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Sony (SONY)

Participants
Hiroki Totoki CFO
Sadahiko Hayakawa IR
Yuri Furukawa Bloomberg
Junya Ayada JPMorgan
Yasuo Nakane Mizuho Securities
Ryosuke Katsura SMBC Nikko Securities
Masahiro Ono Morgan Stanley
Call transcript
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Unidentified Company Representative

Ladies and gentlemen, it is now time to start Sony Group Corporation's Fiscal 2021 First Quarter Earnings Announcement. And my name is [Okada], in charge of Corporate Communications. I shall be serving as the emcee today.

Now this session is being held for journalists, analysts and institutional investors to whom we have sent out invitations in advance. And this is being live webcast through our Investor Relations website today.

for Totoki, you Deputy results the the results Hiroki to and and have consolidated to present fiscal forecast we the President Executive CFO, also First, XXXX. fiscal XXXX consolidated have we'll Q&A And then a session. duration is about The minutes. XX Mr. please. Totoki,

Hiroki Totoki

And you to talk today. would about Thank I like X these much. topics very

to We standards the fiscal IFRS have changed our year. current from accounting

first all previous significant increased to So taxes ¥X,XXX.X based ¥XX.X result year-on-year increased explain ¥XXX.X and the year billion ¥XX.X operating by the current the segment results Corporations’s income billion to fiscal slide a ‘XX billion will fiscal for Fiscal for billion. increased first IFRS. ¥XX.X XX% increased year consolidated the both Group and quarter to to I income Sony the the for on current ¥XXX.X the fiscal the quarter. first attributable quarter today, Income This sales to ‘XX which net previous quarter. fiscal shareholders and are income or the billion ¥XXX.X forecast before to for billion, consolidated year-on-year of year, record results billion quarter for highs same compared shows

consolidated for results show ‘XX. fiscal will I Next the forecast

remains the unchanged consolidated Our forecast sales previous forecast. from

has Our reflecting to ¥XXX the from operating billion, income increased our forecast primarily first ‘XX results billion ¥XX previous quarter. forecast of fiscal

to net attributable for income billion. to taxes income and Group to forecast forecast before revised income have our for upwardly We also ¥XXX billion, Corporation’s our ¥XXX Sony shareholders

billion. Financial from previous decreased billion consolidated for the Services excluding operating ¥XXX segment, to forecast cash has the Our flow, forecast ¥XX

shows an segments. such in for forecast I the catalogs, explain by for business operating ‘XX. will upward are as profit, our included flow now This acquisition benefit of segment Although forecasted we each in revision from of slide assets IFRS. operating the under cash situation music cash in our the which fiscal content in will forecast increase project flow

hardware offset Fiscal segment. decreased decrease partially deterioration billion, software a of year-on-year the increased X & ¥XXX.X income an the Network due due ¥XX.X impact year-on-year billion expenses. First in to primarily the ‘XX profit to resulting rates, Services billion, primarily administrative and sales. foreign X% in the sales general launch first is exchange and Game sales increase in from quarter of an impact selling, to PlayStation sales, by lower significant of increase hardware software Operating ¥XX.X and a to in

which demand was of Thanks of year-on-year, is game first-party – of the fiscal ended Show quarter to high software remaining revenue fiscal in to year previous decreased the the million PlayStation quarter same units the world, is change previous to forecast profit XX.X compared decreased number COVID-XX from remains hit. decreased fiscal Ratchet PlayStation services the of titles. selling expanded Similarly, March But of that more ‘XX quarter, quarter of to around and there was the growth. PlayStation was titles compared And and which XX% play Rift same year fiscal to XX% from quarter. when software Sales that XX% decrease The the forecast. ‘XX first same XXXX, fiscal first & in same and due of primarily the year’s to the before Part the XXXX, time believe quarter compared of Nevertheless, was X, last XXXX, of to previous fiscal add-on its stay-at-home sales launch. in but showing years. Show Our released no quarter and in sales fiscal II add-on over pandemic, network increased total Fiscal ‘XX continued Software exceeded to Us we the XX% fiscal quarter have the including Apart XX, significantly X we than part when software during target increased revenue contributed our the Clank: year third-party a unchanged strong after sales during this sold units MLB year the Last compared game sales, we MLB big X XX expectations. market of of The has steady all Of a significantly the XX fiscal users the the the

than of Ghost different technological praise acquisition announced PlayStation as XX excellent had which to due have first-party titles software and which oversees of for and production high successful first-party with on ‘XX we June, title, MLB versions company from exclusively one development have to acquired and strengthen initial and Horizon compelling Studios. under XX hits to the IP, and been success series, begun Housemarque, upon PC a global We of of Us In its game is PSX our production Last the technology XXth Returnal, developed is basis, Zero a announced software capabilities. has Tsushima. than platforms on Dawn been Gone. for a Days on between studio produced the such extremely the software we PlayStation studio is Show fiscal in we Horizon The and Of our as In quarter. Nixxes, it and porting has accelerating has platforms studios Finland XX years acquisition Dutch numerous first Housemarque the received which that release have superb such Finnish that series the investments creativity. July, more PCs. such our of released other followed was capability And which Studios, its for Seven the PlayStation

offer a support will horizontal all studios manner. to Nixxes in that expect technological our We

the supporting of our add-on Going strategic strengthening forward, content. offerings, intend service make multi-platform IP, including our proactively to we to continue investments developing strategy new with and aim through

transfer billion momentum. Nevertheless, previous considerably billion. last Slayer. strong forecast driver to due to and in all of products fiscal streaming, of our to Operating onetime trillion, equity of we included mainly sales. same current exceed ¥XX.X Visual the increased and operating gains blockbuster the in stake which that The onetime driven Slayer by Music significantly advertising-supported fiscal – third is Fiscal The ¥X.XXX because paid – streaming. benefit COVID-XX impacted ¥X.X expect previous income of and year’s the to the Yaiba sales fiscal billion, significant recorded was of year are to the than to increased Movie: to Mugen party. sales streaming of driver of increase revenue, billion operating sales negatively Platform, in a is due which No primary growth year the ¥XX.X a ‘XX Fiscal increase year primarily fiscal to Media billion of business growth income the of pandemic. increase the the this ‘XX of the compared the previous Kimetsu to to expected our largest ¥XXX in in in Next which strong categories, the segment. recovery ¥XXX.X income hit from equity Demon quarter an previous Streaming to to billion increased Train grew by higher this were related in year-on-year increase gain in as sales was QX ¥XX primarily XX% fiscal Demon stakes billion and for operating transfer forecast ¥XX billion, a is compared historic income ‘XX ¥XX.X the Sales expected

and During the revenue quarter, in Music XX% significantly in year-on-year Music streaming increased Recorded XX% Publishing. year-on-year

XXX music to Somethin’ these, hop than Alamo we growing as to and as that and The and quarter music. means, provides new Artist business, will strategic well, we new of are strategically in AWAL, other of are acquisition game in improving of July, creates average announced by further opportunity artists. beyond the label their revenue-generating ranking, In songs an the careers. community songs partnerships in it investment, a company market, steadily the hits artists in this global and to songs an in our U.S. artists stages the debut hip In this discovering hit platform, We the and our enabling on Roblox. Roblox top the the go we production generate focused from various we The the nurturing increasing DIY opportunities us our events with our In growing such area alliance in with podcast of rapidly complement higher investments and aim XX Service announced British acquisition through business ability profitability alliance May. completed the artists And Records, virtual ranking. provide Spotify’s Through June, of to connect to had indie Orchard generate major grow our a online acquisition we proactive Else, in This strategic service and competitors.

was mainly QX to Motion billion, ¥XX box previous billion, sales than increase Next impact trillion, compared situation Pictures, income billion, is decrease office ‘XX Motion to ¥X.X decrease of television by XX% COVID-XX. to to is increase resurgence to to television our previous in due will partially ‘XX expected in it and the increased what recovered billion Motion to in by billion it Pictures ¥X.XXX productions. and decreased when due Fiscal product are to to a to primarily of year-on-year in cost operating to and deliveries of billion an the income prior an normal segment. originally XX% offset XX% anticipated to ¥XX of uncertain due year-on-year production while the Pictures, mainly sales and our Pictures In programming licensing sales sales. the sales decrease ¥XX.X remains in Media due mainly later of offset Operating to the COVID-XX, due of a in ‘XX about productions. forecast FY U.S. Networks to to increase increase sales revenue, compared to ¥XXX.X release of TV forecast theatrical product. to has decrease Fiscal expected revenue return ¥X partially

flexible to the a Given maximize long-term that these to are taking for market to works. as value are introduced so be circumstances, films to of release our approach ready we strategy those

the streaming product subscribers at XXX% and the previous in demand postpone caused at video direct-to-consumer and DTC increasing SonyLIV, XXXX, films for animation video release major service anime of paid from and fiscal we customer remains while their exceeded from decrease year. thought increasing our we decided services Networks, it lack the in video example, time releases Transylvania: theatrical Venom Flix, paying for and films significantly Transformania, revenue we licensing year, releases with reaching by and also revenue the June streaming new further at last originally acquired since DTC which approximately theatrical to catalog decided achieve. For like to Pure of has increase approximately services to video number were to In Hotel scheduled Meanwhile, strong, which that XX% India. in quickly, the fiscal Vivo, has content theatrical release. its license major year subscribers Cinderella Media base our the another in we acquisition, our services are a take of service would today increased the

¥XX.X we quarter in COVID-XX. the Mainly unit the the ¥XXX.X primarily quarter which expected increased & high-end small is since an digital billion has a Fiscal the the Products market foreign ‘XX exchange billion an to fiscal Electronics was are cameras same market and negatively of – business, remains billion increase well rates, to of televisions increase due demand impact mix. sales quarter. increased XX% products, operating continued stay-at-home which reflect to the were trillion, products. for to ¥XX focus of increase and forecast ¥X.XXX year, to ¥XX.X see value-added is in is In significantly year-on-year, the Solutions the of ‘XX our to stay-at-home TV a billion to the sales decline forecast improvement year low-priced medium-sized to the in income Next last But live strong. that impacted significant a screen product and sales of segment. and the demand Operating the due severely fiscal as the for beginning previous to the in billion, benefit previous results compared in and the fiscal income increase compared expected ¥XXX to by ¥XX billion as sales to increase to first

COVID-XX corporate time, of that to place the our to end the had Asia recent parts activity, operations year such and in year. meaning high-spec well component – May. due camera same products high shift average – were in While focus supply from product be risk business, on governments in chain rising demand world reduce side Southeast COVID-XX, the the shifted we of stay-at-home significant year-on-year. In to to supply to tight, higher shift as risk a of also recover factories demand lower we digital price as resurgence models, incorporates our and as has TV at due supply restrictions XX% negatively side to panels and caused sales Fiscal strong and resulting this a in a maintained all a to – the have the in At as our personal is and There’s have a a second the from demand value-added in as could incorporated ‘XX of price market performance significant suffered risk our forecast impacted. strong around demand in contraction reasons selling fiscal of the half Malaysia which the competitiveness. emerging well

‘XX shipments is income billion are Next increased to billion. ¥X.XXX Chinese billion and to from stagnation to X% compared unchanged increased ‘XX quarter ¥XX.X year-on-year May, market billion manufacturers Sensing first Fiscal previous year-on-year Imaging of since ¥XX income decrease have Chinese our ¥X.X sensor Fiscal sales to the sales expected Solutions. adjustments. operating inventory to the primarily business, trillion, to previous ¥XXX.X our smartphone the year to forecast the but & forecast. due the and forecast remains In mobile slowed operating

certain of and demand overall our sales this since image customer year quarter for and shipments of decrease the quarter into We we because Chinese However, line incorporated for the sales in the exceeded offset sensors same previous the a of our to have for increase to able and year-on-year customer we was were segment that to shipments profit steady some and essentially generate fiscal to recovering extent additional in in recorded major profit with that forecast, level a non-Chinese cameras. demand expectations. a

and adoptions this made fiscal strides expand have our made progressing market our manufacturers we recovering a in efforts customer basis to we our smartphone far the volume is sensors Regarding smoothly, Chinese base, image so of year. by on share have

plan fiscal In addition, our smartphone a it getting first we start sensors models in of value-added have many XXXX. a the good manufacturers off to that flagship design comes half when high launch image the gotten – to into to in

those ¥XX business the they as a a which which decreased speed Chinese to Services Chinese previously mentioned. market and subsidiary are ‘XX recover the On Since of is Limited. at lacking Life could to are in products recorded hand, due manufacturer, revenue market Last year, monitoring well is income smartphone concerned situation the the in we expected fiscal due that impact the are the sold have about impact Operating billion, momentum Fiscal from an net Financial of XXXX to decrease the big in we on the the year-on-year the quarter of first segment. in our recovery as XXXX other on short as onetime no Sony investments consolidated Financial X% profitability next a mobile China, the high-end hit smartphone Company because loss account to Services decreased year-on-year the like Life. by have at a sensor been billion term. of billion, is ¥XX gains primarily Sony separate mainly in Insurance to situation ¥XXX.X

May ¥XX an of we in the Life, bank billion Reinsurance today overseas Sony Life. discovered announced of SA in subsidiary Sony was the withdraw name unauthorized account consolidated an of As Limited, of approximately by this of year, out

to Sony the first recorded we in what with authorities matter work causing the on contracts funds a full relevant into. for authorities have impact Sony investigating After this gain concern, Life to the of sincerely the matter but accounting recover the equal of including amount this took reporting is As immediately the to a matter and to of action, We the no the customers entered that continue and discovery, loss occurred. apologize Life quarter. result, making insurance has withdrawal

Market in MCEV; grow from way. line important for strategy decided of sustainably previous Financial in policy At quarter. the covered value maximize May, forecast forecast. and previous from the income with assessing demonstrate Sony to the To business, this a Services ‘XX compared revenue of held document decrease new Services business strategy management Consistent the Value, value fiscal billion. billion is every the ¥XXX group in announcement, forecast profitable we X in we ¥XX remains year of have a strength disclose our IR progress earnings unchanged our Day explained for expected the Financial the supplemental in information Life: to indicators value to to Our to Operating Embedded the the

increased the Group’s increases. business by previous fiscal additional the Financial is that end dividend also share. to per contributions This expected through the The per year of my ¥XX to share at dividend the ¥XX you. remarks. paid Thank Services We make business Sony to stable concludes the

Unidentified Company Representative

Hiroki was Executive Totoki, CFO. Deputy and President That

people. Now will p.m. session p.m. of the there with a be X:XX duration minutes will at the session will XX And analysts media each. there question-and-answer time, and investors X:XX be the a And Q&A be the with then Japan session at

Q&A into been in be you please up able number up not that session you'll So listen signed has designated to if And in if in have webcast. advance, call signed have you advance, advance. over to the the the

gentlemen, people. So starting Thank be we session. you. Q&A media please with we'll our wait session Q&A Ladies until start and the the

of President start journalists. like and Senior the Ladies be IR, gentlemen, [Operator charge now session Shiro Executive wait the waiting. in Corporate Planning, short by Deputy Senior Matsuoka. for you and Vice and Q&A CFO, Kambe; Now President thank session. Q&A for while Vice please with will Naomi and we of charge made to a before start Finance start. to responses Totoki; So Instructions] I'd The like in President Communications, Hiroki Control, Executive and We'd

Unidentified Company Representative

Mr. to [Mr. Inomata] [Operator is ask question. person first from NHK Inomata? a Instructions] the

Unidentified Analyst

I can from I me. [Inomata] questions have regarding hear am the X you hope NHK. shortage of I semiconductors.

is So X favorable. and PlayStation Electronics doing

you going partnership about TSMC in of the a shortage what do forward? question, currently, semiconductors? the I hear Taiwan factory do of expect So shortage be may and building the semiconductors. the about is Sony. again, And what of the with impact Japan, And second once

comment anything there is TSMC on issue? you that can about So this

Hiroki Totoki

impact semiconductors. partnership was them potential our of Thank Number you they one shortage media number on build the TSMC with the reports the two in question. about and a the for regarding question when Japan. was factory And

I So semiconductors we for of questions, various actions. in X those to would shortage have And The have some been impacts like through various respond. areas. taking measures,

year, we're has PSX also of do we For And be a been of a supply areas. the that's target have the number units semiconductors, this we year semiconductors sold -- set. number that. not segment, chips of been this concerned. Electronics use various to the secured regarding necessary The to of has today in set. for Consumer And lot achieve And

So have parts And sources. source components inventory a parts for have concern. to and components, access we is second we well. as of and of But some availability do some strategic

have So various production the we and that be sales not impeded. so been measures taking will

we time going the So able being, we situation. been complacent. have to forward, for control now, the cannot remain But

to our to products. continue sell good like and have to able would produce access smoothly that information so we will we be to So

we you have that mentioned, out information. Regarding reports sent have that media not the

my critical. Japanese you very In industry as about is as that end international nothing the maintain if to at was competitiveness, as mentioned general, Mr. Yoshida, logic critical the in something logic But very is by a order the CEO, Thank response. look this. that is That in the of supply can the say you. So chips of we the are past, chips whole. now, there's

Unidentified Company Representative

From please. Nikkei Newspaper, [Ban-san],

Unidentified Analyst

from Nikkei there? Are Hello? [Bansan] Newspaper. you

Hiroki Totoki

we you. Do ahead. go still hear Yes, are you hear Please us? you [Mr. Ban], there?

Unidentified Company Representative

disrupted to please. From like [Mr. we Financial has person. Ban], [Inagaki-san], would I'm next proceed sorry. been Times, Since the to the line and disconnected,

Unidentified Analyst

me? Do hear you

Hiroki Totoki

hear you. we Yes,

Unidentified Analyst

mirrorless sorry. ask on professional From Financial like to This used the more your is consumer and being this? cameras business. about Olympics From results, Paralympics evaluation games, market, Tokyo I directly you Times, of your Sony not is From my financial [Inagaki]. widely. related is what would market is name to the to camera mirrorless

Hiroki Totoki

very question the very speak your we matter, you of event. much sports about ongoing camera sponsorship Thank to are on for business. because the the to sorry, allowed anything not I'm related

business year, because For from camera staying about shooting pandemic, opportunities. of are itself home people the business, camera and the last lacking

So last was year, situation fiscal the very for cameras. difficult

is business situation the fiscal this improving. that smoothly. forward, continue. trend going expected seems is year, going is it And to this From However, this

As Thank you Dutch -- share, Alpha, increasing rule, much. market Alpha is a very general and professional improving.

Unidentified Company Representative

reporter. Thank on take you. Nishida], We'd question. [Mr. like a next to freelance the

Unidentified Analyst

hope I'm being I clearly. heard

Hiroki Totoki

Yes.

Unidentified Analyst

have questions, please. X I

about is first The question the game business.

there the to and Are question that the saying elaborate you stated of is second rather is has or the of profitability a more? contribution hardware been hardware. The that of software yet You that balance is of on deterioration happen you some profitability between a little electronics Can camera. the hardware.

You've stated good It's Things business. this a very are doing in well. brief.

that think your a to to contributor Or you do electronics electronics, take continue little camera time can it will that it the before where think do more earnings? point or can true camera earnings? you you to have a contribute be a For your reached

Hiroki Totoki

Thank you.

or profitability the electronics by I mean about of the second about business, business business What earnings deterioration the of is is the the that did contribution. question camera hardware. game first future The And overall statement?

or trend those X I I accommodate think probability PSX. is how with will like about in the or the asking cover would you’re to this questions. of comparison the contribute. electronics Hardware, business

So put forecast terms the the structure rigid and for such together management. assumption unchanged. more focus many in remain think are of reform. very we are is we and this to Through going as I and improved have progressing we and have efforts, we into structure fabric, Things on have have entered PSX the profitability business, planned period in of smoothly. April, a electronics overall The robust we

that I to But earnings. demand can to to personally, continue the have withstand that improved They you. contribute our changes, take more those business. and their business Thank course, subject our have believe action a it is so measures to we they they Of contributor are genuine to changes. to

Unidentified Company Representative

[Masuda-san] Nikkei, from please.

Unidentified Analyst

[Masuda] you hear from can Nikkei here. me. I hope

Hiroki Totoki

you. hear I Yes, can

Unidentified Analyst

I have to related earlier question question. first an

So this and favorable. the has down, music but demand year, also gaming come stay-at-home for electronics is

upwardly have revised projections. the you So

saying structure very various now having in are that resilient is a changes. they should off, that some to be segments, So you people sold are but

So you transformation how number business. PSX do assess your two, Question efforts? gaming or

So be number to also active a of number monthly users currently, the sold units the and basis. of on

quarterly on slightly, think coming seems. it it's down I a basis,

you're long-term So growth, for but looking currently you declines. are seeing some

you do situation? assess how So the

Hiroki Totoki

Thank question. you for the

You had X questions.

The result first or we related the the of one company. are diversity businesses have was how and game business. resilient, restructuring we is transformation our of Number was to of two

to monthly active seems users a trend. be down So basis a on as coming the quarterly

how But regarding question, So have we of in had well, addition you first So we place. the growth? your restructuring do – assess how to that, long-term the taken do lot a different has a the game or the to able transform businesses. have achievement. structure think I businesses been their of games. And each think and And strength major that been the of titles I

the capabilities of increased. management So have been corporate level

So to are devise there a has to growth. but aspects situations. some to able And seek to each positive very well, were negative business were There now we strategy as momentum. been the now respond some long-term able

business, yes, it’s game the Regarding true.

was XXXX stay-at-home quarter, at biggest If first well, quarterly you there fiscal demand. impact it the basis, look on on a

But basis. increase that, with does an as mentioned seem in over there speech, the So if is yes, my fiscal you significant if is compare like it a you it I X on a XXXX, ago. years compare there decline

on term, here is think the growing the to trend, think and I there So a is stay. growth long I

So to market. will Thank able users we this experiences our that for us, to capture better better are the grow to opportunity you. to and we be going so services further provide

Unidentified Company Representative

Since one. running Furukawa-san, last time please. be will the is the question next out, From Bloomberg,

Yuri Furukawa

from hear Furukawa me? Bloomberg. you Can

Hiroki Totoki

hear can we you. Yes,

Yuri Furukawa

semiconductor, In applied Kumamoto have for July, of the land a the factory, to close acquisition or plot. I question. About you

Is -- a CMOS was already question. was ¥XXX billion first in That's have it be to you invest sensor, with have that -- is venture the to that is this with when plot factory? it plan? the in the CMOS amount, For TSMC? CMOS decided it Or joint going

profitability view point July business. the Second Or positive the it May, that range range? In there be it this about is question in June. reached about from negative was still in the game breakeven Is in the of PSX, onwards? will

Hiroki Totoki

I&SS fiscal it is Thank – your the this much you land year’s very acquisition Kumamoto. for The investment. but included was not CapEx acquisition a in matter. is plan? short-term the first, Is a long-term questions. it plot About in It

to it’s included sense, that. certain say in I can extent, was a plan. So In it investment that always, safely included. the

the Kumamoto Now PSX the the but situation. profitability very to and correctly And We Overall, to acquisition any in smoothly. assessment further details, from you more PSX TEC. that’s this how according profitability view the proceeding this plot have progressing was comments. it’s hardware on much. me is there profitability, refrain in is including hardware the of applied peripherals, of explain peripherals for Thank been making for edition, we saying, we been edition, reaching standard breakeven point standard plot, as more for let plan. the – But of point breakeven but June,

Unidentified Company Representative

Thank the session has the to to analyst the The be time for us afraid will the who questions. will session come begin for the hour change members XX from close this be of responding you. will members. some I'm since minutes media past there

Sadahiko Hayakawa

would Hirotoshi begin I and the Vice to [Operator of in and questions. Finance analysts JPMorgan, Naomi of the Ayada. your we to Corporate investors and shortly. Vice session to President further CFO; for from investors. Ayada Ladies patience. of Ms. in and Totoki, will for IR. Mr. like and Totoki IR; From session Mr. answering about your We Hayakawa, gentlemen, begin are the Planning seek for The and Matsuoka, in Control Indulge charge charge Senior President am start us. will session be Sony, the Hiroki We -- analysts. Instructions] Accounting, Korenaga, the Senior JPMorgan. and charge of Mr. From

Junya Ayada

have I questions. X

may price factors? is in be the also in The can I you factors improvement. demand have must average be on quarter. TV myself, the in an question and elaborate mix. of it You The quantitative and to also, situation the question and the assessment many market. first And substantive am or potential And evaluation this the is selling in those for product repeating asking statement. for the be than the camera, wafer. is the make rise and improvement prospects the by market. the qualitative supply second a first prices projections Will there quarter first contributed the The quarter? may the up. mind, inventory second distribution that rather EP&S The statement gone of the Can any also affected just capacity on wafer? I&SS. I the beyond, times. your of second wafers up quarter price question changes? of that number the your what are meaningful the going second first The of the the in And Bearing are what quarter, probability on quarter and And unit for the

Hiroki Totoki

Thank you very questions. much for your

I can assessment down and to supply of qualitative into ASP EP&S. to Your I&SS. first about it is indeed going like second questions. the do Is to respond evaluation with to is of would And situation? question attributable had the question the those to of make It's those difficult demand That product only really some the mix factors. sort statement. to betterment break the or up.

play. were promoted, For TV, Product high TVs like screens, end. at factors were both strategy,

of end We product. are shifting intentionally the to that

inches the smaller and for downward the itself are coming is of a trend. down. market There XX the market beginning the first quarter, So --

vaccination think we context, So proved mix that progressed mix, and right, recovering. COVID-XX full-size impact, supply demand. market, has was we are and is think last the camera, plan too. the country product good be right to our Unlike particularly each year, market when And I product camera the and in prospecting there I think mirrorless, have I mirrorless in a in a

I&SS a or was would there another situation enjoyed. or warrant is be does of concerns. towards level softer. I are market fiscal there the distribution hold time, the require So tailwind The second that to the we us of be or camera to handle But this that it at are concerned. we price the particular think question. key. half, point The panel will no this end inventory, not inventory going become year, TV, us How

first quarter it mobile mix. qualitative was was the That in XXX,XXX been first month. of On per quarter, end our aspect, process, changes There -- at capacity. master the the the the has

the been Last figure the So the of average XXX,XXX, per second at the expectation simple fourth the decline is was first the XXX,XXX. end XXX,XXX. half, of from a input fourth At end quarter, actuals, that year, months quarter, X XXX,XXX the earlier quarter the average there projection. be In was the has for month. will

is it and or fullest Fiscal the at for we have working models. it's planned. are we as again, assumed shipping 'XX, new So

we increasing it And are year accelerating average, fiscal be So or the as will first XXX,XXX, X-year -- X-month utilization. this projected. again, the for the we capacity quarter have

has the Compared trend. fiscal of affecting a So of this previous A XX%. customer aspect. quantitative certain more been to year, that's decline there a is Chinese

Sadahiko Hayakawa

Moving the from Nakane-san to next question. on please. Securities, Mizuho

Yasuo Nakane

Nakane speaking. I'm from Securities. Mizuho

been revised. one, two operating So Number income questions. have the

EP&S, revision. and Pictures so -- are those Music and the the factors one for there's So

factors roughly, upsides the electronics, very -- areas. quarter so destabilizing for some in So were also, and in -- first are some there are what there

are some factors could revision. that upward So have negative the there impacted

in? second can So were they your how in Totoki-san. categories, thoughts about with the view My the us semi in of macro X question, factored it's you share

So of games view market with how do in the do this the demand music? China, electronics, and until demand you I vary. How year? American think end or think this the the will North about you how sensors and and situation environment

segments, about towards have that X of the end environment my this the are to the please you questions. about Those all don't you anticipate but year. So macro talk talk

Hiroki Totoki

the for you Thank question.

first the made. have income question, operating the revision So we that of

markets. your much the the it how North year? of to how the guess X is it coming rest I question and broad situation? I very But and of quarter looking from coming economic related situation first is from do demand the much And in overall how second actually. at China, you're So question a America assess is these the

of the income, first for EP&S, speaking, Services, actuals some generally very the talk performance the first excluding strong. very was revision quarter the about basically, may the if strong. especially operating Financial other were quarter, in The regarding segments. So Well, I

up So expectations. that really the pushed

half, that second is not beyond the half, going it would grow the second to think if you So beyond of factor But maybe the TV, you that it's know much. going don't what resurgence the down know demand or and the on is supply don't also It's infection sales really chain. could impact happen, some what to of hard that COVID-XX, we have production, happen. And and to going anticipate. to we

in ad-supported favorable recovering. because was past, was well. it's services but was now Subscription is And factored had Music, for it was very ad making growing advertising in quarter, streaming very market very very COVID-XX. have the And streaming not the we The strong. and our But and in difficult the support we good, of So projections. those ones. first risks

reasonable was projection ad-supported streaming included the also So a in way. for

have we Now what on projections Pictures, know on a revision throughout year based made the now. based our for we

would to think I that be say. fair thing

very the the until market market actually the would is Chinese of North the and American demand Now what tough the be situation end year, a and regarding that question.

to do we be full favorable current So that this But ago. hand, if you be other address we and have COVID-XX, to hopefully will But look it's favorable, of we at difficult. resurgence I wish That's films there to situation, theatrical saw really believe condition of a the will The very impact what that months is the a theatrical the on and try now, going releases release X that. of is recovered. continue.

do children, to be say, I releases think of will would don't able very their or because families for we theatrical be theaters. reluctant well will pictures to people for to pictures, So take kids I

North America. such they are So in concerns

is restrictions impact, stepped is recently That concerning. in Chinese a that some is are companies, a on China, my of have that major is there for it relative up that in view. COVID-XX less in trend But and basis, more terms China, Now ongoing.

So you cannot economic economic things or assess from purely the standpoint.

look So these trends look to when the you or Chinese you. other you market. developments at at have Thank really

Sadahiko Hayakawa

please. SMBC Katsura-san, Nikko From Securities,

Ryosuke Katsura

you me? Can hear

Hiroki Totoki

you. Yes, we can hear

Ryosuke Katsura

question. One, to Two Chinese regulation maybe such the affected. restrictions the questions previous games, platforms somewhat The or impact related well, of direct on certain the mobile is me. of this segment regulations, is from platform the the is what's

regulation segment the That's in that on question. what China first business for or kind entertainment would have So business, of impact Sony? entertainment of entertainment

income. explained QX you segment. and upward an onwards. revision by And was in There ¥XX by operating situation Second, about billion the

the you the There think it reevaluating so? income was unchanged However, major the in the was What revised. to and is weaker. of and to of the Sony be -- sales the upwardly so unchanged What much when well, are FX, are case remains yen uncertainties operating points do Toyota, -- target hold reasons? are the I to to

Hiroki Totoki

Thank you questions. for your

about question regulations entertainment and to business. the kind First would platforms impact on of have Chinese our what the that

upwardly question, second revised we forecast. income under uncertain Your operating circumstances, the

what at are first market. depend not at the but regulation, we look question background? When heavily -- it as China It's China that market. the moment, So the we this picture. So a overall the is on about an that market,

the That's In that. of what about say terms can percentage sales, it's of limited. I

been However, these kind cyclically of far. regulations implemented has so

For example, past. China in and the restricted release film's the censorship in about China in issue have been

facts the come to in to actions we more need earliest grips sensitive try at have stage More take with China don't other we the options. to and be about situation our So response. us, in other that. ever, for than We than an

we it, make they we of look which Now the not it's investment, loss. management. incurring timing they at about on at risks investments level did with investment, an don't The -- or the the are impact any the when equity have participation having the -- of

would So we long-term are this to on a continue and basis, investing stance. for we the like partnership

the an and forecast them declined. time of income. Now the some operating or other this uncertain are and of Basically, increased revenues the is -- sales some categories of sales

just results, So quarter's to looking of me, it made first adjustments. matter After seems there's the a we adjustments. at it,

accumulation. a So this natural is

it. not this a and we you. So put it's overall into opportunities big into risks We forecast. to message come Thank picture, as take consideration our to that

Sadahiko Hayakawa

time The question question. interest Ono last one so the may have next will of last apologize, of time. you We ask the to limited, question question. Stanley. we will Mr. ask the And in I is only Morgan the to take but be

Masahiro Ono

Ono Stanley. of Morgan

said You question. one

XXX the active the million. monthly decline. overall you media when million. you In a context, he the that think, was that user, asked the is question. on believe the million, now figure it's used Mr. the seasonality Totoki-san And game, some look was said there monthly active and MAU, referred factor, How are situation also do figure members supplementary I about not in explained user, at I talked this it's XXX In Yoshida-san XXX Would million? you this quarter, the million, Now fourth the the number. impact information X.X But this Yoshida concerned. so X.X to And million? what XXX

Hiroki Totoki

We -- figure. we number, will This course, of you. XXX strong a strong don't not looking Thank think so. it's at declining a not it's as but are million, a trend?

last no significant will a to demand analyze and Maybe trend -- of I the to that different watch but first do that we capture. analysis. month, risk continue quarter say this a At year's, are such may the were as The month, have and to conspicuous there repetition, the we trying next demand could was elements, hindsight. we stay-at-home

a fiscal last that is increase. 'XX, there of year an trend, So to course, to as period compared compared

enhance upgrade we we and deepen monitor would So the platform. the the engagement situation will -- carefully, and

-- actions this will make Thank some coming this year, take business. support We we this to or Therefore, efforts. such you. will for fiscal

Sadahiko Hayakawa

We close you Thank you very to like session. to Sony. announcement The much. time participation. would has for the this earnings much close your Thank very for come