Net sales and profits down at Nintendo because Animal Crossing set the bar too high

There's an Animal Crossing-shaped hole in Nintendo's latest fiscal report.

The endearing island life simulator burst onto the scene when it launched towards the end of March last year, partly because it was the latest installment in an immensely popular franchise, and partly because the pandemic meant the entire world had nothing better to do than throw themselves at the mercy of Tom Nook's dubious mortgage schemes. 

According to Nintendo, New Horizons set an incredibly high bar after selling a whopping 22 million units by June 30, 2020, which is why net sales and profits have suffered despite hardware and software sales both remaining "steady."

"Nintendo Switch hardware and software sales both remain steady, but overall sales declined compared to the same period of the previous fiscal year, when Animal Crossing: New Horizons was a major driver of the Nintendo Switch platform business," said the company.

As noted in the company's fiscal report for the three months ended June 30, 2021, net sales decreased by 9.9 percent to 322.6 billion yen ($2.9 billion), while profits declined by 12.9 percent to 92.7 billion yen ($845.6 million).

In terms of Nintendo's more recent releases, the company said fresh-faced titles like New Pokemon Snap (2.07 million units), Mario Golf: Super Rush (1.34 million units), and Miitopia (1.04 million units) all hit the ground running.

Catalog titles also continued to sell well, with Mario Kart 8 Deluxe (1.69 million units) and Animal Crossing: New Horizons (1.26 million units) bolstering their already impressive lifetime sales during the quarter. 

Hardware sales fell by 21.7 percent year-on-year to 4.45 million units, meaning the Switch has now sold 89.04 million units since launching in March 2017. Software sales also declined by 10.2 percent year-on-year to 45.29 million units, bringing lifetime Switch software sales to 632.40 million units. 

Although both of those figures are down year-on-year, Nintendo once again pointed out that Animal Crossing: New Horizons set an incredibly high bar after launching on March 20, 2020.

Turning to Nintendo's digital business, sales of downloadable software declined by 24.9 percent year-on-year to 75.9 billon yen ($692.6 million). On the mobile front, smartphone and IP related income essentially remained flat, dipping by a miniscule 0.6 percent year-on-year to 13.1 billon yen ($119.5 million). 

Looking ahead, Nintendo's consolidated financial forecast remains unchanged and the company still expects full-year Switch sales to hit 25.5 million units by March 31, 2022.