Can Two Big Releases Lift the $58 Billion Videogame Industry?

Summary

WSJ Tech News Briefing: Can Two Big Releases Lift the $58 Billion Videogame Industry?

Release Date: March 3, 2025

The latest episode of WSJ Tech News Briefing, hosted by Charlotte Gartenberg, delves into two pivotal topics shaping the tech landscape in early 2025: Apple's introduction of the new iPhone 16e and the burgeoning anticipation surrounding two monumental releases in the video game industry—the next-generation Nintendo Switch and the long-awaited sequel to Grand Theft Auto. This comprehensive summary captures the key discussions, insights, and expert analyses presented in the episode.

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1. Apple’s New iPhone 16e: A Balanced Approach to Affordability and Features

Introduction to the iPhone 16e

The episode opens with Charlotte Gartenberg introducing the newly unveiled iPhone 16e, priced at $599. While not the most affordable option in the market, the device positions itself as a more accessible alternative within Apple's lineup. Personal tech columnist Nicole Nguyen provides an in-depth review based on a week-long hands-on experience.

Key Features and Advantages

Nicole Nguyen highlights several notable features of the iPhone 16e:

• Price Point: At $599, the iPhone 16e offers a significant discount compared to the standard i16 models, which range from $800 to $1,000. Nguyen remarks, “[01:24] Nicole Nguyen: Well, this iPhone is Apple's cheap phone, but $599 isn't super cheap. But I do like that the price is not a gazillion dollars.”

• Safety Features: The device includes innovative safety mechanisms such as location and texting via satellite and a crash detection system. These features have proven invaluable during emergencies, such as California’s wildfire season. Nguyen emphasizes, “[01:24] Nicole Nguyen: This can definitely save lives.”

• Battery Life: One standout aspect is the impressive battery performance, boasting 26 hours of video playback—longer than the more expensive iPhone 16 models. This is attributed to Apple’s first in-house designed cellular chip, which enhances power efficiency. Nguyen explains, “[02:14] Nicole Nguyen: This has the biggest battery that you can get of a phone this size in the iPhone 16 lineup.”

Drawbacks and Considerations

Despite its advantages, the iPhone 16e has some limitations:

• Design Changes: The removal of the classic home button and Touch ID in favor of Face ID has been a point of contention. Nguyen lamented, “[03:01] Nicole Nguyen: The classic iPhone design with the home button is no more... Sorry to those folks with small hands.”

• Screen Size: At 6.1 inches, the device may not appeal to users who prefer smaller phones, potentially alienating a segment of Apple's customer base.

• Feature Trade-offs: For those seeking more value, refurbished models of the iPhone 15 might offer better features at a similar price point. Nguyen advises, “[03:43] Nicole Nguyen: If you want more value, you should take a look at what your carrier offers in terms of refurbished devices.”

Target Audience

According to Nguyen, the iPhone 16e is ideal for consumers who prioritize affordability without foregoing essential features. However, those seeking additional functionalities like MagSafe or an ultra-wide camera might find better value in alternative options.

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2. The $58 Billion Videogame Industry: Anticipation and Uncertainty Surrounding Two Major Releases

Overview of the Industry’s Current Climate

Following the iPhone segment, the podcast transitions to an analysis of the video game industry's prospects in 2025. Despite a challenging year in 2024, the sector may experience a resurgence driven by two highly anticipated releases: the new Nintendo Switch console and a sequel to the Grand Theft Auto (GTA) franchise.

Anticipation for the New Nintendo Switch and GTA Sequel

Dan Gallagher, the “Heard on the Street” columnist, provides insights into the excitement enveloping these releases:

• Nintendo Switch 2: Building on the original Switch’s success, which has sold over 150 million units, the new console is poised to set records. Gallagher notes, “[05:58] Dan Gallagher: These are follow ups to two very massively successful releases... Nintendo's biggest selling console ever.”

• Grand Theft Auto Sequel: After a 12-year hiatus, the next GTA installment is expected to rival its predecessors in popularity and sales. The last entry, GTA 5, remains one of the top-selling games globally. Gallagher states, “[05:58] Dan Gallagher: Grand Theft Auto is one of the most popular game franchises of all time.”

Investment Implications and Market Reactions

Investors are responding positively, with stocks for both Nintendo and Take-Two Interactive (the parent company of GTA) already experiencing gains. Charlotte Gartenberg points out, “[07:59] Charlotte Gartenberg: Nintendo's stock has already jumped roughly 34% over the past three months...”

Potential Risks and Historical Context

However, Gallagher cautions against assuming guaranteed success:

• Historical Precedents: Nintendo's previous console, the Wii U, was a significant disappointment compared to the Wii, selling only about one-eighth of the units. Gallagher remarks, “[08:51] Dan Gallagher: There’s no guarantee at all that the Switch 2 is going to be the same kind of hit.”

• Quality Over Hype: The video game market is notoriously unpredictable. Even highly anticipated releases can falter if they fail to meet quality expectations. As Gallagher explains, “[06:37] Dan Gallagher: The quality of the actual item ends up mattering the most. Gamers are really particular.”

Impact on the Broader Video Game Industry

The success of these two releases is critical for the industry’s projected growth in 2025. Failure to meet expectations could result in continued struggles, considering the previous year's challenges. Gallagher highlights, “[09:27] Charlotte Gartenberg: Are there any possible headwinds on the...”

Market Dynamics and Competitive Landscape

The timing of these releases may also affect the industry's landscape. Competing game publishers might adjust their release schedules to avoid direct competition with these titans, potentially leading to a quieter release cycle. Gallagher notes, “[09:29] Dan Gallagher: ...you might see more quiet release cycle overall in the fall.”

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Conclusion: A Pivotal Year for Tech and Gaming Industries

The episode encapsulates a period of potential transformation for both the smartphone and video game industries. Apple's iPhone 16e offers a more affordable entry point into their ecosystem, balancing essential features with cost considerations. Meanwhile, the video game industry stands at a crossroads, hinging on the success of two marquee releases that could either buoy the sector back to robust growth or underscore its vulnerabilities.

As Tech News Briefing continues to monitor these developments, stakeholders—from consumers to investors—remain keenly attentive to the unfolding narratives within these dynamic industries.

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Notable Quotes:

• “[01:24] Nicole Nguyen: Well, this iPhone is Apple's cheap phone, but $599 isn't super cheap. But I do like that the price is not a gazillion dollars.”

• “[02:14] Nicole Nguyen: This has the biggest battery that you can get of a phone this size in the iPhone 16 lineup.”

• “[03:01] Nicole Nguyen: The classic iPhone design with the home button is no more... Sorry to those folks with small hands.”

• “[05:58] Dan Gallagher: These are follow ups to two very massively successful releases... Nintendo's biggest selling console ever.”

• “[08:08] Dan Gallagher: And that's anticipation for what's supposed to be a big console.”

• “[09:29] Dan Gallagher: ...you might see more quiet release cycle overall in the fall.”

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Produced by Jess Jupiter with Supervising Producer Kathryn Millsop.

Transcript

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[Charlotte Gartenberg]

Welcome to Tech News Briefing. It's Monday, March 3rd. I'm Charlotte Gartenberg for the Wall Street Journal. At $599, Apple's new iPhone 16e isn't what you'd call a bar still a good deal. Our personal tech columnist Nicole Nguyen tried it out and she says there are some things to recommend. The new phone, which features Apple's first ever in house chip. Then the $58 billion video game industry could be in for an exciting 2025 with two highly anticipated releases expected this year. Heard on the street columnist Dan Gallagher tells us what investors might expect from the new Nintendo Switch, plus the first new Grand Theft Auto sequel in 12 years and how those releases could shake up. But first, Apple recently unveiled its iPhone 16e, a cheaper iPhone that retails for $599. Our personal tech columnist Nicole Nguyen just spent a week with the device and she joins us with a review. All right, Nicole, let's start with what you like about this phone.

[Nicole Nguyen]

Well, this iPhone is Apple's cheap phone, but $599 isn't super cheap. But I do like that the price is not a gazillion dollars. The current i16 lineup goes all the way to 1000, starts at 800. If you think that's too much, then this $599 phone gets you a lot. Okay, so let's go through the features. It comes with location and texting via satellite. If you ever find yourself on top of a mountain or in a situation where cellular networks are down, people have used this during wildfire season in California. This can definitely save lives. There's also a crash detection mechanism that can detect if you get into a car accident and then blast out the information to your loved ones and to emergency services.

[Charlotte Gartenberg]

That seems useful.

[Nicole Nguyen]

Very useful. It has a lot of battery life. So 26 hours of video playback, which I recommend to no one, don't watch video for that long. It's even longer than the more expensive iPhone 16. The $200 upgrade has 22 hours of video playback. So this has the biggest battery that you can get of a phone this size in the iPhone 16 lineup. And that's due in part to this very geeky modem that Apple designed. It's the first time Apple has designed a cellular chip and they were able to get power efficiency out of the design of that chip, plus the orientation of the phone innards. They could squeeze a bigger battery in there.

[Charlotte Gartenberg]

What did you like last you write? Cue the mournful violin in your review.

[Nicole Nguyen]

Yes, the classic iPhone design with the home button is no more. There are a lot of people who love the home button and I get it because it was like a one press escape hatch for folks who are like, my phone's freaking out. I don't know what to do. You press the home button. Boom. You're back to the home screen. That's no more. No more touch id. It's face id. And you have more screen real estate because it doesn't have that button and the bar at the bottom. So sorry to those folks. Also sorry to folks with small hands and those in general who like small phones because this phone is 6.1 inches, which is the same size as like the main iPhone.

[Charlotte Gartenberg]

So sum it up for us. Who is this phone for?

[Nicole Nguyen]

It's for people who prioritize price over features. Although I will say if you want more value, you should take a look at what your carrier offers in terms of refurbished devices because you can pay just as much for an iPhone 15, which has more features like MagSafe, an additional ultra wide camera, and this iPhone 16e does not have it. So you could pay the same amount for a used or refurbished iPhone 15 through your carrier, and I wouldn't go much older than that because it cuts into Apple's support lifetime. But if that's available to you, then that could be a better value.

[Charlotte Gartenberg]

That was WSJ personal tech columnist Nicole Nguyen. Coming up, 2025 could be a big year for the multi billion dollar video game industry. But there might be only a few winners. We'll talk about two highly anticipated releases after the break.

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[Charlotte Gartenberg]

The stakes are high for the $58 billion video game industry after a rough 2024, but two massive hits are expected to launch this year. The New Nintendo Switch console and a sequel to the blockbuster Grand Theft Auto franchise. What are investors expecting with these two releases? And could a rising tide raise other game making boats? Here to fill us in is our Herd on the street columnist Dan Gallagher. Dan, give me a sense of the anticipation here. How excited are people about these two releases?

[Dan Gallagher]

I would say very excited for a couple reasons. Both of these are really big selling properties now. In one case we're talking about a piece of hardware console. In another case in Grand Theft Auto, it's a game. But these are follow ups to two very massively successful releases. The first Switch has been Nintendo's biggest selling console ever. More than 150 million units life to date. And Grand Theft Auto is one of the most popular game franchises of all time. Just the last sequel, Grand Theft Auto 5 is ranked as like the top third selling game just on its own. And that's not including the pre sequels third top selling game of all time. So these are big releases.

[Charlotte Gartenberg]

That's serious. You've written that surefire hits are a rarity in this business. Why is that?

[Dan Gallagher]

Well, because you never really know any type of media business. We see that with music and movies and other sorts of things. You can have things that you think are like relatively safe bets, you know, from a popular franchise or something. But at the end of the day, the quality of the actual item ends up mattering the most. And gamers are really particular. So we've seen lots of instances in video game history where something that really should have been a big hit wasn't because it didn't quite get the game right, the mechanics right. Something else then.

[Charlotte Gartenberg]

How big a success are Take two, the company that makes Grand Theft Auto and Nintendo expecting here? Their stocks are already seeing gains, right?

[Dan Gallagher]

The stocks are already seeing gains. The companies themselves have been very careful about not setting hopes too high and not putting out ridiculous numbers that they might not meet. I'd say they've been pretty conservative just to take two and kind of like some comments they've made over the last couple years about where they expect their business to be at. And they don't really say it's what, because of this one game? Because they have other games that are doing well and they bought Zyngus. They're a bigger company, but they should be in the next year become the biggest standalone video game publisher, surpassing Electronic Arts in terms of annual revenue. And that's of course if Grand Theft Auto comes out when people think it will and does as well as people think it will.

[Charlotte Gartenberg]

But Nintendo's stock has already jumped roughly 34% over the past three months, which is outperforming all but 2s and P500 stocks in that same time.

[Dan Gallagher]

And that's anticipation for what's supposed to be a big console. And this is actually, if you want to talk about risks against being a sure thing. Nintendo's own history has shown that they've had really big selling consoles, and then sometimes they followed up with something that didn't do well. The two most recent consoles before the Switch were a great example. Their first Wii console was huge, sold a little over 100 million units. The follow up to that, called the Wii U, was a complete flop and it sold like about 1/8 that number. It was a huge disappointment. So there's no guarantee at all that the Switch 2 is going to be the same kind of hit. Judging the switch 2 by this first switch might be a tough compare, Even if the Switch 2 does really well on its own.

[Charlotte Gartenberg]

So what's at stake for those companies if the Switch and Grand Theft Auto don't perform as well as hoped?

[Dan Gallagher]

Investors would be disappointed for sure. For Nintendo, the reason the consoles are really important is because Nintendo is kind of an integrated video game maker. They make games and they make game consoles. Their game consoles are primarily used to play their games, games like Super Mario, Zelda, these super popular franchises that sell really well. So if you have a console that disappoints customers, gamers, that could lead to less business for the actual games. Nintendo needs essentially the entire flywheel to work.

[Charlotte Gartenberg]

Are there any possible headwinds on the.

[Dan Gallagher]

Horizon for this, for the switch 2 and then for the Grand Theft Auto games? They have a pretty clear shot. The bigger question for the game industry, especially in the release of Grand Theft Auto, since we don't know exactly when that's going to hit, there's a lot of other game publishers that are holding back their own release plans. It's like releasing a little movie against the latest Marvel extravaganza or something like nobody wants to go directly against this game. And so you might see more quiet release cycle overall in the fall. And that's kind of a risk for the industry because right now the industry had a rough year last year. Analysts expect the growth to return this year. But that growth hope is really pinned on these two things. And if they disappoint or come out later, then the industry could be in for another rough year.

[Charlotte Gartenberg]

That was heard on the street columnist Dan Gallagher. And that's it for tech news briefing. Today's show was produced by Jess Jupiter with supervising Producer Kathryn Millsop. I'm Charlotte Gartenberg for the Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.

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