‘Animal Crossing’ Boosts Nintendo’s Profits as Videogame Demand Soars

The success of the Nintendo Switch during the worldwide pandemic has propelled Japanese entertainment company to a stand-out year.

Nintendo says that it had made 352-billion yen ($3.3-billion) in operating profit for the fiscal year ending in March – a 41% surge from a year ago. Profit in the three months leading to March more than tripled compared with the previous quarter.

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Sales were driven in a large part to the massive success of the Nintendo’s Animal Crossing: New Horizons – a game set on an island utopia where players can interact online and visit each other’s island. During the first six weeks of the game’s release, the company sold more than 12-million units of the game.

Animal Crossing and the hardware it runs on, the Nintendo Switch game console, have been in high demand as people worldwide remain stuck indoors because of efforts to contain the spread of the coronavirus. The Switch, which was first released in 2017, has sold out on several websites.

CNN writes that the Kyoto-based company also ran into supply issues with the Switch this autumn because of factory shutdowns in China. Those closures triggered component shortages and slowed output at factories in Vietnam, where Nintendo manufacturers the console. Because of this, the company has to briefly suspend Switch shipments to Japan in April.

In terms of hardware sales, Nintendo says sales of the Switch, and its completely-portable version the Switch Lite surpassed 21-million units during the last fiscal year. This marked a 24% increase year-on-year and was well above forecasts. The games Pokémon Sword and Pokémon Shield, which released late last year, were also bright spots, selling more than 17-million units combined.

“It is incredible for hardware going into its fourth year to sell so well,” says Hideki Yasuda, an analyst at Ace Research Institute. “It’s an uncertain world already, and no one wants war and horror games in their living room. Animal Crossing keeps the parents happy too.”

The company — well known for its conservative forecasts — says it still expecting operating profit to decline to 300 billion yen ($2.8-billion) this fiscal year.