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Sound Off #88 - The Kidult Revolution, CEC Adventure World, and more!
Sponsored by Intercard!
On this week's Sound Off with Kevin Williams, BW and Kevin explore the growing influence of "kidults" in the location-based entertainment industry and how their spending habits are reshaping business models. This demographic shift is forcing operators to rethink their attraction mix, F&B offerings, and overall venue design to capitalize on adults seeking playful experiences with premium food and drink options.
• Kidults (adults seeking entertainment experiences) now represent a major revenue source for many entertainment venues
• Traditional family entertainment centers are discovering that evening business is driven largely by adults without children
• Venues like Swingers and Playground are specifically designed to deliver experiences for the kidult demographic
• Even redemption models are evolving with prizes like shot glasses and adult-oriented merchandise replacing traditional toys
• Chuck E. Cheese is expanding beyond its traditional model with new active play facilities and arcade-only locations
• F1 Arcade is testing a smaller-footprint concept called F1 Box with 12 racing simulators but minimal F&B offerings
• Japanese amusement sector remains vibrant with Silk Hat taking over the iconic Akihabara location
• AI integration is becoming mainstream with Chuck E. Cheese implementing an AI chatbot for customer service
• The XR consumer market is shifting from VR headsets toward AR and mixed reality glasses
• Location-based entertainment venues can differentiate by offering premium VR experiences not available at home
Check out the latest trends and developments at LBXCollective.com and subscribe to our newsletter to stay updated on industry changes.
Are you on the edge of your seat Because we're about to sound?
Speaker 2: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. Let's buckle up.
Speaker 1:All right, well, welcome everybody. To Sound Off with Kevin Williams, this is number 88 for August 26th and we are. It's the last one for August, last one for this. Do you consider summer over in August, or do we? Is it like a Labor Day? What is the end of summer like in people's minds, you think?
Speaker 2:America Labor Day, that's when the Depression and the children jump out of windows knowing it's back to school. For most of Europe, I would say that it is hitting September as well.
Speaker 1:Yeah, yeah, everybody's trying to capture their last holidays, their last breaks, vacations, whatever you know, so got it All right. Well, that being said, what do we got for this round of a change in my mind?
Speaker 2:Well, this is a a tricky one, because we're talking about an audience that I'm not sure that many in our industry have got their brains around, but the question is out there. That is, the kidult. The kidult in our midst, our new audience, the persons or the individuals, the audience that is now funding our business more than what we would normally traditionally think of as our audience, being the spotty-nosed, you know, 9 to 12 to 16 year old with parents. Uh, their spending power and their availability in our market is not the same compared to the kidults, who are the adults that want to have a experience and entertainment, have disposable income and uh, you know, are prepared to come back again and again and, most importantly, they have money for booze and cocktails, beer, which is the driving force for a lot of entertainment facilities, even the ones that aren't. In the competitive socializing arena, those in the traditional still see their hospitality component as a major financial generator.
Speaker 1:Yeah, it's like in Toys R Us. They used to have the slogan where a kid can be a kid. This is now. You know, we've got to create venues where adults can be kids and I think one of the we began to see this trend I want to say let's call it 15, 10, 15 years ago, but probably more than 10 years ago where the venues recognized that they needed to build the aesthetics, build the F&B or the aesthetics it's also the attraction mix and really building venues around the adults or the kidults in general, and even just the experiences, right. So new experiences that are out there that are really targeted at that 20-something plus or even up into their 40s, and making sure that there's experiences out there for them.
Speaker 2:There's an operator that's just putting in some new amusement machines and we had the conversation with them about. You know, this particular machine is very popular with this audience and all that and he goes I'm not aiming at that audience and we had to say, could you look at your numbers please? And he had to go away and pull out, funny enough, his embed stats sheets and where he was able to have captured the age and the playing routines of those customers, he suddenly was faced with a fact that he had been ignoring, which is that he wasn't targeting nine year olds and six year olds or eight year olds or parents, he was targeting kidults. Those individuals that came in to his late-night, post-six-o'clock business were dropping dimes, not in Down the Clown, but they were dropping dimes in these particular machines that appeal to this particular audience.
Speaker 2:I would say that anyone that's done their research recently would be able to pull back, especially the video amusement side of the business, and look at the games that have been developed and they will see that these games are not being developed for young audiences in the whole, but they're being developed for a much more mature audience, demographic. You look at Cyberpunk, for example, and that is not going to be appealing to your redemption crew unless you have some real hard-nosed young rugrats in your audience makeup. All of this aside, if you're going to target the spend capability of kidults, then you have to appropriately dress and develop your facility to appeal to them. You have to improve your F&B offering and you may have to ask yourself some hard questions about your themality and your branding. These are the type of questions that I know a number of family entertainment facility operators are now asking themselves about. How social do they go and how much do they change their mix to appeal to what they would call older audience members? But we will call for this point. Kid arts.
Speaker 1:Yeah, Even places like swingers. So I would say that you have to think about changing your redemption model as well if you want to even have a redemption model right. So, obviously, but let's say you do right. So you have swingers. They have their carnival, which is like their arcade. Obviously, swingers is mostly focused on high-end themed mini golf, but you've got, they do have an arcade component and the redemption store is basically a high, is basically a merchandise store, but it's all. It's shot glasses and it's coffee mugs and it's things that are obviously focused on the adults. They didn't have anything kid related. They had plush, but it was plush that was specifically targeted at the adult. You know adult style plush, and so you know, and a couple, a couple other cranes things that they had. So, even from a redemption standpoint, we need to rethink what that should.
Speaker 2:You know what that can potentially look like if you are targeting that kidult and the argument is that is swingers uh, the, the mini golf experience a entertainment facility or a social, uh entertainment? It is definitely a social entertainment facility. It depends on its f and b, especially its cocktails, as much as it does on the mini golf that you're playing, and they took a risk in changing their model to include amusement products, reskinned amusement products to suit their audience, but it is still an experiment. There's only two of the swinger facilities that have the Carnival component and we're yet to find out how profitable it has been for them, but I get the feeling that it was a pivot in the right direction. Now take that one step further.
Speaker 2:How many mini golf facilities will now think about adding an amusement component? They would be thinking more in the adding an FEC kind of drop in a couple of arcades and lots of redemption type stuff aiming at the run rats when, in reality, they are going to now have to think. If they do add an amusement component, it's going to have to follow that type of model, and swingers, chuck's Arcade and some of the barcades at the retro arcades are the model that you'll be following and that is quite a change for our industry. Um, a lot of the street route. Mentality of the distributors will have to be reprogrammed to be able to offer the right kind of mix for kiddos, if they can even tell it yeah, well, and it's even particularly, it's particularly difficult for, again, the amusement, uh, the amusement industry.
Speaker 1:But you're also seeing the creation of venues that are targeted specific, full venues that are targeted specifically at the kiddo, like play playground in nashville and las vegas. If these are experiences that are really not targeted at teens and younger, they are targeted exclusively towards adults. Now, could a teen go and run around and have fun at a playground? Sure, maybe, but that's not when you go there, that's not who you see playing the games, but the entire facility is really created to deliver an experience for the kid. Alt.
Speaker 2:Could a kid be happy with the selection of redemption machines at a carnival at Swingers? I doubt that they're going to be as enthralled compared to what they will get at Now. That said, I am sure our friends at CC Entertainment have worked very hard to make sure that Chuck's arcade machine mix appeals to the broadest.
Speaker 1:Yeah, yeah, totally, all right. Well, coming up after the break, we will dive right into the trends. Intercard is the only cashless system designed, developed and manufactured all under one roof. 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 become one soon.
Speaker 2:Well, thank you, intercard. Let's straight into the trending aspects of the technology. We're in August, so a lot of the news is, shall we say, muted at the moment. There is development going on, a lot of development going on, but some of the reporting isn't shouting this from the rafters.
Speaker 2:One of the interesting developments that I came across regarding the economy impact was how casual dining has seen its share prices and its share dealings skyrocket compared to the quick service restaurants.
Speaker 2:And quick service restaurants are the McDonald's and the Wendy's and the Burger Kings of the world, where the casual dinings are the ones where you have to sit down and you know it's still a pretty set menu and it is a quick in and out service on occasion, but it is still a selectable menu, customizable by the uh, the individual from the menu selection, rather than being faced with options such as your whopper deal or your big mac package.
Speaker 2:And this kind of change in the stock market's perceptions of this is based upon the reading of the room, about seeing how much these venues, in comparison the casual service to the quick service, have changed their menu prices, and one of those we've seen McDonald's, and we've seen Burger King and others raising very gradually their prices to meet the impact of the financial conditions, where the casual dining industry has taken a lot of this on the chin and has consumed those price impacts which they're going to sadly have to offload when we enter the 2026 market. So again, the stock market kind of giving us an indication of how the cards are going to fall in the service industry, which obviously has an impact on how we, with our F&B components, are going to have to play the game.
Speaker 1:Yeah, yeah, this is an interesting trend. I was also reading I mean seeing the McDonald's numbers here. I'm surprised to see when these numbers declined as much as McDonald's has a McDonald's and I walk out if I would actually buy McDonald's food. But let's say I go to Chipotle and I walk out and it's $18 for my meal at Chipotle. Well, ok, now I can spend $25 and have a much better experience sitting down, having better food and, granted, it's not as quick. But it does begin to wonder okay, am I going to pay the extra $7 for a potentially better experience when the prices are already as high as they are at the fast casual chains?
Speaker 2:You're making that decision. You're making that mental calculation about how much more you spent where a couple of months ago you wouldn't have been making that decision. You would have just gone with preference. I would also argue that these stock price indications tell us more about the undervaluing. Uh, one of the reasons why I expect to see when they wendy's impacted the same time as mcdonald's is because some people's portfolios include both of them. When they make a decision on one it impacts the other. But if you pull those numbers out, I am going to expect that all of them are going to converge closer together once the pricing impacts come from 2026 onwards. And again, if you're used to seeing recessional or economic downturn numbers in fast food, you see the quality of the experience rather than the quantity of the experience usually rises. We're beginning to see this in the UK with the impact on the dining. People aren't going out as much to dine but when they are they're spending slightly more because they want a higher experience, while at the same time we're seeing coffee, uh, houses, uh, also, uh, seeing a surge. That is, the sit down and make a coffee last quite a long time while you're on your laptop kind of approach to business anyway.
Speaker 2:Moving on into the biz, and I said I would tell you who was going to be going into aca harbour. Well, we can tell you now, silk Hat. Who the hell is Silk Hat? At least they're not called Fox Hat. Old joke, my old friends get that If you're not familiar.
Speaker 2:Well, the Japanese amusement sector is still quite vibrant. It's not. The facility operation is being dominated by the big names. I keep on going on about Genda all the time. But there are the Taitos out there with their set up of chains and there's other chains but they're less well-known internationally but they still have quite strong coverage. Matabe have Matahe, I've got to say it correctly. They have their silk hat chain. They also have a kids chain and a crane facility chain, if my memory serves me right. But of their silk hat chains, very well loved nice population, mainly Tokyo-based, but they do have great coverage on the islands. They have about 11 facilities and they have done the deal with the owners of the akihabara facility to go in there. Now I'm told that the red awning is coming down. That's funny because red hats branding is also red awnings on a number of their facilities. So I don't know if the owners of the site are going for a much more striking approach, or maybe that's where the problems are in their rent and they need to change them through and update the facility. Anyway, either way, we're seeing an amusement chain going straight in there, so that kind of shoots down the doom and gloomers in the consumer games industry that are saying that the Harbour closure was yet again the death of the arcade sector. I'm looking forward to seeing how they're going to report this news.
Speaker 2:Talking about Silcat two pieces of news regarding the train in a matter of moments. And our friends at Konami hold their tournament game series every year, their Bimani Pro League, which has all of their music B-Mani, beatmania games. The top players gather and, as we're seeing in the esports sector, we're seeing in the music game tournament sector, each of the chain of Japanese venues have their sponsor teams, which is a logical move. It generates repeat visitation and it's good publicity. And surprise, surprise, the Silk Hatch team won this year. I'm still trying to find out who's going to win the individual components, but this is the team league as part of the pro league. Aspect of this Doesn't get a lot of publicity outside of Japan, though there are a lot of people internationally that are big fans of the music rhythm game sector, and I know that they will be avid followers of this, as well as the individual finals that are going to be coming soon.
Speaker 1:Yeah, interesting. I'm trying to do some more research into Silcat. That's a brand and a model I haven't heard of. There's obviously a handful of locations, although it doesn't seem like there are many, but maybe there are. But I also cannot find their website. I cannot nail down actually what, what a silk hat website is. I'll send it to you after this podcast oh, if you could, that'd be great, because I'm I am not able to find it at all.
Speaker 2:It's, uh, it's always the hardest part for individuals to research the japanese market. It is very hard and I have to depend on some very unique search tools to be able to hunt these sites down. These tools do not teach me how to pronounce the names correctly. The Japanese market is going to be very important. The latest Stinger report talking about how much the Asian culture is impacting licensing and branding, be it from the popularity of the Marios and the Sonic movies to the way that we're seeing these new clockades embracing a very strong Japanese mix. It is a factor of the trends in our market and I think those people that ignore the Asian influence will be very unhappy that they did In our constant Genda moment, and our friends at Genda have done a deal with Shobi Systems.
Speaker 2:Now this is a company that I would call the meow wolf of tokyo. Um, when you do the research into this uh company, they've had a number of pop-up openings. Their venues are very striking, they're very art infused, uh, and they had been working on rolling out a major resort not a resort, a major installation, let's call it a land or a large facility venue. That took a tumble during the COVID period and it's only now that the operation has kind of crawled out of the malaise during COVID. Japan is one of those countries that really COVID did a number on and it's taken a while for a lot of the service and entertainment side of that business to really get momentum back to where they were and surpass where they were. That has happened now and in partnering with Genda, genda will be bringing their specialties regarding the operation as well as dropping in amusement components. But Kiwari Monster Land will be opening this winter and I get the feeling that it's going to be as successful as we've seen the Meow Wolf component has been for our friends at Area 15.
Speaker 1:Yeah, just looking at some of the pictures here, it feels very Japan. It feels very much Japanese.
Speaker 2:Lots of cosplay as well.
Speaker 1:Yeah, lots of cosplay. I mean, they actually have live cast members who will go around and you'll interact with, so I'm assuming that they will also encourage you to go and be dressed up yourself. It feels very, very much like this will be successful.
Speaker 2:It's an interesting one and I just want to keep an eye on it because I think that could translate with the appropriate translations for a wider international model. And it also marks a point in the sand. You know, we can plant another flag in the ground where Genda starts moving outside of their comfort zone and starts moving into what I would call location-based entertainment Talking about moving out of your comfort zone. And we have another major development, or should I say the launch of a major move. Our friends at cc entertainment have decided that they're going to be getting into the active play business. So they already have their rethemed superhero play zones. Uh, they have now decided that they will be opening up in Texas a dedicated 12,000 square facility that will incorporate climbing. It will have a lot of active entertainment, ninja walls, all of that. I'm not sure how much digital entertainment interactive this will comprise. They've already got the branding rolling. They've already got the facility in the final stages. They're going to be throwing the doors open in a matter of weeks from when we're recording this and a lot of eyes will be looking at chucky cheese entering the location based entertainment market.
Speaker 2:Away from their pizza and redemption approach to entertainment, chuck E Cheese has really bounced back from its Chapter 11. So they've really gone and looked at their core model and rebranded their facilities, which has taken its time. They've added their active entertainment component to their rebranded facilities. They have now uh moved fully into their uh mall based uh arcade business, first through fun spot, now with the fully rebranded chuck's arcade, and this kind of is an obvious transition.
Speaker 2:Chuck's uh sorry, chuckie cheese adventure world I want to shoot their name, but anyway, the whatever it works with their brand and if they do what they've done with chuck's arcade with this, then it looks like it's going to be an interesting player. Now this goes right up against some of the other active entertainment brands that I've been talking about the Urban Airs, but also this goes kind of up against the SoCal operation that we have from our friends around one. So we are getting into an interesting convergence and again we've got some coverage in the coming Entertainment Social Arena that talks about how sportainment we had to get the tame it in there somewhat, but sportainment and active entertainment is playing a major part in the growth of our sector.
Speaker 1:This seems very much to me to be a market growth opportunity when they're feeling the saturation of their existing facilities in the, you know, at least in the US market. Obviously they've been doing some aggressive expansion internationally through the franchise model. But you know, in the US market, here corporate-owned, this is like, okay, hey, we need to still keep growing. We're not necessarily seeing same venue sales skyrocket year over year. So what can we continue to do to show that growth? Let's open up new types of facilities. This is interesting. I mean, this is a totally different insurance model, it's a totally different play model, it's a different marketing model as well. And I'm also again the adventure world, different marketing model as well. And I'm also again the adventure world, if it's not themed inside in some way then I really hate the name.
Speaker 2:Adventure world really makes it feel like, yeah, there better be an adventure inside there or else that branding is going to suck.
Speaker 1:Yes, it cannot just be what we call quote unquote adventure parks. Right, so it could be an adventure park, that's fine, but if you're going to add a world to it, then people, we've, we've, you know, names are important and we've begun to think that when you call something a world, it is going to be themed in some way yeah, it's it's going to.
Speaker 2:This is going to be very important for them. I would argue about the insurance. I think that they've been testing the waters with this approach for some time through their their active entertainment component, now rebranded superhero playgrounds. So they have a rough idea of the waivers that they're going to have to employ here. They've got a rough idea about how active and how many members of staff they're going to need and what works and what doesn't work. Works and what doesn't work. The issue is, do they have enough knowledge of what the themality is going to need to be to warrant repeat visitation and a strong brand ethic? And again, this goes back to what we've touched upon in other open the charts about what the guest is expecting from this, and the last thing you want is a wonka moment where people pile through the front door of a chucky cheese eventual facility and it just looks like a glorified superhero playground.
Speaker 2:Moving on, uh, and we've seen, uh, some ups and downs in the market. We're beginning to see sales of facilities and handing over the merging facilities. That M&A is moving to a much more brutal moment and we have a surprise sale going on Thunder Island Water Park in New York, a well-known destination to the locals, suddenly woke up to the news that the facility has been closed down. A lot of anger, a lot of people who have their, their passes. They're wondering if they're going to be able to use it. And then that news was followed by the announcement that the site is up for sale.
Speaker 2:So this isn't just a closure to redevelopment, but this is another sale, and this comes on the heels quite recently, only a matter of years ago, where the facility was up for sale again. So whoever's taken this on board has found it more difficult to continue. I think with all water parks across the whole of North America we're seeing hard realities of what it takes, especially if your facility is of a certain age, especially if you open up in the 70s or the 80s. Bringing these type of venues up where they can compete with the brand new water park and resorts that they're opening up is very difficult and it takes a different mindset. If you have $1.5 million burning a hole in your pocket, I would not recommend you to buy it. Personal opinion.
Speaker 1:Yeah well, I have nothing else to say. I completely agree with everything you said, so I'll just leave it at that. I mean water park anyway, I have no desire. There are other options. A water park, so?
Speaker 2:And there to go to a water park and there are other parks, water parks that have now gone through changes. We were talking recently in an open and shut about one particular water park that has bit the bullet, found the money that is needed to rebrand and redevelop, and that is what is going to happen with many of these sites going forward rebrand and redevelop. And that is what is going to happen with many of these sites going forward. An interesting one I'm just about to uh jump on the train and visit the opening of a brand new site, which is one of the benefits of being here in london.
Speaker 2:Uh, during this duration in, our friends at f1 arcade have done something that we were all alluding to when we saw F1 Arcade open and expand its operation whether they would actually bite the bullet and be more about the simulators and the entertainment rather than the food and the beverage. And so we have the first in the Westfield Shopping Mall in Stratford. This is going to be a retail unit fit in rather than a dedicated space, and they have created F1 Box. Are all of these marketeers getting together? Anyway, f1 Box feel the thrill is 12 simulators, so they've taken, rather than the F1 arcades that we have at the moment, where they have between 50 and 60 simulators.
Speaker 2:They've taken 12 simulators. They've put them in a much smaller component. They've themed it with the similar themality that we've seen with F1 arcade, except, for the moment, no booze, no food. This is a race sim lounge really, and this is a pivot for F1 Arcade because when we were dealing with the team originally, they were adamant that they were focused away from the simulator esports side of the entertainment and that they were offering a unique play experience with a social component. From the look of F1 Arcade, f1 Box so far, without actually touching the facility, it looks like that they have seriously pivoted and come up with a sports racing lounge component, minus the booze and the food, that can be rolled out into much smaller localities where an F1 arcade would be too big and too expensive. If this is the beginning of a rollout of different flavors of the F1 arcade experience, maybe with more F&B, more simulators or even with amusement, we don't know yet.
Speaker 1:Yeah, now, I would have assumed that this F1 box was just a smaller, scaled down version of their F1 arcade, maybe a smaller scale F&B, but still F&B, still very focused on competitive socializing, but again, just maybe 12 Sims or even 20 Sims, some smaller number, because I felt like some of those F1 arcades were overbuilt and for for a much larger crowd. So like, okay, maybe they're just adjusting based on crowds, where this really feels like a total fundamental model shift and what they're trying to do. And even from a pricing, it's 17 pounds for a 20 minute experience which includes basically two five minute races. So I'm there for 20 minutes, you know, maybe 30 minutes from time to, from beginning to end. I spent $17 and that's all you're going to get from me.
Speaker 1:You know, maybe I'll, maybe I'll play again and play again. So maybe I'll play for an hour or two hours, depending on how many people I'm with, but most likely I'm not going to probably go more than twice. So I'm going to play two five-minute rounds and another two five-minute rounds. So 20 minutes of total race time and again, you're not going to get anything else from me because you have nothing else to upsell me. This feels very much like a barcade model without the bar component, the retro arcade model. That is like come in, you have one hour, you pay your $10, and then that's it, and there's no other way to extract more per cap from me, more revenue from me, even if I wanted to give it to you, and I think that's a mistake for these guys.
Speaker 2:I'm in the entertainment business and I'm here not to come up with reasons why people can't spend. I'm here to give them reasons where they can spend and, sadly, I get the feeling that the team may not be as familiar to the entertainment model as they are to the F&B model. That said, let's not put the cart before the horse. You know, I need to go to this facility, I need to touch it and I need to come away. But we can throw some questions out that I can ask future. Kevin, if you could answer these questions for us.
Speaker 2:Number one is there any merchandising? Number two is there any league, team, arena, tournament, repeat promotion? Even our friends at Electric Shuffle have a facility tournament capability where you can see the scoring of what each site is doing. So will there be a means for me to see how the top racer on this particular circuit is doing at one of the various venues? Will there be F&B in the model? And the final question is this a serious concept or is this fulfilling an opportunity that popped up and for some reason they couldn't drop in an F1 arcade, so they dropped in a Succaton C to test the water? Is this a unique exemplar rather than a serious direction pivot, direction, pivot. And if this is a serious direction, pivot future. Kevin, please grab whoever's responsible for it and get their background of where they come from from the market so we can understand their thinking behind this. Oh and, by the way, future Kevin, mine's gin and tonic.
Speaker 2:Of course Of course.
Speaker 2:And future. Kevin will be very angry. I even suggested that he didn't know that, but these are the questions that need to be dropped into as many venues far easier than dropping in a full service bar and food operation with racing simulators. If you've gone through the expense of creating these race simulators in this race experience, you want to use it as much as possible. But these are the observations from our lofty position. We need granularity to find out if they are thinking along these lines or if this is a pivot for necessity.
Speaker 2:Looking at the AI trends and Chuck E Cheese again, our friends at Chuck E Cheese made the announcement that they've now employed AI in all of their guest-facing attributes. They call it the Chuck bot. Made me sick, anyway. The Chuck bot is an AI tool that helps on three levels. It helps with the translation of the site, it helps with the guest selection and question answering, and it also helps with the birthday planning and the final booking process.
Speaker 2:I haven't had a chance to use Chuckbot yet. I will get around to doing that soon but it is a tool that all venues will be incorporating at some point in the future, which is where you have a search bar or you have a machine data collection of someone. Going through the process, you have the ClippyArt popping up and saying we see that you're arranging a birthday party for 13 Spanish speakers at our facility. Here is all of our information in Spanish and here are the deals that are available. So these are the type of things that language engines can do very easily if themed and operated correctly, and we look forward to seeing how well it is integrated into the online capability and it is inevitable that this will be incorporated into a touchscreen capability of facilities. And if you're in the party hiring business in the FEC market, you'd better start improving your act.
Speaker 1:Yeah, chatbots have been around for a while, but having chatbots powered by LLMs so large language model AI, large language models from some of the core AI companies is obviously a new thing. They are probably on the front edge here, but this is an important topic for all venues and if you're not considering putting some form of chatbot on your site to offer support, then you are going to let down your potential guests as far as their experience and their guest's customer service is concerned. You really need to be thinking about adding this on. Do you need to go and have a custom chatbot developed and created for you? No, not necessarily, but you could go and work with companies like Satisfy Labs, for example.
Speaker 2:You can work with companies, you don't go away, and I would expect that CEC has gone away and burnt quite a bundle to create their own one. But we are not CEC, we don't need to go through that process and it should be in your thinking already this isn't brand new suddenly appeared on the horizon this has been bubbling for over two years that we would have to have some kind of large language machine learning, smart machine learning device utilized in our web presence and possibly our touchscreen presence. Going forward, when is Dave and Buster's going to apply this kind of technology to their touchscreen heavy front of house component and I look forward at the AI session at IALPA coming up see how much that session will talk about how this kind of plays into our future.
Speaker 1:Yeah yeah, it is a ticketed FEC lunch. At least the AHAI conversation focused on FECs and location-based entertainment. I'm optimistic, cautiously optimistic, for the value of that particular session.
Speaker 2:If these type of things aren't being talked about, why are we holding it?
Speaker 1:I would totally agree with you. I'm a little bit skeptical of the main moderator and his knowledge of the space.
Speaker 2:Look forward to it. I'm also yeah.
Speaker 2:It is important. We can't hide from this. This isn't a job for the boys. This is serious stuff that people are looking at now. We're an industry, not a retirement home Moving on, and one of the things that we're going to be touching upon now is now that the Stinger Report and the entertainment social arena are getting back up to steam and a bit more regular and Kevin is pulling his finger out more often then we need to touch upon some of the subjects that are being brought up, the topics that are being risen from the research and the information that we're compiling, and one of those the latest issue of the Stinger report will be coming out is touching on how things have changed quite drastically in the XR consumer arena.
Speaker 2:We're at a stage now where the VR headset is being superseded by the mixed reality headset or even totally being abandoned, and people are now focusing more on AR smart glasses. So again, the statement that our friends at Meta made. They drew a line in the sand last year saying that this year 2025, was the make or break year for their investment into VR. They expected that things would be sorted out. Their new hardware release would sell well, but the audience that they were targeting a much younger audience would be captivated and their attention would go through the roof. And it is clear that that's not happening. So the talk about the replacement to the MetaQuest 3, the MetaQuest 4, obviously has now been pushed into the long grass. It won't be coming out next year. There's going to be a period of reflection. They've been demonstrating technology advances, but they haven't really been demonstrating new product release, and we've now seen that the company is doubling down more on their AR smart glasses and their AI-equipped smart glasses.
Speaker 2:Now I have a problem here. When someone says augmented reality, I think of the technology that prints up information into your eye that tells you the name of the person you're talking to or the direction you should be walking A heads-up display where really a lot of these companies that are now launching AR smart glasses are using them as smart assistants. You can take photos and video from them by the swipe, you can ask them questions and an AI assistant will hopefully answer those questions for you. So these are really what I like to call AR light smart glasses, if they are more an appendage to your mobile phone than a dedicated application. That said, our friends at meta will be launching the next generation of ar and mixed reality glass systems at their coming event in a couple of weeks time, and I think we'll kind of see a repositioning of the landscape.
Speaker 2:We will see Apple having to really position where their system sits, as a mixed reality system rather than an augmented reality system, where meta sees its future with its headsets and its smart glasses. We're at a transition point and that all has a knock on for us, because we in the location-based entertainment are using smart glass technology, though much at a higher level with some of the augmented reality experiences out there, and we are also still seeing high profits from our virtual reality systems. So if the consumer VR market may be taking a bit of a tumble, that's more brain to our mill, to be honest. We can then pick up the audiences that like VR and want to be immersed through headset systems, and hopefully we will learn how to promote our technology separate to what is available in consumer.
Speaker 2:I think if I were Meta I would maybe If you were Meta, you wouldn't be sitting in a hotel now, you'd be laying on a beach.
Speaker 1:Well, okay, that's fair. I guess what I was trying to reframe here was the fact that I actually don't think that they need to do a pivot away from the metaverse. I think they need to redefine internally what they consider the metaverse to be, and I always struggle with this. Yeah, but like not just rebrand but like redefine. I don't. I never had a problem with the word metaverse, but how it was defined, I think was it was the issue. This was not going to be. We were never going to live in a world I truly didn't believe a world like ready player one where we're all living in headsets and everything we're doing is online and in this immersive environment. It's just not how we're wired as human beings and it was never going to happen.
Speaker 1:My view of the metaverse was a world in which we were always ubiquitous, we were connected and we had this ubiquity, this internet layer that existed and was ubiquitous across our entire human experience, and that is where AR and AI come into play and other tactical ways of manipulating that information, tactile ways of manipulating information that I think we haven't even yet seen today. Right, but this is, you know, we have. You could say well, we always have the internet with us all the time because we have our phones. Well, yeah, but I still have to like go to the device access, like go somewhere to access that information, versus it just always being there and around and available to me on a whim right. This is where Neuralink and other things, where we'll be able to have constant connectivity to the broader metaverse or the meta world, and I think that is where they and it sounds like that's where they're going, but that is always the future for me, for metaverse, and that's the definition.
Speaker 2:It was never this virtual world that they wanted to try to build, so you know, I'm an old enough puppy to remember the first time that AR tried to establish itself and the first time that virtual reality tried to establish itself, and it was clear then, using the clunky technology of the 90s, that this was going to be a constant world in which you lived. But it was of living in a world where you had no mates and you constantly had a helmet on and you constantly played retro recreations of popular video games from the 80s. And those hype meisters managed to get a whole load of investors to believe a whole load of hokum. It's a personal opinion, but I feel that some of those individuals that sold a utopia for the metaverse concept were pivoting hard after reading a couple of dystopian sci-fi books and because they had bad social skills, they felt that everybody else was prepared to live in that environment. Personal take I am very controversial about my perceptions of how we got to the current XR scenario and how we are now having to dust ourselves off, admit that the hype was too much hype and it is difficult for some corporations to admit that they may have been badly advised in the path that they have taken.
Speaker 2:I agree with you that all it takes is a little bit of rebranding and reinterpretation of the metaverse and it can be added to the world in which we all live in, which has technology on demand, but not constant, not constant. Now, how you're going to pivot an operation that's blown nearly $80 billion on an entrance into a market that may not actually exist is going to be interesting, and we will need to see how that happens coming at Connect event. But again, the pivot's on the way. But again the pivot's on the way, pause.
Speaker 1:You need to take that. All right. We're back now that the housekeeping at the hotel has been taken care of.
Speaker 2:So, anyway, as we were talking about Just to show other companies now that have pivoted into um, really moving away from their virtual reality investments and now for a mixed reality or an ar reality, or they cover everything with a, an xr veneer. We have our friends at htc. We all have been using the HTC Vive in the VR sector, in the location-based entertainment. Obviously, htc has had a very lucrative deal with our friends at Google, where they've sold off patents and R&D and they have now decided that they want to get their time in the sun. They want to create their Ray-Ban moment for their smart glasses. They've released their HTC Vive Eagle systems only in Taiwan at the moment, but it's kind of an indication of where this market's going for consumer and again, we need to be mindful that, while the consumer electronics sector pivots heavily into AR lights, we in the location-based entertainment need to make sure that our technology advancements are much higher than that. But anyway, that kind of touches upon that. Is there anything you wanted to add to that?
Speaker 1:Yeah, I mean I think, just two things. I want to call out One just from a style standpoint. Obviously you have to have the electronics and components and battery everything else along the sides. It's come a long way since Google Glass. We talk about AR glasses, obviously, but not that much.
Speaker 2:I would argue that the Google Glass may have had a lot more components or capabilities than some of these AR light glasses.
Speaker 1:Oh, certainly, certainly I wouldn't disagree with you there. But what I'm seeing is it would be interesting to see how these types of glasses and as people desire to have this capability on their face, how it will actually impact styles, so actual clothing styles, other styles as more wearables continue to evolve, how it will actually be. You wouldn't normally wear glasses of this style, with the big size there, except for the fact that you want to have AI glasses and AR glasses, and if more people have them, then it will definitely have an impact in the style. Secondly, I just say that it really it's one thing to have the glasses, it's another thing to have the user experience and the UI and UI and the IO right. So the interface is the. It will be the killer app for these things, and so that will. Whoever wins the UX and UI experience will ultimately win the hardware experience to some extent.
Speaker 2:I think it's the GUI, the graphic user interface, that is the key thing here, and if you don't have any graphics, if it's just a tactile smart assistant, then it's going to have to do a hell of a lot for a $400, even a 900 price point, I you know our friends at meta stated that they had seen a decrease in their sales in their vr headsets over the quarter, but they had seen an increase, three percent increase, on the sales of their AR glasses. I'm screaming and shouting during the investor's call that these are not AR glasses. These are, at the moment, ar-like glasses, what they will be launching next, which has visuals into the field of view of the user, which has graphical interfaces that chart your hand movement and can interact with these items. These will be the next generation, but these won't be cheap either. And so we're at this very important moment now, as it said right at the beginning, this is the make or break moment for Meta. This is a make or break moment for the whole dream of the next coming of AR glasses. If this fails, if this only sells a few million and you know, in the electronics business a few million is death sentence you know, our friends at apple have not even sold a few million of their uh apple vision pro, and they're already rethinking drastically their involvement in continuing down this path. If these units are a fashion or a fad that go the same way as Google Glass, then there's a lot of egg on a lot of faces and a lot of electronic companies will be seeing their C-suites decimated as they look towards what really is sellable as a customer interface for the next generation of interactivity.
Speaker 2:Anyway, we've taken enough of your time and Brandon needs to have his beds turned down. Please make sure you're receiving the newsletters through your system. Make sure they're not going to spam. Please also remember you can listen to them as audio files and watch us as social media. I'm not sure if you're watching this via our YouTube or via our links on social media, and anyway, please constantly send us emails and advice and direction. It's valued. I wouldn't be going to some of the events as I'm going to if it wasn't for the feedback from our watchers. So thank you for that.
Speaker 1:All right, perfect. All right, kevin. Another great sound off and we'll see you on the next one. Bye.
