Last year was effing awful, but Nintendo did great. At this time last year, Kotaku reported that Nintendo’s profits between April and June 2020 increased by over 400 per cent — a number that even a year later is hard to comprehend. Understandably, during that same period this year, the feat was hard to repeat.
Nintendo’s latest financial statement is not bad. Nintendo isn’t doing terribly. The Kyoto based game maker is doing just fine. The Nintendo Switch, for example, has now sold 89.04 million hardware units and 632.40 million software units, as of June 30. Now, it’s now a 400 per cent increase in profits, but hey, it’s a-ok. However, surpassing or even getting near New Horizon’s success during the early part of the pandemic is hard.
Compared to the first quarter last year, net sales are down nearly 10 per cent, while operating profit decreased by over 17 per cent and net profit dropped by almost 13 per cent. Digging in the numbers further, Nintendo sold 50.43 million software units worldwide during the first quarter last year compared to 45.59 million. That’s a 10.2 per cent drop! During that same period, hardware sales declined by 21.7 per cent but those numbers could be slightly misleading. Sales of the Switch Lite went from 2.62 million to 1.14 million, decreasing by 56.7 per cent — which is, yes, quite a drop. However, regular Switch sales increased 8.3 per cent from 3.05 million units to 3.31 million units.
Note all the numbers mentioned above are sell-in, meaning that they were purchased by Nintendo’s sales partners. Nintendo is bullish about the sell-through numbers — the figures that show hardware and software that was ultimately purchased by consumers. “Sell-through otherwise grew, with a good balance of new and previously released titles,” Nintendo added. However, the specter of New Horizon looms all over this financial statement.
“Nintendo Switch hardware and software sales both remain steady, but overall sales declined compared to the same period of the previous fiscal year, when Animal Crossing: New Horizons was a major driver of the Nintendo Switch platform business,” the company wrote in its most recent financial statement.
“Overall sell-through of first-party software in the first quarter did not keep pace with last year’s very high performance, when Animal Crossing: New Horizons accounted for 40 per cent of the total. But if we exclude the impact of Animal Crossing: New Horizons, we can see that Q1 sales exceeded those of the same quarter last year.” (“Q1” refers to the first quarter, which, in Japan, starts in April.)
Nintendo might want to exclude the impact of New Horizons on this financial statement, but certainly won’t be returning its profits anytime soon.
Animal Crossing: New Horizons was the perfect game for a terrible time, transporting people to a safer, more peaceful world. The game sold gangbusters. It’s also telling that Nintendo’s digital sales for this quarter declined almost 25 per cent this quarter year on year, because last spring, more countries were in lockdown. Many people were stuck at home, and New Horizons benefited. This is something Nintendo points out, writing that “the proportion of digital sales to total sales grew substantially, both because the ratio of the downloadable version was high for Animal Crossing: New Horizons, which sold more than 10 million units, and due mainly to the effect of stay-at-home measures introduced to prevent the spread of Covid-19.”
As of June 30 this year, Nintendo has sold 33.89 million copies of Animal Crossing: New Horizons. Keep in mind that the company sold a staggering 22 million copies of Animal Crossing: New Horizons by June 2020, underscoring just how popular the game was in the months following its March launch. As successful as New Horizons has been, this isn’t Nintendo’s biggest selling Switch game as that honour goes to Mario Kart 8 Deluxe, which comes in at 37.08 million. Note that these worldwide numbers include retail and detail copies as well as bundled software units.
Even with New Pokémon Snap and The Legend of Zelda: Skyward Sword HD out and WarioWare: Get It Together! slated for September, Nintendo is still forecasting lower profits than last year. 2020 was not a normal year. It was awful, but New Horizons made it a little better.
In case you missed it, read Kotaku’s Animal Crossing: New Horizons review right here.