Can Two Big Releases Lift the $58 Billion Videogame Industry?
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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 bargain. But is it 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 the industry.

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. 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 iPhone 16 lineup goes all the way to $1,000, starts at $800. If you think that's too much, then this $599 phone gets you a lot. Okay.

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. That seems useful. 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 performance.

The orientation of the phone innards, they could squeeze a bigger battery in there. What did you like less? You write cue the mournful violin in your review. 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. So sum it up for us.

Who is this phone for? 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 more

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. 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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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 Heard on the Street columnist, Dan Gallagher.

Dan, give me a sense of the anticipation here. How excited are people about these two releases? 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, a 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 live 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 in Cloudy and the previous sequels. Third top selling game of all time. So these are big releases. That's serious. You've written that Surefire hits are a rarity in this business. Why is that? Well,

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 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? The stocks are already seeing gains. The companies themselves have been very careful about not setting...

too high and not putting out ridiculous numbers that they might not meet. But I'd say they've been pretty conservative. Just in 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 because of this one game because they have other games that are doing well and they bought Zynga so they're a bigger company. But they've been

But they should be, in the next year, become the biggest standalone video game publishers 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. But Nintendo's stock has already jumped roughly 34% over the past three months, which is outperforming all but two S&P 500 stocks in that same time.

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 one-eighth 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. So what's at stake for those companies if the Switch and Grand Theft Auto don't perform as well as hoped? Investors would be disappointed, for sure. For Nintendo, the reason that 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. Are there any possible headwinds on the 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.

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 Catherine Millsap. I'm Charlotte Gartenberg for The Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.