Heading into 2021, most publicly traded gaming companies had released at least two full quarters of business in quarantine. What we are now able to see is what the whole picture looks like when looking at the reminder of 2020. Today though, the focus is on Nintendo and their recent release of third quarter earnings that ended December 31, 2020. Spoiler alert ahead, Nintendo never fails to surprise with their domination since the release of Switch and 2020 just showed how beloved their IP is.

There is no better place to start then to talk about how the Switch has been a resurgent force for Nintendo and its return to console gaming since it was released nearly four years ago. Hard to believe that it has been almost four years but here is the Nintendo Switch constantly in stride and beating previous records. As of December 31, the Nintendo Switch was the 5th best selling Nintendo system ever with 79.87 million units, only trailing the GameBoy Advance by a few million and by the end of the fourth quarter it will have surpassed that system to become the fourth best selling. This means the Nintendo Switch is only trailing the Wii with a little over 100 million, the GameBoy with around 115 million and the DS at around 154 million.

It seems very likely that at the end of FY22 which ends March 31 of next year, the Nintendo Switch will be the second best selling Nintendo System ever, only trailing the DS family, which had four iterations and whose lifespan ranged from 2004 to 2013 when the company discontinued the system after the 3DS had established itself. Nintendo has only iterated on the Switch once so far with the Switch Lite, which has been selling quite well. In the first three quarters of the fiscal year, the standard Switch has been outselling the Switch Lite at a ratio of 2:1, which is great considering the total sales for the Lite are slightly above 13 million, meaning that a variant of the Switch has almost sold more than the WiiU.

One area that the Switch is still lacking is attach rate, which is currently around 6.6, which means that each Switch owner has purchased 6.6 games. This attach rate is fairly on trend with a system like the DS and better than many other Nintendo consoles but it is drastically behind the Wii which had an attach rate of around 9.

As it stands the Switch is about half the time on the market and over half the sales, which means that with a few more iterations over the years to keep the system competitive with the evolving technology, the Nintendo Switch has a good chance to become the best selling Nintendo system of all time. It even has the potential to become the best selling video game system of all time, if it is able to keep the momentum going and top the PS2, which by most estimates ended up selling slightly over 155 million units.

In FY2020, which ended March 31, 2020, the Switch had sold slightly over 21 million units for the year which was helped by the introduction of Animal Crossing New Horizons and quarantine. Even with logistical problems, which were reported on earlier in the year along with adapting to a new normal of working from home, Nintendo has sold 24 million units so far, which means that it has already surpassed the previous 12 months but that it will keep growing with two big releases that should bode well for Switch sales.

Super Mario 3D World plus Bowsers Fury will be released on February 12 and Monster Hunter Rise will be released March 26. 3D World was one of the last great games from the undersold WiiU. The game recieved great scores when it was originally released back in 2013 and is already getting very favourable early impressions from many outlets. It was the second best selling game on the WiiU but still only managed to sell 5.86 million copies similar to New Super Mario Bros U.

It would be safe to project 3D World to perform similar to the port of New Super Mario that was released back in 2019, which has since sold over ten million copies. I can see it outperforming that game for a few reasons though including its art style, inclusion of a new open world style mode, the red and blue Switch variant that will be released alongside as well as quarantine still in effect. This is not a hot take but 3D World felt very under appreciated.

On a side note, the only game that I think still needs to be ported to the Switch would be The Legend of Zelda Wind Waker HD, which was already a port. Based on our views of the 35th anniversary, there is potential that it could be released.

Monster Hunter Rise is releasing in a similar window to Animal Crossing last year, but does not have the same mass market appeal. Thats not to say that this game won’t sell well, because it will. It’s just not practical to assume that it will sell 30 million copies. Monster Hunter Rise is a Switch exclusive coming on the heels of Monster Hunter World and the Iceborne expansion, both of which sold and reviewed very well. Capcom released a demo in January which was generally favourable for the game that seems to have understood how to use the strengths of the Switch.

Nintendo likely sees these two games and these two Switch variants selling well as they have increased their forecast for Switch sales from 24 up to 26.5 million, which will likely be surpassed as they surpassed their previous projections last year. It’s better to under promise and over deliver than the other way around.

On the big picture side of things, net sales were up for Nintendo were up over 37 percent at 1404 billion yen versus the same three quarter in the previous fiscal year which makes perfect sense as one of the bright spots of 2020 was that many people rekindled their love for gaming, especially for Nintendo and the nostalgia infused platform. Hardware sales were up around ten percent compared to the same time frame but the big indicator of the times is that digital sales were up 105 percent to around 256 billion yen.

When looking at the micro on the software side, Animal Crossing New Horizons is now the second best selling Switch game with 31.13 million, only behind the WiiU port Mario Kart 8 Deluxe with 33.41. Many people think that Animal Crossing will eventually become the best selling Switch title but in my opinion MK8 Deluxe just hits on the more mass appeal when buying a new Switch.

When it comes MK8, every single person in the house can play and together and until they release a new Mario Kart, if they ever need to, MK8 despite being ported almost four years ago, still feels pretty fresh. It is also constantly above Animal Crossing on the Eshop, even if only by a few spots and that is a good temperature check of the overall situation.

Other software highlights for 2020 include Ring Fit Advneture being a surprise hit selling another 5.95 million units in the first three quarters of FY2021, bringing its total up to 8.68 million in just a little over a year on the market which is very impressive for any game, let alone a premium, exercise peripheral. Amazingly, Ring Fit Adventure was the 4th best selling game on the Switch in the past three reported quarters.

Where does Ring Fit Adventure go from here is something I wonder about. Do you do something similar to Wii Sports and Wii Sports Resort, where the sequel had the motion plus accessory or does Ring Fit Adventure just exist in solitude? It’s hard to release a sequel for that game because then do you package in a new ring to try to attract new users or do you release just the game for the existing users.

Super Mario 3D All Stars also performed well despite its underwhelming effort and lukewarm reception, moving 8.32 million copies. With 3D All Stars being released at the end of September, this means that this game sold almost ten million copies in about three months. Would it have sold better, if they included the other Galaxy title or if they did a little more for Super Mario 64.

Paper Mario sold over 3 million copies, Hyrule Warriors sold 2.84 million, Clubhouse 51 sold 2.62, Pikmin 3 sold 1.94, Xenoblade Chronicles sold 1.48 and Mario Kart Home Circuit sold 1.08 million which is very good for a premium priced release and likely fell in line with their expectations for that title. With all these new additional games that have sold over one million copies, that now brings the total to 29 games that have sold at least a million copies on the Switch, including 20 first party titles and 9 third party titles. We now also have six titles that have sold over 20 million copies, which is astounding.

Keeping with software, Nintendo sold 168 million units in FY20 and early on they were projecting to beat that figure with 170 million units in FY21. In just the first three quarters, Nintendo has already topped that figure with 176 million copies sold. With the unbelievable streak that Nintendo has been on, they have now increased their projections to 205 million copies. With two huge releases from 3D World, Monster Hunter Rise and all the other evergreen titles that people have yet to purchase, this figure will also likely be surpassed.

Obviously, Nintendo doesn’t need to do much to keep success going. Although the hardcore fanbase that purchased the system in year one are feeling a little starved for new content, especially if Animal Crossing wasn’t for them, Nintendo will still continue to have massive hardware and software sales with minimal tentpole, first party releases. 2020 was basically Animal Crossing New Horizons and just look at the sales figures we have discussed.

Moving forward, many expected Nintendo to release an updated version of the Switch to reinvigorate the fanbase, something along the lines of a Switch Pro or Switch Max or Super Switch but as of right now timing is everything and the current consoles are selling very well. When answering questions in a conference call after the financial release, Shuntaro Furukawa (Representative Director and President) spoke about the way to keep momentum going.

Heading into the fourth year of the Switch console, their answer on a new Switch model as well as talking about the new Red and Blue Mario version launching shortly before the Monster Hunter version. “With this release schedule for new hardware and Nintendo Switch having just marked its highest sales in its fourth year on the market, we do not have plans to announce a new model” This is a typical boring, corporate answer that you would expect from Nintendo. As a company that typically keeps most of its information tightly sealed, this sounds like announcing a new and improved Switch console before the release of these two upcoming variants would hinder sales.