Nintendo’s Animal Crossing Is the Biggest Hit of the Lockdown

The latest iteration of the Nintendo Co. franchise couldn’t have come at a better time—for the world’s socially distant people or for the Japanese game maker.

One of the biggest hits of the coronavirus era was originally slated to debut in 2019, before the Covid-19 disease was first detected. But the game was delayed so developers could improve it, adding to concern about how well Nintendo’s aging Switch console would perform ahead of major hardware releases from Microsoft Corp. and Sony Corp. And as the virus broke out in China, forcing factories to close for months, production bottlenecks threatened to limit supply of the console, sending Nintendo’s shares in mid-March to their lowest in almost a year.

The debut of Animal Crossing: New Horizons on March 20, as much of the world huddled in quarantine, quieted any doubts about Nintendo’s prospects, breaking Switch sales records and turbocharging demand to the point of causing a global supply shortage. Nintendo’s major challenge now is figuring out how to deliver a Switch to every person that wants one.

“The game is the perfect fit for people today, because you can spend unlimited hours in the warm and gentle world,” Morningstar Research analyst Kazunori Ito says. “I have never seen so many people sharing so many screenshots of a single game on social networking sites.”

Animal Crossing: New Horizons sold more packaged copies in Japan in its first three days, 1.88 million, than such legendary Nintendo franchises as Super Smash Bros. accomplished in their first two weeks, according to game magazine Famitsu. Since its release, New Horizons has surpassed 3 million in domestic sales, a figure that understates its popularity, since it doesn’t include digital downloads. It’s also exploded on smartphones, with average daily installs of the game’s app version, Animal Crossing: Pocket Camp, since the release of New Horizons growing almost sevenfold from the average for the preceding 30 days, according to SensorTower.

Nintendo, which will report earnings on May 7, is likely to blow past its conservative estimate of 19.5 million Switch console sales in the fiscal year ended on March 31. The $300 Switch and the $200 Switch Lite, a handheld version that doesn’t connect to a TV, together sold more than 390,000 units in Japan the week that New Horizons became available and a further 280,000 the following week. The Japanese market accounts for 20% of Nintendo’s total Switch revenue, according to the company.

Of course, many video games are surging in popularity these days, but Animal Crossing’s family-friendly appeal—a trademark across Nintendo’s franchises—may bring it an advantage. New Horizons is the fifth iteration of the Animal Crossing virtual-life simulation game, which was originally released in 2001. In the current version, players fly to an uninhabited island where they have a choice of real-life activities, ranging from fishing to gardening to arranging mortgages. To be social, people can hop to neighboring islands and see what their friends are creating.

Nintendo developers are allowed as much time as they need to be satisfied with the quality of the game before its release, according to a company programmer, who asked not to be identified because he’s not authorized to comment publicly. The additional time given to improve New Horizons accidentally landed it right in the middle of widespread lockdowns and shelter-at-home orders as the world grappled to rein in the spread of the novel coronavirus. For many, the experience of the pandemic and the escapism the game has provided will be indelibly linked.

“No other games have such an overwhelming sales momentum, and it’s clear the franchise is getting a lot of new fans due to the world’s fight against coronavirus,” says Famitsu’s head of research, Mitsunobu Uwatoko. “Nintendo would have sold more Switch units if it had enough inventory.”

Now three years old, the Switch console is selling faster than when it first launched, causing logistical headaches for Nintendo. Most Switch production in the past couple of months has come from Vietnam, with Nintendo’s production partner in China, Hon Hai Precision Industry Co., prioritizing Apple Inc. iPhones while restarting factories after coronavirus shutdowns. A Nintendo spokesman says China’s production capacity remains “limited.”

The company had to limit domestic shipments to fulfilling existing preorders in the second week of April. The Switch is sold out at major retailers in the U.S., Japan, and many European countries. New Horizons has reportedly been removed for sale in China after some players in Hong Kong used the game to stage pro-democracy protests.

For the lucky ones who’ve managed to get their hands on the device, life in New Horizons is pretty good, if not without some modest challenges. Masahiro Sekiguchi, a 38-year-old product planner at a startup in Tokyo, says he decided to try Animal Crossing for the first time after his company asked employees to work from home. He now spends a couple of hours in the game every day, bonding with his six-year-old daughter, who plays mainly to design furniture and clothing.

“Some colleagues use Zoom’s video chat app to play the game together, and I have set up a dedicated thread in the company social network to ask basics,” Sekiguchi says. “They told me I should hit rocks with a shovel to get ironstones, because it seems the resource is important but supply is limited.” —With Debby Wu
 
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