During months of coronavirus lockdowns, Nintendo has been riding high on record sales of Animal Crossing: New Horizons and the Switch game console. In the first six weeks of its release, the company sold 13.41 million copies of the simulation game set in a fantastical, capitalism-driven animal universe ruled by a brutal financier. In the 11 days after the game’s release on March 20, the company sold roughly 1 million copies a day.
But in a briefing on its full-year financial results this Thursday (May 7), the Japanese videogame giant warned that the virus may continue to delay the procurement of necessary components for its consoles and physical games, as well as impede future game development.
Earlier this year, Covid-19 outbreaks forced Nintendo to halt production of its Switch Lite and original Switch console, which are produced in Japan, China, and Vietnam. The pause prompted a global shortage just as New Horizons was emerging as one of the most popular videogames of the year.
In the earnings call, Nintendo said it recently resumed production of the Switch, and that production delays had a limited impact on its business overall. The company sold 20 million consoles over the past year, with sales growing in Japan, North America, and Europe. Full-year sales for the fiscal year ending on March 31 hit $12.31 billion, a 9% increase from last year. The company posted a net profit of $2.43 billion, a 33.5% climb from last year.
But the company isn’t out of the woods yet. “We may be affected if there continue to be issues involving the procurement of necessary components,” stated the company in its report. The company didn’t specify which products may be impacted. Outside the consoles, supply chain issues have delayed production of the company’s Joy Con controllers and other accessories.
While game developers continue to work remotely, Nintendo said that the difference in work environments could delay the release of future Nintendo games, too. Problems with childcare, delays in communication, and other work-at-home issues have riddled the videogame industry, reports the New York Times. The company also works with many overseas subsidiaries and companies to produce its games, which are struggling to meet their own deadlines.
“As a result of these factors, we may not be able to proceed with the release of Nintendo products and the start of services as planned,” wrote the company in its report. “This is also true for other software publishers, so it may not be possible to provide game content on Nintendo platforms as planned.” Nintendo planned to release seasonal updates to New Horizons this year, as well as add-on content for Pokemon Sword and Pokemon Shield.
The pandemic has already led to several high-profile videogames dialing back on features, or delaying their launch date. Sony postponed the launch of The Last of Us Part II indefinitely, explaining in a tweet that “the global crisis is preventing us from providing the launch experience our players deserve.” Sony also delayed the release of Iron Man VR.
Nintendo can thank women, as well as millennials and Gen Z, for the breakout success of New Horizons. The company reported that overall, over 40% of New Horizons players are women, and a high percentage are players in their 20s and 30s who have played prior Animal Crossing titles. But if Nintendo’s research and development struggles under the pandemic, it could miss out on converting an eager new audience to even more titles in the Nintendo universe.