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LBX Collective
Sound Off #85 - Setting Guest Expectations, Tariff Impacts on Travel, and more!
Sponsored by Intercard!
On this week's Change My Mind segment, Kevin and Brandon debate how the entertainment industry fails to properly communicate experiences to guests, creating disappointment when reality doesn't match marketing promises, while economic headwinds further challenge the sector.
• Poor guest experience communication threatens venue success, especially without clear visual representation of what to expect
• Tourism numbers show concerning trends with Vegas unemployment rising and Orlando tourism down 3.5%
• Canadian travel to US down dramatically at 35.2% by car and 19.9% by air
• Sony's 2.5% investment in Bandai Namco signals strategic alliance for IP development
• Dave & Buster's repositioning strategy removes focus from Social Bays (now Game Suites)
• Next generation "smart crane" machines incorporate RFID tracking and modernized interfaces
• Mixed reality tourism applications emerging as alternative to traditional sightseeing
• Meta reports $4.53 billion quarterly losses on metaverse investments
• Meta acknowledges 20-40 minute "Goldilocks zone" for VR experiences
• AI enhancing entertainment experiences through projection mapping and visual transformations
• Area 15 implementing autonomous Zoox robo-taxis to shuttle visitors around complex
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Are you on the edge of your seat Because we're about to Sound Off with Kevin?
Speaker 2: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.
Speaker 1:All right, Well, welcome everybody to Sound Off with Kevin Williams. This is episode number 84, August 5th 2025. Kevin, my friend, how are you doing? I'm doing very well. How are you doing? I'm doing excellent. I'm getting ready to go see the Niagara Falls, so I'm excited about that. I haven't seen it before.
Speaker 2:Oh well, be prepared to be excited I can't, I can't right.
Speaker 1:I mean it's we always talk about, you know, attractions, location based entertainment, like you know, stuff put into a box and now we get to go actually experience what the uh, the earth has created for us, for our own enjoyment.
Speaker 2:So bountiful yeah all right, awesome.
Speaker 1:Well, let's, uh, let's, dive in. What do we, what are we going to do to change my mind today?
Speaker 2:Well, going backwards and forwards over a number of topics that we've been kind of touching upon again and again, and one of those has been the guest experience, and it is clear that our industry is not getting the message, as it were, the same way that we're not putting that message out to our audience.
Speaker 2:Fundamentally, we are offering an entertainment experience of a certain caliber and construction to our guests. We're asking them to pay for that, but I think in many cases we're not actually communicating what that experience is, and there's an even bigger danger that when our guests actually see what they're getting for their money, they're being disappointed and we're not handling that disappointment well either. So that's a kind of a double-edged sword, you would expect, as I am an ex-Wall Disney Imagineer. We spent a lot of time on the message, and I've spent a career even before then trying to work out so dealing with the early times of the video games boom and such forth, really on how to interpret what we're offering to our audience and what they're prepared to pay for and consume, and come back and consume again, and I'm just worried that maybe the people that we have now in senior roles within the sector may not have that experience and are so making the fundamental errors.
Speaker 1:Yeah, yeah, and I think it's maybe a mixture. I mean, it's certainly a mixture of that, but I think it's also the ease in which we have access to tools like ChatGPT or others that tend to write things in flowery language. Maybe we want to have help drafting a press release. We don't want to go hire a specific press agent or press release service, so we actually go and try to draft it ourselves using ChatGPT, and it uses flowery language.
Speaker 1:First of its kind, one and only the only thing. All these words that clearly are superfluous first of all, but second of all, don't actually correctly identify the experience the guest is going to have when they're coming in the door. It may not be the first of its kind. If I'm coming to see something first of its kind, I'm coming in to experience something unlike anything else. Now, to be fair, like the example you have here, willie's chocolate experience certainly was a first of its kind and hopefully it's the only of its kind.
Speaker 1:Yeah, the last of its kind, but we need to be very careful with those, and one of my biggest frustrations is when there's press that's put out first of all uses the flowery language, second of all, doesn't have a website that has a tangible example of what that experience is going to be to back up the press release. So often we like to throw out these press releases, get all this press and have no foundation to back it up. And so consumers then get excited. They go to see what that experience is really going to be and maybe there's a landing page no photos, no concept art, nothing at all. And now their expectations are really mismatched.
Speaker 2:I would argue that this is one of the few entertainment industries that I work in and I have to deal with a number of aspects of the entertainment industry where we don't understand our customer and we are very, very, very lazy regarding our marketing and promotion.
Speaker 2:This is still an industry that depends on press releases, where the rest of the amusements and entertainment attractions, video games, social media sector depend more on influencers and social media communication. I would also take it one step further and say that this industry needs to shape up regarding how it communicates with its audience, or else there is a danger that another industry or another group of corporations with much better marketing, much better capabilities and technology will come in and eat our lunch and you will see, during this particular sound off, that we're going to be touching upon a subject or a trend again and again that reflects upon this meme.
Speaker 1:Yeah, yeah. I think the one last thing I'll say and then we can move on to some of the trends is there's no comparison to a site that has really solid photos and video of the actual venue not concepts, not AI-generated photos taken of the actual venue. Even if it's empty, you don't need to have it. It's obviously ideal if you can have actors coming in or influencers and have some video with people actually engaging and playing the activities, but even if it's just a drone fly through, those things are relatively inexpensive, very easy to do. Have a drone fly through your facility. Now there's no question at all what that experience is going to be when you come in the door, because you've already seen that drone fly through and you know all the different segments and areas, and it sets that guest expectation right from the beginning.
Speaker 2:I think, as an industry, we may need to set some ground rules, or else there is a danger that we will all be pulled down by the undertow of failed approaches. Maybe one of those ground rules is a simple one, which is you use your soft opening as your photo shoot. Just a simple thing such as that allows you to have your facility in its best conditions, with individuals that are warm targets, as well as being able to collect photographs that aren't in an empty facility. Just a simple rule like that, a simple support from a trade association to help individuals understand what is needed to get the message out, may help some of the companies that are going to be feeling some very difficult times in the coming months.
Speaker 1:Absolutely All right. Well, coming back right after the break, we're going to dive into some trends in the economy. Catch the system 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 become one soon.
Speaker 2:Well, we jump straight into the economy side of our communication. Straight into the economy side of our communication and, in particular, really we're revisiting a subject that we touched upon a couple of sound offs ago, which is the indicators telling us of the difficulties that our sector is about to experience and are currently experiencing. And it would seem that we're seeing a spike in the capital of tourism and entertainment, which is arguably a toss-up between Las Vegas and Orlando in North America, but both are feeling the pain. Our friends in Las Vegas are seeing a spike in their unemployment but at the same time they're seeing a slump in tourism and those two things are obviously connected.
Speaker 2:The tourism business has a major part to play in the employment of job laborers as well as other individuals that are developing the economy there to support the tourist audience. And the tourist audience isn't there. We're seeing an impact on the room utilization rates. A lot of the hotels and casino resorts there are seeing a quite lowering expectation. But at the same time we're kind of getting an understanding of how impacted the North American tourist business is across all of the 50 states, not just Las Vegas. But we are now understanding that the first so we say buds of the current condition have bloomed in the tourism side. Now we're seeing the impact in the food, which will have an impact, obviously, in the service and support, and we're also seeing the vibrations in the employment side of the business. These are all things to be very mindful of, especially when you're looking at the post-vacation market and how you're going to be employing staff. You may find that there's a lot more staff out there, but also will be demanding much higher rate of retention.
Speaker 1:Yeah, yeah. And looking at some Orlando numbers as well, while you were talking about the Vegas numbers, orlando tourism by Visit Florida has said that their tourism numbers in Orlando specifically are down 3.5 percent in first quarter, you know. So it is obviously a little bit less. It's the first quarter versus second quarter, so I'm sure we'll see.
Speaker 1:But asking around anecdotally and Canadian travel from Canada to US the return traffic by car from this is from Statistics Canada is down 35.2% and return travel by air in April to April year over year is down 19.9%, almost 20%. This comes from Statistics Canada, which is their nation's data office, and so clearly also our neighbor to the north coming down here much less. And in speaking with some of the Canadians that we've met at the different restaurants and some of the wine tasting I was doing yesterday, they have all said that they are reluctant to travel to the US forS for specifically, less for a boycott, but more because they're worried about being able to get back across the border, being allowed, being held back, et cetera. And so it is definitely something we need to be mindful of that when we have a type of attraction that relies heavily on Canadian travel or international travel or even domestic interstate travel here in the US. It's definitely seeing a significant slump.
Speaker 2:How many of the resorts and entertainment facilities are aware of the new price that has been put on international guests to get a visa? That includes a $200 surcharge on top of it? How many of them are aware of the concerns that they have regarding traveling to the States because of the current problems that are reported, I would argue, more internationally than in the States. These are all issues that are going to impact the numbers that we will see at the end of the year and we will talk a little bit more next sound off about the air travel situation. And we will talk a little bit more next SoundOff about the air travel situation Moving on. And we look at the biz and one of the big developments that took place just as we were going to the wire last SoundOff, and that was the announcement that Sony has taken a considerable bite out of Bandai Namco. Bite out of Bandai Namco they have signed an agreement, a strategic business alliance, to be correct from the press release where they're taking a 2.5% out of Bandai Namco, and all of this relationship is towards strengthening their relationship with their guests and I say guests because they're not just talking about their customers, but they're also looking now towards their own interests in the digital landscape.
Speaker 2:Sony has already invested in the past in location-based entertainment and they're now looking again at that opportunity. But the key focus of their partnership with Bandai Namco is the promotion of IP and product turned into anime and manga and branding that they can roll out internationally. Going back to what I was talking about last round off, what I was seeing at the hyper tokyo or hyper japan festival that I attended, that, uh, the japanese manga, anime and all of the brand and ip related to that was very popular. That is being, uh, you know, seen by what our friends at bandai namco have done with their cross-store business. Uh, and it will soon be seen with Sony developments and this partnership. And this partnership is the beginning of, you know again, the next round of merger and acquisition that we're seeing. I would argue that 2.5% is a very small bite out of Bandai Namco, but I think that this may be the beginning of something bigger.
Speaker 1:Yeah, I think this is interesting. I mean, one 2.5% is a small bite right, but it is an initial taste of what they might have access to and mostly again, ip distribution, ip disbursement amongst their primary audience through Gashapon, through Crane, their prizes, et cetera. But this also probably includes a healthy license fee. I would imagine that Sony is also getting a license fee from Bandai Namco too. I don't think Sony's giving up all of their IP licenses just for this 2.5% stake. So I think they're getting a little bit of both best of both worlds. They're getting some equity elements there while investing into Bandai Namco, and then probably some of that investment is coming around in the form of license fees back to Sony for some of that IP.
Speaker 2:We will see this as the beginning.
Speaker 2:Sony has already made major investments into other video game and IP holders in the Japanese and Western market.
Speaker 2:And again this goes back to what I was saying at the beginning of the year, that 2025 is going to be an M&A kind of year and this is not going to be the last of these kinds of developments Moving on and an interesting application of immersive entertainment here from our friends at the National Geographic Museum.
Speaker 2:They've spent about $250 million in developing their new museum and visitor experience to experience. It's a state-of-the-art renovation of an existing space that they've been utilizing, but that renovation has seen the inclusion of a much higher level of immersive entertainment into the mix. And this is quite a challenging development really for the rest of us in the location-based entertainment market, because we are now at the point where we are going to see the investment of um, you know, big sums of money from the museum uh sector and also from the visitor attraction sector into our bully wick. You know they are developing visitor attractions that are immersive entertainment, that have a ticket on top, you know that are immersive entertainment that have a ticket on top, that are even hoping to attract repeat visitation. And we that are running location-based entertainment facilities now have a brand new competitor to consider.
Speaker 1:Yeah, and what's interesting about this is they specifically have developed this to draw people, draw visitors who are coming to Washington DC to the National Mall, to the Smithsonian Institutes that are all the different Smithsonian museums that run alongside the National Mall, away from the mall to the National Geographic Museum of Exploration Obviously a for-profit organization that has large budgets that they can put towards something like this, Very similar to what International Spy Museum had done in the DC area to draw people away, and they've created immersive experiences and places for field trips and, again, these are things that are going to draw away from more of the regional, location-based entertainment experiences.
Speaker 2:I would point regarding the technology, putting my technology hat on, I would point that they are putting their investment into immersive enclosures, and not just projected, but led style, uh, locational, uh, immersive attractions, attractions, exhibitions, exhibits. I'm sure they they would use different terminology here but they're effectively attractions they are effectively attractions.
Speaker 2:There are ticketed attractions as well. They will be secondary spend and just just for those individuals charting the technology trend in this sector. About four or five years ago, this would have been populated with lots of virtual reality head-mounted displays. Now we are seeing them focus heavily on immersive shared reality approaches, and that is very telling. Telling. I don't often get to change my presentations within hours of having to give them out. I put my decks together, I sit on them, I maybe make some small editorial alterations and then present in my inimitable style of putting most people to sleep.
Speaker 2:The issue here is that this is a story that broke some days ago, some weeks ago now in comparison to when we're recording this or when this goes out, where the usual black-eye bad media event took place. For some reason, the local police force in this particular area decided to arrest a member of staff and, rather than doing the sensible thing of getting him out of his costume and giving him the walk of shame out the back door, they decided to arrest him in his full costume Chuck Entertainment Cheese, walk him out to the squad car and then work out that they're not going to be able to get him into the squad car with his hat on and then have to take it off and look embarrassed. This was really badly handled and by the unhappy faces of the patrons at the event it didn't go down well and it was obvious that some individuals had made some really big mistakes and most law enforcement agencies usually, when they make a mistake of this nature, take a long time to admit fault and try and redress the situation. You know, fraud marching an individual out of the building for fraud, unlimited fraud by all accounts was overplay and raised a lot of questions. And surprise, surprise, today everybody's smiles and happiness, an attempt by corporate and law enforcement to try and rectify the situation. The police officer in question that made the arrest is shaking hands with kids and smiling.
Speaker 2:Chuck E Cheese does not have his handcuffs on anymore and is willing to stand by the law enforcement agents of that local area, and even the CEO of Chuck E Cheese has turned up and is taking part in the photos. This is an example of what damage limitation tastes like for a large stock traded corporation. I doubt if this law enforcement agency had the capabilities or the competency to understand how much of a mistake they'd made, and I'm sure they had been working very closely with the marketing team at CEC Entertainment to get it just right. I have to accept that they're trying to make remission over such an appalling situation that they've got themselves into. I feel for Chuck E Cheese for having that happen to them and I admire and hope that that works out well for them and that they can regain the trust and push this into the bin of history regarding news, but what I really care about more is I hope that this law enforcement group has learned a serious lesson about how they deal with people who pay their wages.
Speaker 1:Yeah, yeah, and also, hopefully, other law enforcement groups have learned from this lesson as well. Right, so this is the Tallahassee police in Florida, and ideally they've they've learned that you don't walk a mascot out with their, with their head on and fully dressed as the particular mascot, no matter what level of, no matter what level of minor infraction that that employee has done. But hopefully this is something that other law enforcement agencies also learn from. You don't walk Mickey Mouse out of the front gate of Disneyland with the handcuffs, right. This is not something that should happen, should never happen again, and I appreciate what the team at Chuck E Cheese has tried to do to not alienate the police, right, which they could have done also.
Speaker 1:They could have taken a more litigious approach to it and we don't know what happened on behind the scenes. But you know, what we've heard anyway is that at least there hasn't to bring a partnership alongside the police force and say, hey, we're all good, we're all friends and it was just a mistake.
Speaker 2:I promote heavily when working with facility operations to do something called service day, which is you do a day at your facility each year saying thank you to all of the law enforcement uh, fire paramedics, as many of the people that support and serve uh the community uh, and to give them a chance because they're all family, men and women uh the chance for their uh their families to come and enjoy the entertainment. It also builds a bond between your staff and your team with law enforcement and with paramedics, because you never know the time when you need it. I hope that the squad commander in Tallahassee, as well as the local sheriff's department, has learned a lesson and has briefed the officers involved in the stupidity of their activity. Moving on anyway, and it's branding time. It is trying to reposition yourself and if it isn't your mascot being squad marched to a car in cuffs, it's your brand being dragged through the mud for not achieving any of the goals. And it was drawn to my attention how much our friends at dave and busters is going through the restructuring and trying to reel back. Uh rewind, I think, was the phrase used uh the situation that they found themselves in in actually throwing the baby out with the bath water, a quaint and uh traditional expression. That may be just a uk expression, but it literally means the most important thing to you throw out with the rubbish.
Speaker 2:And the situation we have here is that if you go onto the date and website now, a lot of the fantastic new concepts that they were promoting only 12 months ago have been replaced by more traditional approaches. For example, do a search on social bays and you'll find it quite difficult to go to the original concept of social bays that were launched only a matter of months ago matter of months ago. Do research more on the social entertainment aspects of Dave and Buster's and you're thrown back to the more traditional amusement and food and watch parties and we're even seeing the embracing of some of the more traditional entertainment approaches. We have now seen that Dave and Buster's is dropping in billiards again, billiard table structures.
Speaker 2:I'm old enough to remember the original Dave Buster's when it first rolled out in the 80s and 90s, and they used to include billiard tables and a billiard area, along with their live stage performance, which is long gone, as well as their early midway game layout, which has changed over the many years. It is clear that saner heads are trying to take the brand back to the basics. We are also seeing the promotion of their leaderboard and their tournament play feature, though I don't think they're promoting that as much with their staff as they are promoting it on their webpage. But the one thing that it is clear is that we all need to take a lesson from the pain and anguish that Dave and Buster's is going through, which is understand the experience that you're trying to give your guests. Oh, I think I may have covered that at the beginning of this presentation.
Speaker 1:Yeah, exactly. Well, what I find so interesting about this repositioning is they still have and I don't know the exact number it's hard to get an exact number but how many of their locations have the social base still installed? And from at least what we've read so far and what we've heard so far is they're not planning to take them out, they're just repositioning, and so when you go to their website, you're right, you can search for Socialbase in their search bar, which is actually a really terrible search experience anyway, but they've taken it out from their navigation. So you drop down in the play section. There's nothing there about Socialbase.
Speaker 1:They have rebranded the name of their SocialBase to GameSuites, so they are calling them GameSuites, but even still, GameSuites is not in their dropdown in the navigation, so you are not going to do it. The only way you can find anything else about those GameSuites is if you actually go into the search type GameSuites or SocialBase and it comes up with their different experiences in the search results and you can go onto those pages which have not yet been removed. They are still there, but you have to search for them specifically and they are very clear about the fact that they're only in select locations as well, and I think this is underselling the experience that you could potentially have at a Dave Buster's with those game suites.
Speaker 2:They have literally moved the pendulum too far in the opposite direction and sadly, I get the feeling that some of the people that are making these decisions don't come from an entertainment background, and so they don't understand the problem that they put themselves into, which is you have installed these things within your operation.
Speaker 2:You are taking up real estate, power and staff time in operating these things within your operation. You are taking up real estate, power and staff time in operating these things. Ignoring them from your marketing and promotion is underselling your operation. I would also point to some other errors that they've made within their, shall we say, sharp knife approach to their web pages, where they've killed active pages that are linked to TripAdvisor reviews, meaning that people that would click on a TripAdvisor review and want to see the particular item that the individual is talking about clicks on a hot link and goes to a 401. Not a good move for a corporation of this size to do. I hope that these are growing pains under the new CEO and that it will take a couple of weeks for them to get their feet fully under the table, but I would argue that they don't have a lot of time to start learning lessons.
Speaker 1:Last thing I'd say here on this one is that billiards is the wrong direction to take.
Speaker 1:It's adding those back in for Dave and Buster's One. It cannibalizes one of the differentiators between a main event and a Dave and Buster's the fact that the main event has billiards, has a smaller arcade floor, obviously has bowling, laser tag, more of a multi-attraction mule, as you would say a main event. So to bring in billiards is just cannibalizing some of that foot traffic that would have been driven to their sister brand under main event. Secondly, if they're looking at optimizing their revenue per square foot out of Dave Buster's and they already have an arcade floor, taking arcades out or moving things around, removing what would be sports viewing and food and beverage sales and putting in billiards, that has two to four people maybe around a particular area, generating very small amounts of revenue for that square, for that square footage, is also not the right way to go if we're trying to maximize revenue per venue I'm not here to give them free consultancy and I feel very strongly that they should have people advising them on the basics.
Speaker 2:But I will just point to one simple observation. They've taken off thethe-shelf billiards without giving themselves enough space to put food and to have people gather and to be social about it. If you want to totally wash your hands of your social bay, fantastic, but you can't wash your hands of the social entertainment that you're trying to offer. You have screens there. You should have better layout and better perch capability for food, snacks and drinks. If you're going to do that but again, you're quite right say, let's put some billiard tables in there. I know a man who supplies us the main event. We can do it here and in a couple of months time they will understand why we said that is a really bad move.
Speaker 2:Moving on, and we talk about the tech, uh, and we're seeing some interesting developments in the new wave crane machines. As I keep on going on about, our friends at Wallah have launched a brand new range of what I would say new wave smart crane machines. They're incorporating RFID tracking so they know the prices that they're giving out, and they can be linked into a smarter system so they know the prices that they're giving out and they can be linked into a smarter system. If you're going to operate the leveling up capability, then you know what to populate your machines with and if it's linked to RFID, then it means that it's smart for the customer and smart for the operator. They are brighter and lighter, they're supporting all of the LED and the big screen spaces and all of that.
Speaker 2:They are more of an entertainment system than a vent entertainment system and they are an example of what we'll be seeing a lot of in the next couple of weeks, especially on the floors of IALPA, where we will now see a major pivot for the amusement industry away from what I call the traditional crane machines towards the new generation, the next wave of crane machines. And I know some of the stick-in-the-mub gatekeepers in the amusement industry look down their nose at me talking about two types of crane system. Especially if you've got a warehouse full of the more traditional crane systems, you hope that you can get rid of them at the same time as people are clamoring for the new wave systems. But I'm fighting my corner religiously and saying we're entering a new market now and trying to sell the old tech ain't going to fly.
Speaker 1:No, and trying to build any sort of venue with the old tech is also not going to fly. I mean, this is really on the bleeding edge of the new wave cranes and this is the new wave of business going forward.
Speaker 2:It's interesting to see Wallop pushing heavy on this, and I know that they're going to have a presence of both IALPA Europe and IALPA Orlando, obviously and I'm looking forward to actually standing by one of these machines and giving them a serious go-, over, especially their RFID component, because that is a bit of secret sauce that can mean the difference in revenue generation for some things. On virtual reality, this is not a new concept, but it is a concept that's now being given a new spin, as it were. The idea is that if you have a group of individuals in a tour bus going around a tourist destination, there's two ways you can address the problem. You can have someone act as their navigator, giving them either a potted recorded or live spiel of the various areas they're going around, or you can immerse them in information about the experience, and we're seeing virtual reality used in a couple of locations. I reported about two years ago on an experience around Rome that used virtual reality headsets while you're sitting in a bus. I've also reported on the alternative version that was launched in Japan, which used digital screens, where the windows were replaced with digital screens that supplied the virtual experience as you drove around the facility. I always feel a little bit funny about this, thinking that you're in a beautiful locality and you're putting a headset on or you're blocking up the windows with digital screens, but if done correctly, they can be compelling.
Speaker 2:This particular approach in Hawaii is interesting. It is mixed reality, so you get to see the vistas outside and then you also get to see the virtual objects inside. But the team behind this were actually promoting this as a kind of a self-sustainable green approach to this, where it allowed them to utilize the transportation system this particular transportation system and our people to experience the lovely vistas without jumping into multiple hire cars or into multiple coaches and traveling backwards and forwards between that space. Whatever the spin shall we say on this, this is yet the latest approach of a mixed reality immersive tourist attraction, of a mixed reality immersive tourist attraction. Now I also have a kind of hidden feeling about this that this may be the beginning of the hard questions we're going to have to ask ourselves about how many times we can utilize head-mounted displays in the tourist and the attraction market before our audience demands something different. But that, maybe, is a question for another day.
Speaker 1:Yeah, I mean this one is interesting to me in that it seems like anyway, in reading through the press release and reading through some of the information on the site, is that they are actually driving to particular tourist destinations like Waikiki. It's the travel to those locations that they are putting on the headset. At first I thought maybe it was like they just ride around on a bus in hawaii and like the entire experience is vr and I'm like okay, but it's, it's in between that, this particular locations, and okay, it's interesting, it's maybe a gimmick of some kind. I think it would be good to have some period maybe where that happens, but then you can still take your headset off and just experience the beauty of where you've traveled to. It seems a little bit as somebody who's done a tour bus around Oahu and some of these areas. I very much, thoroughly enjoyed looking out at the you know all of it right and seeing everything, not just the particular destination.
Speaker 2:So and this is pass-through technology, so you can turn off the virtual reality components and see the world around you as well as be immersed in the virtual experience. It's much more than some of the earlier systems where you put the box on your head and that's all you got to see.
Speaker 1:Yeah, yeah, yeah, you know what? Look again, I like these types of experiments. It's like when we talked about the dream park situation that's going on. These are things that we need to be experimenting with and pushing and seeing what consumers and guests are interested in, and so like the experimentation here, even if it's something I personally wouldn't be as interested in I'd like to experience it, just to see how they do it, but again, it's not something that I would rush towards at the moment.
Speaker 2:But it would be a busman's holiday for me. That's it. Uh, we've just had comic-con finish in San Diego and it was clear that immersive entertainment was not as big a player from the virtual reality side as it has been in previous years. Previous years of Comic-Con. I've been inundated with videos of special virtual reality presentations and attractions created. We're now seeing more of a digital approach by the event.
Speaker 2:For those of you that aren't familiar with Comic-Con, it is a gathering of all the latest IP and brands from film, comic and toy and streaming services. They gather in San Diego. Some people get to dress up in cosplay and other operations get to sell the merch and the toys and the periphery of supporting the brands, while other TV studios and movie studios promote their latest films or coming attractions. Studios and movie studios promote their latest films or coming attractions. Here we had a game developer create a, you know, develop a physical recreation of their virtual environment which people could interact with, and they had some especially created amusement products there brawl, star, star brawl, depending on your point of view. They created a star park enclosure outside.
Speaker 2:Very compelling, very enjoyable, but it incorporated certain elements that we would recognize from the location-based entertainment. They had an immersive simulator Thank you, brandon. They had an immersive simulation ride. They had a number of kind of what would be seen as gallery attractions outside and inside their various tents. They is the kind of thing that people would kind of expect from the dream park concept if they turned up the dream park with the ar being a secondary component on top of this. I'm not sure how how much our friends at two-bit circus are going to go for this level of themality, but it is important for us to see a physical environment being used in the marketing and promotion, and it's something that we will have to at least achieve, if not better, when we're talking about our own locations. If your mini golf site doesn't look as sexy as an entertaining as this pop-up attraction for a convention looks, then you've got some serious questions to ask about what you're trying to do.
Speaker 1:Yeah, I think the implementation of this is really well done. Obviously, they're drawing in fans of this game, people who are already playing it, which is a PVP kind of three-on-three game. But they've really implemented this well with the cast as well. So not just the attractions, but the cast is interacting with the, with the cast as well. So not just the attractions, but, you know, the cast is interacting with the staff or, you know, with the guests and, um, you know, done really really well here.
Speaker 1:So, uh, I think that this is, um, almost like a camp style pop-up. So like they've got the retail, they've got the immersive experiences, they've got a chance for people who love this brand to come in and experience it in a pop-up location. You could very easily see one of these things popping up in a shopping mall location, very similar to what Camp has done for so many other brands and IP. And definitely would agree with you. If you want to compete with a pop-up we'll remind people this was a pop-up for a game, an online game then you have to make sure your themality is up to par.
Speaker 2:Your guest experience. Keep on going to ram that home. We started with this. We're going to keep on going on about it. If this level of guest experience can be achieved and you're not achieving it, then they will be disappointed Moving on and we kind of jump into one of the harder topics at the moment, which is what happens in the consumer sector regarding xr technology.
Speaker 2:We have to be mindful because this has a bleed into our sector. If we are embracing the latest xr, augmented and virtual reality technology, what happens in the consumer sector black, black eyes and all hurts us and we need to position ourselves to distance ourselves from the storm. And the storm has started to build. Our friends at Meta had their second quarter investor call and they had to break to the individuals on the phone call that they have achieved the magical number of $4.53 billion in loss that they have achieved for the second quarter, that their sales were a measly, and I say that with reserve that, uh, you know, uh, with reserve uh 370 million, but that does not bear, you know, it's not a pinprick compared against the amount of money that they have invested and are losing uh in their xr investment.
Speaker 2:Uh, what, um, you know, their founder decided to do uh by venturing into his metaverse objective. Now the company has tried to spin positivity out of this and they've said, even though their virtual reality headset systems weren't selling that well, they have at least seen an increase in their sales of their augmented reality or AI, enhanced smart glassware. But it is nowhere near going to alleviate the problems and it was interesting that in the investor call, metaverse was only mentioned once in the whole of the call. Sadly, virtual reality wasn't mentioned at all. Moving forward and, of course, meta is positioning itself towards the end of the year.
Speaker 2:As it has been said by many of the executives within the company, this is a make-or-break year for its investment into the metaverse and into virtual reality. They have promoted their investment into developing their augmented or AI-powered glasses. I keep on calling these AR light, which is that they're just depending merely on the audio and the video capture and some limited search engine features, rather than the full overlaid HUD, heads-up display kind of approach that some of the next generation AR glasses are hoping for. We also had an interesting statement from their R&D team which kind of threw some shade into our sector, where they felt that through research that they've been carrying out, through supporting virtual reality, that they have ascertained that there is a Goldilocks zone for how long the average punter, consumer, customer is prepared to enjoy or immerse themselves in virtual reality. You know they turned around and said that the optimum timing is between 20 to about 35 to 40 minutes, and anything shorter than that or anything longer than that, anything shorter doesn't get the immersive experience across to the user. Anything longer than that can be uncomfortable and wearing on the user.
Speaker 2:I wouldn't argue with that observation. Next they'll be telling us the sky is blue. But for a company that has been talking about for a long time, about long-term usage of their head-mounted display three-hour usage, three-hour battery, able to play this game for two or three hours it's kind of surprising to see that the moon isn't made of cheese and throwing some shade at us in the location-based entertainment industry by saying that we can't enthrall our guests in an immersive experience because we've only got a few minutes to achieve that kind of misses. The point and I think that is really where we are with our friends at Meta, which is that they have some really hard decisions that they're going to have to make in the coming months and it is easier for them to kind of try and paint their business into a particular corner as the only providers and the only people that understand this technology allows them to kind of lord it over the rest of us who've been working with this technology for a long time.
Speaker 1:And you know it's interesting that they're finally coming to terms with the 20 to 40 minutes session length. This is something we've seen in location based entertainment for a long time and really I would argue that 40 minutes is absolutely the max. You know there's when we have experiences, especially large arena VR arena experiences, that are 45 minutes. You know 45 minutes and you know by the time you're done, you're done and we have things like verse immersive, which is obviously augmented reality, but you're still head mounted display and you're pushing the max on a verse immersive experience as well at 40, 45 minutes and that really is the most that you can go and still really enjoy the time because the headset is really wearing on you, especially even as an adult. You put that headset on a child and it's even more daunting and I would argue that time limit should be even less for, depending on the age of the kid who's actually using the head-mounted displays.
Speaker 1:I've never once thought myself when you read Ready Player One, you watch the movie if you didn't read the book. And this idea and concept of that I think meta was trying to push for so long, which is you're living effectively an alternate life inside of this headset, inside of this metaverse totally virtually. That is never what I thought the metaverse would become. The metaverse is really this overlay on the world in general and through augmented reality, through how you interact with the world through other devices that are connected, devices that aren't necessarily your phone, but that help augment your life and your connectivity to each other, and also to the broader internet and now to AI. That is really where I think and it sounds like their focus is moving, which is also where I believe the metaverse, the overarching connected universe that we all live in and exist in and work together in, is the direction they should be going.
Speaker 2:The biggest problem was that at the beginning of this phase of VR and, please understand, I've sat through a number of phases of VR the individuals that came to the table had a particular opinion that they felt that people wanted to live in this virtual world for the rest of their lives, that they felt that everything that they read in the quite poor book and that's a personal opinion, but I felt that the dystopian narrative that was painted in Ready Player One was not really well flushed out, though it had a number of member berries regarding classic video games that seemed to appeal. Most of those individuals that tried to sell that message to the head of Meta so much so that he fully embraced the Metaverse have disappeared. So that he fully embraced the metaverse have disappeared, and now we're seeing a supertanker desperately trying to change direction from its original positioning. The removal of the phrase virtual reality from the lips of the employees, internally as well as externally, with their marketing, and now the focus more on AI and AR rather than VR, is very telling For those in the VR consumer market. This is kind of like being a beer manufacturer suddenly finding out that the pub has stopped selling alcohol. This is going to be very difficult for some developers, especially ones that have seen success. We have seen one-hour, two-hour game experiences in consumer VR being very successful. That was using high-end VR headsets rather than the mobile phone processor standalone VR headsets that Meta pivoted to some years ago. And again they have painted themselves in a corner. They have felt that they've made mistakes, so they now want to pull the rest of the industry along and now force them to admit this.
Speaker 2:I would argue that just because meta says it is so doesn't actually mean that it is so. And again, in september we will be having this conversation again. Uh, once meta reveals their future plans for their metaverse and vr ar ai, uh investments, uh, at connect, that takes place in just a matter of months' time from where we're recording this, and at that point I think we will see a major change, and that change will have impact on us in location-based entertainment. I'd rather touch more about this in November, when we're standing on the floor in IALPA and actually see how much VR is actually there Moving on. And now a new component well, not such new, but a recurring component of our sounds office AI, or augmented reality, or autonomous reality, or computer learning, machine learning, whatever you want to call it. We are at that stage now where AI is directly having a regular impact in the out-of-home entertainment sector.
Speaker 2:I touched upon in the last sound off the issues with the launch of the Elvis evolution system, Again going back to what I've said at the beginning the failure by the team behind the project to actually explain and define the experience that they were going to be offering the guests, and now we're hearing a lot more of really the misinterpretations they decided.
Speaker 2:Unlike ABBA Voyage, which you see there on the right, the holographic immersive experience, live stage experience that they achieved was not going to be what they were hoping to do with Elvis' evolutions. What they were hoping was to create a reinterpretation of his 1977 television performance within a live environment, as if you felt you were there, and they actually have made statements defending their position, saying that they didn't want to go for creating a holographic version of Elvis. They wanted to use the latest AI technology to upscale the archive footage and create a much more compelling audience engagement. Using AI to upscale 1970s footage is a decision that they decided to take and they decided to marry to projection mapping and live actors, and that is a decision that they will have to live by based upon the guest experience. But it is interesting how much that we are seeing AI being used now to augment and improve footage as the alternative to maybe using a more holographic approach to live presentation.
Speaker 1:Yeah, I mean, I think what's frustrating about this? I mean again, not only does it go back to the very first thing we talked about, about setting proper guest expectations, but you know we are seeing more and more ai come temp set, infusing ai or, uh, you know, regenerative we'll call generative ai at this point anyway into into attractions, into attraction creation, into marketing, etc. And yet very little. In fact, only one session for IAPA Expo education this year is going to touch on AI at all, and it happens to be an FEC lunch and that FEC lunch is being done and the speaker is a person who is from a social networking company that is there to promote their particular product while they're talking about AI at FEC lunch. And so my frustration here is that we have all these experimentations happening, arguably unsuccessfully, many unsuccessfully implemented, and we're not providing any proper education to the broader market to properly deploy and leverage the incredibly capable tools that we have available at us to improve and enhance the guest experience and the attractions for our guests.
Speaker 2:It is difficult for some of the trade associations to embrace new trends and technology. The reason why we are lucky enough to be able to do Sound off and to talk about trends is because no one else is, and you know, part of the reason for that is it's very difficult for some of the gatekeepers in our sector to embrace new technology when they're trying to control the market around them. I would also argue that it took a very long time before we were even invited to do presentations about the latest phase of virtual reality impacting the entertainment market before, you know, grudgingly, it was decided that. You know we needed to be part of that. We hope that some decisions will be made after this year's show to actually embrace the true, that some decisions will be made after this year's show to actually embrace the true.
Speaker 2:And it's not just generative AI being used in the graphics side or the visual side, but also, as I'm going to touch upon in a minute, the appearance of the autonomous technology driving the latest robotic and service systems, the latest robotic and service systems.
Speaker 2:Great example we have seen of how AI and what would be treated as mixed reality or real visual imagery can be married together. A demonstration taking in real time visuals that are being captured through a mixed reality headset and are then being turned into a augmented AI environment, a kind of cartoon or whimsical environment, depending on the prompts that have been set into the system. This type of application will definitely see more uh duplication in location-based entertainment. If you can put people in a physical environment that is real and then superimpose a virtual recreation of that environment that marries with the physical elements, that is what I would call ai projection mapping, as it were. It is literally taking uh, the spatial environment, that physical environment, to a new level. We'll be seeing a lot more of this type of technology and I think it will find more of a home in location-based entertainment to start with than consumer, because of the various limitations and the availability of this type of technology in consumer. But I want to stick a pin in here and say remember when we talked about this, watch this space.
Speaker 1:Yeah, a tool like LifeSkin is something that will really allow a smaller budget, to allow an enhanced guest experience at a smaller budget and also, I think, more importantly, to be able to rapidly iterate and change that experience and change that physical environment without having to spend lots and lots of money in theming and retheming and restructuring your layout. It allows you to potentially even try out different experiences before you put in permanent theming. For example, you can try what you get different feedback on, what people thought of different things, without having to be able to again spend lots of money on that upfront theming and also be able to iterate and change on a dime, even potentially based on a choose your own adventure type model from one room to the next, and be able to have different, unique, individualized, personalized experiences.
Speaker 2:If any of our audience is still finding it difficult to understand how this could play a part in their facility, I'll just say seasonality. Just think click of a button, it can be Christmas, click of a button, it can be Halloween, click of a button, it can be an Easter-themed environment, without the need of having decorations but having digital or physical decorations. And, of course, the robots are coming. Anyone that follows my social media feed will know that I pick out the usage of robotic systems, autonomous control systems, in the international sector. Some of it has implications for us in location-based entertainment, some of it doesn't. Well, you know.
Speaker 2:The obvious implications for us is the transportation, and Area 15 is going to be one of the first venues that will be using an autonomous taxi or robo-taxi system at their facilities. You'll be able to stagger out of the doors of your hotel or stagger out of the doors of Area 15, type in your app and a robo-taxi will appear and whisk you away. It is really Uber without the driver, but it is the beginning of something that we'll be seeing a lot more across international theme parks without the driver, but it is the beginning of something that we'll be seeing a lot more across international theme parks, where transportation used to be handled by coaches and buses. We will now see this replaced by robotic systems, and our friends at ZooX have already deployed a number of their systems in the UAE. They've just now started to deploy them in high tourist facilities in North America, and I won't be surprised to be run over by one of these in Vegas when I'm next out there.
Speaker 1:Well, hopefully you're not run over by one of them. But I think what's great about this is obviously not only is it ferrying people from the Strip over to Area 15, but, as Area 15 adds Phase 2, well, as they open Phase 2 and they add Phase 3 and 4 and 5, this now creates a system, a shuttle system that's autonomous, that is shuttling people from the John Wick experience to the main Area 15, to then back, maybe to the Museum of Ice Cream, back to the Universal haunts, and so they can move people around very easily, very seamlessly, even within their own facility, not just, obviously, from the strip shuttle is the the best way to look at it.
Speaker 2:This isn't really a robo taxi. It's a robo shuttle and you can use it for wide scale hotel uh to uh the uh, the compound, the area 15 hub or within the area 15 hub, where you wouldn't normally have a taxi driving around the space. These shuttle vehicles will work much better and it will take. Hopefully, at some point in time, the large theme park industry will embrace autonomous shuttle systems as a possible future, Though some of the venues are wedded to their current infrastructure and may be uncomfortable to migrate over to this type of expensive tech. But you know you can't be a king canute about this. You can't hold back the water.
Speaker 2:Anyway, I've taken enough of your time. Just for those watching and listening. Please understand that we have new Stinger reports going out, as well as updates of our latest issues of Entertainment Social Arena. Please subscribe. Please make sure that you're still receiving this. Don't just depend on the social media feeds. Please consume. Remember you can watch the videos on YouTube, but you can also listen to the audio, both of the service that you're listening to now or watching now, but also to the newsletter. And don't forget to give us likes and appreciations and supply us comments, even email. I'm always interested to hear some of the questions and I thank those that have pointed me to some of the stuff that we've been able to incorporate in our presentations.
Speaker 1:Excellent, all right. Well, kevin, it was great. Another excellent sound off, and we will see you on the next one.
Speaker 2:Have a good one.
