Recent progress in real-time simulations has led to a higher demand for believability from virtual characters. Background characters are becoming a more integral part of games, with emphasis being placed in particular on interactions between them. Conversing groups can play a significant role in adding plausibility, or a sense of presence, to a real-time simulation. However, it is not obvious how best to generate and vary these kinds of groups. In this paper, using anthropological standards for interacting distances and formations, we conduct a series of experiments to examine how these parameters inherent in human conversation are perceived for virtual characters. Our results show that, although participants were sensitive to both distance and orientation changes between talkers and listeners in a virtual conversation, they were not as sensitive to anomalous gesturing behaviours across different distances. Copyright © 2012 John Wiley & Sons, Ltd.