Nintendo profits fall 2021 versus last year Switch console sale decline being the reason - During the last quarter (April to June 2021) Nintendo's sales on both consoles and games have fallen by 21.7% and 10.2% respectively, compared to the same period in 2020.
In total, 4.45 million Nintendo Switch has been sold in the last 3 months, down from 5.7 million last year.
As a result, the company has reported a drop in operating profits of 17% from the first fiscal quarter of 2020. The 1,090 million dollars obtained (approximately 920 million euros) do not reach the forecast of 1,180 million dollars calculated by the analysts compiled by Refinitiv Eikon (through the Irish Times).
Another point on which Nintendo and analysts do not agree is the forecasts regarding annual profits. The console manufacturer expects to reach 4,560 million dollars (3,848 million euros) by the end of this fiscal year while analysts expect a goal of 5,690 million dollars (4,802 million euros).
However, despite all these figures does not mean that Nintendo Switch goes wrong. Since its launch in March 2017 it has already reached 89.04 million distributed units. As for game sales, Nintendo has said it is satisfied.
Nintendo profits fall 2021 versus last year Switch console sale
The big reason behind this drop in sales is the game Animal Crossing: New Horizons, title that came out on March 20, 2020. In its first 11 days alone, it managed to sell 11.7 million units. During its first 4 months (including the first fiscal quarter of 2020), the software sold 22.4 million copies. Currently, more than a year after its launch almost reaches 34 million.
Animal Crossing: New Horizons arrived at the right time and fulfilled an unexpected goal. It came out just as global confinement due to the Covid-19 pandemic was announced. The isolation already increased the sales of games and consoles, as they are an ideal pastime to liven up the long waiting times.
However, New Horizons was an undisputed success within the boom period of video games due to 2 reasons. The first is that the Animal Crossing saga has already been reaching great numbers because they are games for everyone. Anyone regardless of age can quickly understand how to enjoy the experience (in part because there are no levels or monsters to beat). The second reason was its premise: to invite the player to live on an island with different animal neighbors and to be able to visit the worlds of other gamers (including friends and family).
Nintendo profits fall 2021 versus last year Switch console sale
In this way, the game became the perfect escapism at a time when everyone was on their own social island. It reflected the conditions of those months and gave a virtual solution to interact with people, real and fictitious.
Nintendo has recently failed to release a game that drives both hardware and software sales. As an example, here are the units sold for their titles launched last fiscal quarter:
- New Pokemon Snap: 2.07 million
- Mario Golf: Super Rush: 1.34 million
- Miitopia: 1.04 million
For this quarter, Nintendo's big title is the newly released remake of The Legend of Zelda: Skyward Sword. At a promotional level, the game has been labeled as "the best way to enter the saga", presumably to capture those gamers who discovered Zelda thanks to Breath of the Wild, launch game Switch that continues to sell despite its years. Meanwhile, a release date is still awaited for the sequel to the aforementioned Breath of the Wild.
Nintendo profits fall 2021 versus last year Switch console sale
Some analysts have also interpreted Nintendo's drop in sales and profits as the beginning of the end of Nintendo Switch. What is certain is that there is a demand within the oldest gamer community for a review of the console, a new model improved at a technical level that allows the games already released to work better and that is able to run more advanced titles that come out on other consoles.
Although a Nintendo Switch Pro was rumored, which would have been, according to leaks, a Switch 2.0, Nintendo recently announced the OLED model. It has a larger OLED screen than the standard, and some additions, but it is neither what analysts expected nor what fans expected. However, it will not be known if this review will have a positive impact on sales until it is available; Nintendo Switch OLED will be released on October 8, 2021.
Nintendo profits fall 2021 versus last year Switch console sale
As for games sold-consoles that allow Nintendo to achieve its annual goals, the company has many bets focused mainly on the last quarter of 2021. They include Metroid Dread (an adult game that comes out at the same time as OLED, but that belongs to a saga that does not reach large sales figures), Super Mario Party Superstars (family proposal and a response to the good sales of its previous installment) and Pokémon Shining Diamond / Shining Pearl (remakes of old Pokémon games).
And at the end of the fiscal year (January-March 2022), Nintendo will release Pokémon Arceus Legends, the first installment in the series that will be an open-world adventure instead of the traditional role. The video game company is given to announce part of its catalog at the last minute, so there could be more featured titles or possible hardware revisions.
