases just this week even that have used those types of terms and they put them on their websites. And so guests have this elevated expectation before they come in and when they come in and their experiences is met, it hurts not only their location and their repeat visitation but the industry as a whole, because now people, when they read those things, they're going to question whether or not they can actually believe them, question whether or not the pictures that they're going to see on the site are actually the experience that I'm going to have when I come in the door. So you really need to be careful about not only making sure you're showing what your experience is, but that what you're showing is accurate and is aligned with the actual experience itself.
Speaker 3:And we'll touch upon that a little later in this sound off about the danger of depending on the crutch that is AI to create your marketing material, because it will bite you in the butt if you use hyperbole, but sadly, as you've touched upon, it will bite all of us in the butt.
Speaker 3:If we do not manage, as an industry, the expectation and the levels of engagement that we're offering, then we're going to burn our bridges, we're going to let down our customers too many times and they're not going to trust us and they're not going to accept us.
Speaker 3:You know, I think the situation is that a customer that goes to a venue and their expectations are low and they're exceeded, it's fantastic and it is a boon to all of us and it kind of says that you're keeping your laurels under a bushel. But it also means that you are also underselling yourself. But the alternative to that if you overhype, if you depend upon the pejoratives and the superlatives that AI can supply you and your thesaurus, and you start claiming that you are the first, when you're not, when you're claiming that you're the only, that you're groundbreaking, that you're one of a kind and you're not, and the customer goes there and their high expectations are dashed. That hurts us, and it hurts us all, and it's something that we need to address now, especially with the number of facilities that are out there vying for the same coinage.
Speaker 2:Yeah, all right. Well, coming up after the quick break, we're going to dig into the latest trends, but we'll start with the economy. Intercard is the only cashless system designed, developed and manufactured all under one roof. They introduced cashless technology to the amusement industry and have been leading the way for over 30 years. Cashless systems from Intercard increase customer spending, guest satisfaction and boost revenues by up to 30%. Intercard is so proud to be serving the amusement industry and if you aren't already part of their global family of customers, they hope you will.
Speaker 3:Thank you, intercard. As always Jumping in the trends economy and we're seeing the consumer video game sector taking a pounding at the moment. This is something that we have been experiencing for a couple of months. Now really started 2023, where we were seeing the fallout from what some people like to call the COVID boom of employment and usage and purchasing of content the locked-in syndrome, as it were. But now many of these game studios are seeing their projects being cancelled, they're having to make layoffs and the consumer game sector is turning around and saying that they're experiencing, or about to experience, recessional quality layoffs and changing in the market. That has also been met by a change in technology. Our friends at Microsoft are heading towards a non-physical console approach to the business, where they're selling their access to their content on the cloud that can be played on any kind of machine. That is part of a relationship. That is where we saw the launch of the MetaQuest 3S limited Xbox edition as an example of that. They've also tied a deal with AMD to allow people to buy the Game Pass to be able to play the games on the latest high-speed chipsets. But from our point of view as an industry, we look at our cousins in the consumer video game sector and understand that, while these guys are experiencing serious issues, we in the market are the recipients, the benefactors of an addicted video game audience that may not be getting their kicks, as it were, from their console gaming and their mobile gaming. And we could be the 10th console, as it were, the opportunity for these individuals to still get their gaming fix within our facilities.
Speaker 3:Moving on and looking at the trends in the industry, away from the economy, and we just have the latest m&a's. I, to be honest, I was expecting a lot more m&a's. Uh, by this point. I don't know if it's the uh build up to the vacation market and most people are going to be waiting for, uh, the august period to make their announcements, but but anyway, in India, it was revealed that Nazar had taken on the assets, or the debt assets, and acquired Smash Entertainment. Now, smash Entertainment was a phenomenally large what I would call mixed-use leisure entertainment facility in the Indian diaspora. They were a major player. They even experimented with trying to open up a US chain of facilities. They would be my equivalent, the Indian equivalent of round one would have been my description many moons ago. But they have gone through a number of changes. They made some very poor management decisions, their US operation being one of them. They also invested heavily in developing for the VR side, with content which they'd hoped was going to be groundbreaking, and they've also had some internal management shakeups that led to in 2023, 2024, the company looking at bankruptcy protection against debts and assets owned, and now it is revealed that Nazar has taken on acquisition.
Speaker 3:Now, many of you who've got long memories have stayed awake during my sound offs will have remembered that I talked about Smash going through a rebranding of their company to a unpronounceable name that we couldn't work out the lineage of. I've been corrected and again thank you to our sources regarding what actually happened there of the smash venues. And then you had within that, a number of the modern latest interpretations mid-scale, more social entertainment, more compact versions. Those were farmed out into the Zorreco I'm butchering that one. I know the Zorreco brand and that brand has continued. There's about four of those facilities in India and they're continuing to grow. Again, I'm not sure how much of a proximity they have to the debt and the restructuring of Smash or if they're a separate entity or all of their own. We will hopefully get more detail in the coming weeks, weeks.
Speaker 3:There's also Smash Labs, which is the company that developed a number of virtual reality products we had at IALPA over a number of years I remember 2019 and 2018, there was representation from Smash Labs on the exhibition floor. They had products there. I would argue that their VR products were a mixture of the quality of the Chinese systems and the US systems, so unproven middle ground. And then we have Smash USA, which I've touched upon in the magical American mall, the Mall of America. I call it magical because many companies go there and they disappear. So there is an issue that it is a very hard baptism of fire for new operations to open up in that locality. But anyway, it opened in 2016 and then closed in short order in 2018, undertake this kind of tells us that this won't be the first or the last of these kinds of things we're going to be seeing yeah.
Speaker 3:So moving on and investment, investment, investment. If you have a brand, if you have a chain of facilities and you haven't plowed some capital in to bring it up to standard to compete in the 2026, 2027 changing market horizon, then you're a fool and you're going to suffer. So our friends, Incredible Pizza Company, have just announced that they're going to be working with a marketing company to upgrade their marketing offering, rebranding their aim, refocusing their efforts towards their target audience, and all of this will kind of coincide next year with their 25th anniversary. So they're planting that flag in the ground that they're going to be making an effort. I would argue that Incredible Pizza Company is targeting the main events the Evos, the Andretti's those are the kinds of companies that their new investment will be looking to supplant, as well as the Chuck E Cheese's, of course. But again, it is interesting to see companies now reinvesting in the brand rather than just opening new facilities.
Speaker 2:Yeah, I think one of the things that I'm a little bit hesitant about here is not that Incredible Pizza is going to be working through a rebrand. They need it significantly and specifically when you have certain religious elements tied to your brand, I think it's important to move to just modernize your brand in that way. But what I'm concerned about is not that Rumble Buzz is not sufficient for the brand. The thing that maybe is at least the way that the press release reads and some of the information online is that they also seem to be coming in to help with their attraction development as well, and some of the redesign internally sift through Rebel Buzz's website. I don't get a sense that they have a strong set of skill sets around interior design, attraction development or even really have a good, strong sense for this industry in general, and so I think if they're looking to do a rebrand and marketing and do a new website and everything else, RumbleBuds is perfect for that.
Speaker 3:But when a company like this gets over their skis, bad things happen, and I am concerned that there'll be some fallout as a result, as any contractor knows that as soon as you start doing building work you increase your insurance and your health and safety. And if you're going for rebranding then you should be protecting yourself and double checking. I hope that we're not going to be seeing a Dave and Buster's moment where the baby gets chucked out with the bathwater because of the inexperience or the failure to understand or comprehend what are the values of the brand and the market needs. Again, you're like myself. I did the due diligence on Rumble Buzz to see what their background is in location-based entertainment and I couldn't find any. So that is a concern. But we wait and see. I am sure for next year's anniversary we're all going to be amazed.
Speaker 3:Our friends at Great Wolf Parks or Lodge sorry, they need no support from outside entities.
Speaker 3:They have enough experience internally at getting the mix right and we get another example of plowing investment into the operation to grow.
Speaker 3:This particular 40 million investment in their grapevine facility has been ongoing for a number of years, so it hasn't been engendered by just what's going on in the current trends in the market.
Speaker 3:They've added laser tag, they've improved their amusement, they've improved the Magic Quest component and they've added competitive socializing on multiple levels, including golf simulation base. This is the kind of example of what we've been talking about A lot of resort venues now adding a high-level mixed-use leisure entertainment component to their traditional attraction business, their hotel, their restaurant, their children's attractions, their holiday vacation low-scale environment now also has a level of what could be called FEC or mixed-use leisure entertainment that could compete or will compete with the dedicated location-based entertainment facilities. And that kind of leads us to a possibility that we're going to have to face in the market, which is how many of the resort entertainment operations are going to think about creating dedicated attraction resort venues that rival what we can achieve in the location-based entertainment standalone sector because of the deeper pockets and the larger real estate that they're playing with, well, and and just the dedicated, uh, the dedicated audience base that they have already, you know, guest base based on the people staying at the resort, and so you know, I think, yeah, the captive audience.
Speaker 2:And I think, you know, maybe one of the differences here is that obviously, the you know, their arcades, the size that they can devote to their arcade, what they call their Northern Lights arcade, is going to be less square footage than you would get at a Dave Buster's or a main event or some others potentially right facilities and remaking them as they build newer facilities.
Speaker 2:That isn't to say that they can't go and build out a much larger arcade. This location also does have the virtual frontier, which is, you know, we've talked about before with the VR component, and you know, I think, what's really interesting here. This is at least one of the first Great Wolf Lodges that I'm familiar with and maybe it's happened at a few of the other locations where they've added the top golf sims into the Great Wolf Lodge and they're calling it the Grounds, which is again really an adult attraction, which is one of the few adult-focused or older teen-focused attractions that Great Wolf has added. Everything has historically been targeted towards younger families and I think they're maybe beginning to see the need to add attractions for those adults, that after the kids go to bed, what are the adults going to go and do? Maybe this is that opportunity.
Speaker 2:But you know this is also something that you know is a concern, because Great Wolf Lodge at least I know one in Scottsdale is right across the street, more or less from a Topgolf in Scottsdale is right across the street more or less from a Topgolf, and if you're adding Topgolf golf sims in the Great Wolf Lodge now, that's also going to be less opportunity for those adults to go to the actual Topgolf but rather play the Topgolf golf sims inside the Great Wolf Lodge.
Speaker 3:And for our listeners and viewers that don't understand. There's the Topgolf shooting range concept, which we've talked about a lot, and then there's the Topgolf shooting range concept, which we've talked about a lot, and then there's the Topgolf swing suite simulator environment. And this is the simulator environment. For some weird reason we will never understand why the Topgolf shooting ranges have never incorporated, to our knowledge, the swing suite simulator systems, though I'm sure that will change now with the Callaway separation, or if it doesn't, then they will suffer for that. I would also point to the same way that we've been talking about in Open and Shut the sin attainment business, where if you have a captive audience, if you can create a secondary or a tertiary entertainment component to keep the dwell time up and the spend up, then you benefit. This is the kind of the equivalent to that where you have a captive audience and though I like the traditional analogy of the kids have played themselves out and they're all tired and tuck it out and you wrap them up into bed and then you go downstairs with the wife and have a quick golf and a couple of gin and tonics. I also think that the model that our friends at Great Wolf Lodge are looking at is that the group or the family group is a much larger group. It is not so atomic now, it's nucleus. So you have the teenagers, you have the newly married also going with the younger kids. The larger family group and having a competitive socializing environment that offers something, stops everybody at the end of the day allocating one grandma to keep an eye on the kids in the house and everybody jumps in the minivan and goes to the nearest Hooters. This kind of approach keeps them on property and keeps the dwell time and spent up.
Speaker 3:Moving on and we touched upon this in the recent open and shut our friends in Australia with the Fun Labs launching the latest of the Hijinx Hotel, which is kind of a competitive, socialising entertainment environment with a little bit of bowling and a little bit of redemption or midway entertainment, and they linked that to the Archie Brothers Circus Electronica, which is more of a mission room kind of entertainment puzzling concept. It has been combined into a dedicated hotel kind of approach. You can't stay there to sleep, but you can stay there to play and drink and have fun. To sleep, but you can stay there to play and drink and have fun. Ten rotating rooms are being updated with different puzzles, so that has a repeat visitation. It is clear that our friends at Fun Lab are up to something. It is clear that they're investing much heavier in new developments. They also have their investment in North America where they've opened up a couple of their mini golf experiences and now it looks like they're really nailing down their competitive socializing offering.
Speaker 2:Yeah, I mean I love what Film Lab is doing. I really love the theming that they've put in. I mean, not only do I like them, specifically the theming that they've chosen, but just the fact that they have chosen a theme to go with each one of these, and they've stuck very loyally to that and built their entire experience around that theme as well. So I appreciate that. Obviously, they've thrown in some karaoke.
Speaker 2:We've talked about the use of having karaoke, adding karaoke to these types of things as an additional attraction. It is attractive to the age range and demographics that they are targeting for these facilities. And then I also appreciate that they have specifically called out that there will be 10 rotating challenge rooms, and I think that is absolutely key. Some of these things. We've been to Play Playground in Vegas before, and when I go to play playground, one of my issues is that it is that the space is built in a way that they will not be able to very easily rotate those challenges. They're built very physically into the venue and so the fact that they've thought through the need to create a rotating experience is important.
Speaker 3:Totally agree. I think it is the biggest failing of about 80% of the new openings that I've seen, that there is no breathing room for improvement. And remember that you're only as good as the popularity of your entertainment offering and most of this entertainment offering, especially on the amusement side, only has a nine month window of hotness, as it were, before you have to start thinking about rotation and the number of times I've been involved in projects where when you turn around to the owner operator and say what is your next purchase of machines attractions going to be, and they look at you thinking that these machines were going to be staying there for 24 months, if not longer, kind of is scary. I would also say that archie's uh offering uh is very similar to what I've been seeing from our friends at circus ole regarding their interactive entertainment experience offerings that they're talking about. So I wouldn't be surprised, along with Holy Moly that's opened up in the US from our friends at Fun Lab. I wouldn't be surprised if we kind of see that as a challenge towards their entrance into the US. It's great to see competition. That's all I can say.
Speaker 3:I constantly go on about COSM. That picture there of people enjoying a baseball game is not a picture from a stadium. That is a picture from a COSM facility, so up to where the man with the hand raised in the air are real people or live people within the facility and everything beyond that is part of the dome LED, digital high def screen and it does feel like you're at the ball game. It does feel like you're at the soccer match. It does feel like you're at the front of a basketball game. It does look like you're the front of a basketball game. It does look like you've been pulled into the matrix.
Speaker 3:Our friends at Cosmo have really been part of the part knocking it out the park regarding their experiences, and part of that has also seen the increase in their announcements of new venues, and so we have the announcement that they're going to be building their fifth facility. They partnered with Rock Entertainment Group. This looks like a major investment, and their fifth facility is going to be in Cleveland. So they have Denver. They already have their opening in Los Angeles and Dallas, so the momentum is building. Watch this space.
Speaker 2:Yeah, I mean especially now. I mean for those of you who are listening and watch Welcome to Wrexham, you'll recognize also that the latest documentary, the latest season of Welcome to Wrexham, has actually a segment where they talk about Cosm coming out setting up the cameras and then they actually broadcast several Wrexham games inside of at least the Los Angeles Cosm theaters, if not a few others, and so they're doing a very good job too, just getting publicity. Obviously they clearly had paid for I don't want to say obviously or that they clearly did most likely had paid for the ability to come in and do the Wrexham games, to get that type of publicity through the documentary. But they are moving and they're moving fast and they're doing phenomenal work.
Speaker 3:The level of the C-suite and the level of the marketing team at Cosms is very impressive. Sweet, and the level of the marketing team at Cosms is very impressive, smart guys, and I'm not just saying that because we know some of them that are involved in this. This is a company that has definitely picked out a part of the market that they want to dominate. I'm treating them as the top golf of immersive experiences at the moment, though in a good way at the beginning rather than floundering near the end.
Speaker 3:We've talked about this briefly in the open and shuts, but we now have three facilities that are part of the Sega store concept, though the third one that has opened in North America, in Los Angeles, is under the Pop-Up Shop brand.
Speaker 3:So again, we're not sure if this is part of the Sega store or if this is a placeholder towards them evaluating the opportunity in the particular market that they've targeted. Either way, they've gone into a retail unit in Los Angeles and they have populated it with the latest Sega merch toys branding, and we're led to believe that there will be some interactive entertainment going into even the pop-up space, as we've seen being proposed for the Shanghai and Tokyo facilities. The Shanghai and the Tokyo facilities. Watch this space because all of the brands now are going to be looking at maximizing their IP into bricks and mortar. We're taking your digital characterization, be it the popular Sonic movie IP or the coming outrun arcade property being turned into a major motion picture. All of this is IP that can be turned into merch, into prizes, into collectibles, into branding, and you need to have somewhere to sell this, and rather your own store than doing a partnership with a third party.
Speaker 2:Yeah, and so far at least, with this first location they've selected in Los Angeles, in Little Tokyo, is a smart move. They didn't try to go into a space that maybe would have maybe had more foot traffic, better demographics maybe or whatever, but they went where they know that the type of their audience is and it was a very smart and wise first location to to break into the us market you know, looking at where your core audience is for your first facility and using that as a test model is essential if you're doing something as new as this.
Speaker 3:And again, also not burning the full brand but doing this as a pop-up shop rather than a full-blown sega store is also very safe.
Speaker 3:That allows you to stretch and make mistakes without burning the whole store down.
Speaker 3:And our friends in bandai namco know about how to do it as a soft rollout, because we're seeing a slow and steady rollout of their cross-store venues, which are kind of defining the model of the entertainment brand facility, again gradually adding a level of interactive entertainment to this.
Speaker 3:The latest entertainment being added to the Camden and Birmingham facilities here in the UK that they've opened is they've had a dedicated pop-up attraction added to their space promoting the 45th anniversary of Parkman, and that actually sees Bandai Namco amusement machines the Parkman amusement machines deployed in their facilities. So we've now fully moved over to turning these retail store facilities into retail taping venues and we're seeing that repeated in Japan, where there are a number of cross stores already open, where their level of pop-up celebrating the 45th anniversary of puttman seems a little bit more explosive. They have a lot more merch a lot more toys and products based upon celebrating their yellow pill popper, and I would expect that, once the whole of the cross store facility operation has established itself, this is the kind of level of updated attraction investment that we will see across this brand, and I wouldn't be surprised to see Sega mirroring this kind of approach closely, followed by other companies that have high-profile IP that can fit into the market Nintendo, for example that can fit into the market, nintendo, for example.
Speaker 2:Yeah, I really see this as much more of a retail-tainment venue than an entertainment venue with retail and merchandise, and I think Sega, at least what we're seeing so far, is much more of an entertainment venue with merchandise. And this is a shift, I think, which is much more closely aligned with your classic retail-tainment where, yes, I can go and I can play some Pac-Man themed games or amusement machines, but I'm really there to buy Pac-Man merchandise.
Speaker 3:I'm really there to buy Pac-Man merchandise. I'm really there to play on the Gashapo.
Speaker 2:Well, not play, but but get the capsules.
Speaker 3:Yeah, get the capsules and start collecting and sharing and doing that. I'm there to be wowed by the uh puckman shorts, as it were, but uh, that isn't my uh core reason to be there. Uh, the entertainment side isn't the core reason to be there, agreed? Uh, talking about brand crossover? Uh, I can't point to your puckman machine behind you, I know.
Speaker 2:I know it would normally be right here yeah, a vacant space.
Speaker 3:But our friends at lego have dropped the dime again, this time creating a generic arcade machine, not doing a licensing deal, which surprised me. I you know, when I heard wind that they were going to be rolling out another lego arcade machine, I expected it to be another multi-piece, uh cabinet recreation, maybe of space invaders or an atari property. But obviously lego has played it safe and created this interesting creation. It still shows the the zeitgeist popularity of the amusement side of the business, even though our industry doesn't really depend on those type of cabinets anymore.
Speaker 2:Yeah, I'm not, I just you know, other than the fact that it's only $40, which is, you know, $40 US, you know dollars.
Speaker 2:US you know, is a, you know, and it's a smaller piece. Right, it's not as big as, obviously, the Pac-Man piece. The Pac-Man has actual working gears and movements that moves the Pac-Man around the you know the thing, and it's pretty complex. So this is a lower, you know, an easier entry build. But still, I'm not, I just don't know. I mean it's capturing some nostalgia, I guess, but I don't know what it's trying to accomplish here with this one.
Speaker 3:I wonder if it's an appeaser for the children that wanted to get the Pac-Man machine and couldn't afford it, so this gives them an entry level, or if our friends at LEGO are leading the charge towards maybe creating a line of arcade classic machines. I don't want to read too much into this because LEGO is very reserved with their plans and they usually take a long time to master it, and then we're always surprised. But it was just interesting to see that they would create a mid-scale uh you know, younger arcade machine and, as you've touched upon the kids that this is being aimed for, wouldn't even know what, uh, the original arcade machines were like. So they're living off the nostalgia of the nostalgia of the nostalgia. Yeah, brand and IP just to wind up here is big, and our friends at HeroZone VR have announced that they have partnered with the team at Studio Canal towards releasing a Terminator Salvation VR experience that is playable through their VR platform. We don't know much more about this other than that it's going to be using the Terminator IP and that it will be rolling out. I expect we will be able to play it at IALPA in November.
Speaker 3:Just for all of those that think this is a new entrance for the Terminator property into location-based entertainment? No, it's not. Back in 2018, we saw the Terminator license used for a location-based VR entertainment experience that was developed by Spaces working with the theater chain Cinemark. It did okay but, funny enough, the company that developed the experience before they could start rolling them out, got acquired by Apple, so that put pay to that project. But again, it's nice to see the big film IPs turning up in our location-based entertainment sector. Where they're not available in the consumer sector, they will be available in our sector and, of course, we need to maximize the promotion of that where possible.
Speaker 2:Yeah, and quite a significant investment imagined by HeroZone. So it's good to see that not only have they gone down the path of securing the IP, developing the game and gameplay and getting it out to the market, but that they've also made sure that they reserved the money that they needed to and the spend to make sure that they get coverage within the industry press. Obviously, as we've got here on screen if you're listening to this is there the cover of Replay Magazine, and they've got the cover story as a result of this as well. So definitely making sure that they're taking advantage of this momentum that they have by making sure they're securing the press.
Speaker 3:Our friends at Replay created a special VR edition of Replay magazine that highlighted a number of VR products, trying to underline that VR is still alive and kicking in the North American amusement market, and news like this type of IP being deployed into the market definitely shows there's still a lot of life in the old dog yet. Anyway, the downward trends, sorry, the tech. If we're talking about VR, we need to be a little bit more clearer regarding what is happening in the XR environment, and I've gone away and created this nice little graphic to try and define for the people I am working for and the people we're dealing with on social media of what are the differences between the different technologies, what is the difference between augmented reality, between mixed reality, between virtual reality and between shared reality, because a lot of people are now confusing, juggling the different definitions. If you're listening to this presentation rather than watching it, then you can go on to the Friends of the Stinger Report Facebook page and see the picture that we're all looking at now. Shared reality really is where Cosm sits, but it is also where a number of the new multi-user virtual reality and augmented reality experiences are sitting. What we are seeing across the consumer electronic side is, you know, the great pivot from the great experiment 2016, when mark zuckerberg, you know, walked across the stage and uh, you know celebrated the acquisition of oculus and vr and was going to turn this into the next best thing since sliced bread, jumping forward to 2021. When Mark Zuckerberg walked out on stage and demonstrated avatars and horizon and said that the metaverse was going to be the next best thing from sliced bread. This hasn't happened.
Speaker 3:It is clear that these technologies have stayed a niche within the consumer sector and the markets are now pivoting towards ai and and ar, because that's where they think the investment will be, that's where they think the market is going to be pivoting towards. Our friends at Apple have doubled down that. They feel that augmented reality, that spatial computing, is going to be the future, rather than sticking a box on your head and totally immersing the individual in the synthetic environment. And we even see the terms now appearing in the media of AR light, appearing in the media of AR light, referring to just these fashionable glasses, the Oakleys and the Ray-Bans that have the capability of answering questions or telling you what you're looking at, or capturing pictures or live video, but really aren't major augmented reality tools like heads-up displays telling you which direction you're heading towards. That is going to change. We're seeing these companies now doubling down on their AR investment rather than on their VR investment, which is important for us to be mindful that we still need to push our technology if, especially, we're the only offerers of that, the only game in town, as it were.
Speaker 3:As we touched upon in Open and Shut, our friends at Dream Park, which is an augmented reality, immersive, downloadable theme park, but what is called an AR attraction. I would argue about this being an AR attraction. I feel it is more than a heads-up display kind of information that you see with the glasses. I would call this mixed reality, and especially the headset that is being used for people to experience. This is not a see-through AR glasses system, but it is actually a virtual reality system with see-through capability or pass-through capability, which is defined as mixed reality.
Speaker 3:But anyway, you put the helmet on and you are transported into a reality where the physicality of the space that you're inhabiting is populated with virtual elements that you can interact with, and that is what our friends at Dream Park have created. You know, living a real life Mario experience, as it were, and they're rolling out their first installation of this concept. After the alpha tests at the Two Bitsbit circus in Los Angeles, they're now opening up their first full public rollout in Washington state in the next couple of weeks. We touched upon this in the sound offs, but do you want to redefine your position on this?
Speaker 2:Yeah, I mean I think I'm not going to go super deep. I provided quite a bit of commentary in the latest open and shut LBX show just two days ago, on the release on the 13th of July, so you can certainly go back and listen to that if you haven't. Is is the. I'm just really waiting to see how soon before nintendo begins to question um, question this, and and come to them say, look, this looks just a little bit too much like super mario brothers, this interacts just a little bit too much like super mario brothers. Um, and you know, look, maybe they've done their research, maybe they've made sure that there's no IP conflicts here, but to me it is really really damn close.
Speaker 3:Especially the new protocol.
Speaker 2:Yeah, and I think that this is going to be an issue for them especially if this takes off and is successful.
Speaker 3:I know they have other experiences. They have a go-karting experience that they've been toying with and they have other game experiences that they're going to be rolling out. But yes, you're quite right, the marketing material that is being used really does push the Mario-esque environment. But again we're at that beta stage where they're really finding their feet. Let's just hope that they don't find their feet with a cease and desist.
Speaker 3:Going beyond the augmented and looking at the shared reality, which also includes projection and the interactive screen systems where you don't have to wear a headset or glasses to be able to enjoy the digital environment. And our friends at 501 Fun have finally rolled out the full version, production version of their interactive mini golf system. This is mini golf using digital screens, so you have the playing field, the hole that you're playing on, you have the touchscreen for activation, but most of the information, the scoring and the game experience is generated on the giant LED screen that is mounted into the green, into the course, into the hole that you're playing at, and this offers a platform that can kind of be dropped into any social entertainment facility without having to have multiple holes or courses in one venue. Nine courses. You can have just one course and then it cycles through a number of game experiences utilizing the screen.
Speaker 2:Yeah, I mean, obviously we had a chance to play this at EAG earlier this year, the prototype yeah, to be clear, it was the prototype and you know we had some good conversation there.
Speaker 2:I'm a little bit disappointed to see that they've continued to keep the 50 still so difficult to nail, although I do appreciate that they have made angles from the side, because what was happening quite frequently is you would shoot it to the 50, and it would just hit kind of a flat wall and then it wouldn't go one way or the other and so at least now, if you don't get it right down the center, it is going to go right off to the side, to the one point on either side of the 50. So really you have to be pretty accurate if you're going to take that shot at that 50. But you know good to see that they've that they're coming out with the actual product and you know just in time to compete with social rivals version of a. You know a mini golf bay, very different gameplay, different, you know layout and structure and footprint, but it is still a social bay built around mini golf.
Speaker 3:So that system is using projection mapping, where this one is using LED screens. Of course, the issue of using projections in some venues that can't control their lighting brings its own issues the ability of having a large screen but also quite a large enclosure. So it's going to be swings and roundabouts about how these physical entertainment systems play in the market, but it's great to see this happening. I get the feeling that their whole layout they've been borrowing very heavily from the skeeball approach to play. We will have to just wait and see how well it plays when we get our hands on the physical system, which will hopefully be at IALPA Europe. Our friends at ValoMotion have been popping champagne corks. They've had their 100th installation of their Valo Arena system.
Speaker 3:Congratulations to all the team in reaching that milestone, a very important milestone to have 100 of these units out in the market.
Speaker 3:It's clear that their partnership with CreativeWorks has paid off in creating a package that is very compelling for active entertainment facilities to get their hands on, as well as FDCs.
Speaker 3:They've been kind enough to offer a snapshot of a percentage of those 100 customers who purchased it, what type of venues these systems have gone into, and you know we're seeing, obviously, that it is. A big chunk of these sites is fecs, um again, the active entertainment facility and trampoline parks, you know, and the ninja war environments have been taken by this system. I'm surprised it's not a lot more of the active entertainment sector that has taken hold of this, but early days we're only 100 units in. And then we get to see that the malls and the hotels, which is a unique market for these type of systems, are also getting their hands on those hotel resorts and attraction resort venues that we've been talking about previously in some of the open and shuts that are now embracing having an entertainment component. Active entertainment, especially active entertainment that is with groups, sheer reality and that is very compelling, unique and doesn't require you having to put a head-mounted display on or putting on a special jacket or putting on a special hat, has its place in the market and can be very successful.
Speaker 2:Yeah, the only thing I'll say here is it's not super surprising to me, or maybe as surprising, that they're in more FECs than active indoor entertainment or trampoline parks, primarily just because of their other products. I think we tend to see VALO Jump and VALO Climbs in the active entertainment market where we see the VALO Motion, which is more of that immersive enclosure type of group experience in an FEC where it has the footprint, where they can drop in one of these, where a pre-built out adventure park, a trampoline park, has less footprint in some cases to work with, to add one of these in after the fact, unless they've made space for it in their original design.
Speaker 3:Their sales model is clearly selling to the customer base that they already understand pretty well, which is the active entertainment side, and so that is part of it. But I also think, now that they're getting their momentum, that is why we're seeing the FEC market dominant. And another thing to bear in mind about especially Velo Arena, it's stickiness, and what I mean by stickiness is I'm actually referring to its social media and customer appeal. We have seen a lot of TikTok videos created, a lot of Instagram created based upon people having a good time playing the game, and they're sharing them playing the game through their social feeds and those are getting a lot of hits. We're seeing here, from the information they supplied us, that on TikTok they've seen over 28 million views of particular experiences across Reddit and Instagram for this year so far. So you know, the TikTok videos are great, the Reddit coverage is great, the Instagram coverage is great, as long as it's your product name in those videos and, if you're really lucky, your facility brand in those videos. I'm wondering how many of the operators of these machines are making sure that their hashtag and their name of their facility is front and center when people are capturing their videos, their facilities front and center when people are capturing their videos.
Speaker 3:A little bit of news from Japan about a possibility well, not a possibility, but a suggestion that maybe we should be considered. Our friends at Capcom and Taito have just announced they're rolling out a brand new version of Street Fighter Arcade Edition, which is operated in Japan. This is the latest version. So Street Fighter 6 type arcade, a couple of new characters, playable characters, a very popular brawler, of course, living off of the Street Fighter brand and IP, and I just wonder is this the type of machine that, if it was brought over to the Western market, would find popularity? I threw this question open on one of our social media feeds to our audience, and most of the operators, you know, raised their eyebrow because they were concerned about how expensive this kind of Japanese cab with this kind of IP would actually be. Where I was more interested in finding out whether the customer base would want it, rather than if the operators would be coming up with reasons not to buy it, because operators will always come up with reasons why not to buy something. I think the jury's out that Capcom would actually dip their toe in the water, though, again with the news that Konami is going through the process of looking at doing a limited sale of some of their Japanese amusement products into the Western market. That opinion may change if they see benefits.
Speaker 3:And then, really winding up quickly, I'm actually thinking of changing the name of this part of our trending, you know, dropping the AI term for LLM, and what I mean by LLM is, of course, it's large language model, because, to be blunt, most of the AI stuff that I'm talking about is not real AI. It is generative systems that are using algorithms that kind of fit into what is described as narrow AI or artificial narrow intelligence, where they're a smart search engine, they're a smart image generator, they're a smart search engine, they're a smart image generator, they're a smart information gathering tool rather than a generative AI system, though I don't think LLM is as catchy or as easy to say as saying AI. But I just wanted to throw it out there that we haven't really seen true AI being deployed in the market, and a lot of the stuff that we are seeing utilized creates a lot of slop, creates a lot of mirages, makes a lot of mistakes, and that isn't AI's fault. That is garbage in, garbage out kind of approach.
Speaker 2:So I mean, I'll just say one thing here, because maybe it's slight disagreement.
Speaker 2:I would say that what we're seeing isn't necessarily not artificial intelligence, especially depending on how you want to define intelligence.
Speaker 2:If it's, can the particular AI pass the Turing test, which is a test that a scientist created, named Alan Turing, to determine whether or not you could tell it's a computer that you're speaking with versus a human? Well, I think AI has crossed the Turing test. The versions of AI that we have, the generative AI that we have so far, has passed that Turing test many times over. And so I think, depending on how we want to consider intelligence, sentience versus sapience I think those are some of the questions that we could be asking artificial narrow intelligence versus what I think most people would really be targeting for is this idea of artificial general intelligence or AGI, which has now got a system that can do pretty much anything that a human can do functionally and intellectually. Then I think it's fine if we want to create that narrow definition, but I do think that what we are seeing is, and can be, called artificial intelligence, even if it's built on the back of large language models and neural networks, etc.
Speaker 3:The neural network component now is, I think, going to be the weak link in this chain. We're trying to head towards AGI. I was educated that generative rather than general, but it seems that semantics is taking place. My main concern is that people need to understand that this is artificial narrow intelligence and we're not seeing full AI yet, and that's part of the reason for the mirages and the schlop that we're suffering and also the danger that we're heading towards singularity rather than singularities around the corner.
Speaker 2:Well, and I think the one other thing I'll say about the slop is that this comes down to the application of the generated responses from prompts put in. So, first of all, it's lazy prompt writing, second of all, it's lazy review before they put the slop out there, so to speak. So this is letting the AI write your press release and then not providing anylling, as we talked about at the very beginning, to circle all the way back to the very first segment of this.
Speaker 3:And part of the A-N-I. No, I think we'll still keep on calling it AI. Just understand everybody. We're talking about the narrow application. We're talking about the narrow application. Our friends at Unity have pinky promised that they're going to try and make sure that no copyrighted material and information is regurgitated through the prompts. Good luck trying to police that, but I suppose if you're partnering with Disney on multi-billion dollar deals, then you're going to promise anything. And then, of course, we're seeing the acquisition. We've seen the head of Meta, mark Zuckerberg, throwing down multi-million dollar incentives, golden handcuffs, as it were, to encourage people from various top executives from various of the AI companies to jump ship and join his AI company. He's already had some success of some very prominent executives from ChatGPT and OpenAI have jumped ship for that big payola, and I think we'll be seeing a lot more of that as the multi-billion dollar payments are made for acquisition of this space.
Speaker 3:Ai is being used by some companies as a major foundation to their decision processes, as Brandon has alluded to.
Speaker 3:You know, feeding in some prompts for a press release and then just running that press release without any human beings involved was a sanitary tale.
Speaker 3:It is now quite common to see that I actually bin ai uh schlock uh press releases from uh from being circulated by us, because it is just a waste of our time.
Speaker 3:Uh and the dangers of manipulation have come to the forefront a couple of days ago weeks ago now when this is being recorded, the you know our friends at X, elon with his Grok AI tool. Well, it seems that Pinocchio has been modified by Geppetto and Elon made some tweaks and changes to Grok to better align with his views, and that tweaking turned Grok Nazi. It started to call itself Mega Hitler and started to make some very nasty comments that had to be deleted when questions were asked of it. This is the danger of narrow AI, which is if you tweak the model and you don't understand how the model works, it will fall over and break. And this situation seems to have decimated the market's reaction to X's entry into the AI market, because if you don't have an AI business plan in your makeup, then the investment community gets very scared, as seen with what's been happening with Apple and their troubled entry into the AI situation. But for X, the fallout seems to have been considerable, along with the black eye, or the latest black eye for their owner.
Speaker 3:We've also seen the CEO that was voted in as a bulwark to try and defend the owner of the company against some of the mistakes that he was making previously. Company against some of the mistakes that he was making previously. After only 24 months has decided to move on. So the repercussions for this situation are going to be felt. If it isn't Tesla being shaken up, then it is X being shaken up by both the social and political ramifications of AI.
Speaker 3:And regarding our industry, because everything usually reverberates back to our sector. When I was talking a few sound offs ago about the first AI content created system, when I was talking about the funk bowling system and I couldn't remember the name of the amusement system last year that claimed to be the first amusement game, or video amusement game, to have AI-created content. Well, that was from our friends at VR360 Action with the Neo Overdrive, and Adam was lucky enough at Arcade Heroes to do a deep dive into that His video is still up where we found out that, rather than it being AI powered, as the PR was promoting, it was more of an algorithm that was creating procedurally generated levels. So you never played the same level twice. But again, that is the danger of people's perceptions of what is AI and what is the reality of procedurally generated or machine learning. Buyer, beware and don't throw all your eggs into a basket, especially when it has a very large hole at the bottom of it.
Speaker 2:And so, not just buyer beware, but manufacturer beware. Take a pause and decide whether or not to use these terms in your marketing. Make sure that what you actually are doing is AI powered or AI generated, or whatever components you have. You might have some small elements of AI, but that doesn't mean your entire product is, and so just take a moment to take a pause to decide how you want to accurately talk about your products and market your products, because, in the same way we talked about the issues with how you talk about your facility, manufacturers need to do the same thing, because otherwise words will start to lose their meaning and clarity.
Speaker 3:One of the nice things about the current AI dependency that I'm seeing is an increase in copywriters, the need for human beings to take the schlock that has been created by the badly prompted request for information and turn them into English that is suitable for circulation, and we'll talk a little bit more about that in the next sound off regarding a couple of very interesting stories that are beginning to break at the moment. Anyway, for all of you that are not receiving your AI schlock from us, via.
Speaker 2:There is no AI schlock in the stuff we send out, just to be clear.
Speaker 3:I'm being very naughty. To be blunt, I have bent the knee not to be a Luddite and created a very short rundown of the Stinger Report as an AI. Oh yes yes.
Speaker 3:But that is overviewed by a human being, uh, and that does not mirror the core information, which is always, uh, created without, as far as we know, any interaction from ai. I just, I I'm a flippant kind of guy and I want to rectify that. But if you're not receiving that through your emails, rather than just reading it off of the Facebook or the LinkedIn feed, please sign up for it via the link below, and if you have any questions or any information you'd like to pass on, then you have our details. Have I covered everything for you, brandon?
Speaker 2:Well, I don't know if you've covered everything, but certainly enough for this week, and anything we didn't talk about we can talk about on next week's Sound Off.
Speaker 3:Let's allow the people to wake up and move on. Have a good one, everybody.
Speaker 2:All right, everybody, we'll see you on the next one.
