Millions of people throughout the world have found in video games a refuge to cope with lockdowns and the uncertainty caused by COVID-19. The title that has caught the attention of 11 million users in 1Q20 is Animal Crossing, a game released in March by Nintendo Switch.
In 1Q20, Nintendo reported a 41 percent increase in profits to ¥352.37 billion (US$3.28 billion) compared to the same period in 2019, driven by increased demand for its Switch console and the game Animal Crossing: New Horizons. Animal Crossing sold 11.77 million units and established itself as the best-booting game since the Nintendo Switch was released in 2017. In 2018, the sale of the Nintendo Switch console represented more than MX$23 billion for the company in Mexico (US$970 million).
This success took the company by surprise, President Shuntaro Furukawa said in a call with investors. The game first became popular with young women who were already fans of the movie released in 2006 before it was extended to a much more diversified audience.
“Animal Crossing is a communication game. I hope that through their life in the game world, people enjoy communicating with each other, whether it is through playing with other people or talking enthusiastically about the game. What would make me most happy is if people with all kinds of different tastes come together and enjoy the game in their own ways,” said Aya Kyogoku, one of Animal Crossing's creators, in an interview with The Guardian.
Despite the good numbers the company presented to investors, Nintendo warned that COVID-19 and its worldwide expansion have also affected its supply chains, sales and investment in R&D. "The situation regarding COVID-19 is changing day by day around the world, so we will carefully monitor trends as we continue to collect information and take the necessary steps to lessen its impact," the company said in its quarterly report. The Kyoto-based company said it expects this impact to wear off by the summer.
An example of the effects on the supply chain is the suspension in April of shipments of the Switch console to Japan from Vietnam due to the closure of factories in China. “There are restrictions on sales channels in each country due to measures to prevent the spread of the virus, including restrictions on movement outside the home and closure of retail stores. This effect may be prolonged. Also, if physical distribution is suspended, we will not be able to sell hardware or packaged software through e-commerce,” explained the company in its report.