Animal Crossing: New Horizons gives players a chance to build their own island home to share with villagers and friends. However, there are a few odd occurrences on these islands that don't quite make sense. Besides being the only human in town, players also don't appear to have any ties to a time before they lived on their island home, save for letters from their mother. Animal Crossing's dream islands may explain why players seem out of place in their town, as it might be possible the island they live on is a figment of their own unconscious minds.
Beds have more than just an aesthetic purpose in an Animal Crossing: New Horizons bedroom. Lying down to sleep, players have the ability to "Dream" while they doze. When dreaming, the NPC Luna will appear and offer players the ability to enter a Dream Address, which allows them to travel in their sleep to another island. They can also share their own island with friends in its current state. Players can't interact with an island in a dream, but they can walk through it and admire the other player's designs.
While visiting dream islands is a fun way for players to share their Animal Crossing homes with friends, it could also explain why Animal Crossing player characters seem to be out of place in a world filled with sentient animal villagers; perhaps all islands are dreams invented by the main character. Instead of dream islands being a way to keep players safe from fruit thieves and seashell snatchers, it could expose the deeper underlying plot: Every main character is actually asleep.
Animal Crossing: New Horizons Characters Could All Be Asleep
The theory of Animal Crossing: New Horizons' main character being asleep is backed up by several inconsistencies throughout the game. NPC characters like Celeste, Flick and Gulliver come and go from the island, but it isn't clear where they live when they are away. Meteor Showers cause Star Fragments to fall from the sky as treasure for players to collect, and balloons appear from seemingly nowhere for players to shoot down. Many of the average occurrences on a player's Animal Crossing island seem whimsical and unexplained, but if the main character is dreaming, these strange events would be less odd.
While there is little detail to explain the backstory of the main character in Animal Crossing: New Horizons or the oddities that occur on their island, the limited knowledge works well for the game's limited story. It allows the player an open canvas for their character, so they can invent their own ideas about how they ended up on the Animal Crossing: New Horizons island - including it all being just a dream.