Q1 2025 Sony Group Corp Earnings Call

We are to the same quarter of the previous fiscal year, two two trillion if I've been to six to 7.4 billion in and operating income increased a significant 50.6 billion yen to $249 1 billion yen consolidated sales increased 2% year on year to three trillion 11.6 billion operating income increase.

$26 1 billion yen to $279 1 billion yen and the income our net income increased $14 1 billion yen to $231 6 billion in the results by segment for this quarter are shown on this slide.

Unknown Executive: The results by segment for this quarter are shown on this slide. Next, I will explain our consolidated revenue forecast for FY24. The consolidated sales forecast excluding financial services has been upwardly revised by 3% to 11,700,000,000 yen. The operating income forecast has been upwardly revised by 35,000,000,000 yen to 1,165,000,000 yen. And the net income forecast has been upwardly revised by 55,000,000,000 yen to 875,000,000,000 yen. However, our operating cash flow forecast remains unchanged from the previous forecast at 1,400,000,000.

Next I will explain our consolidated results forecast for FY 'twenty for the consolidated sales forecast, excluding financial services has been upwardly revised by 3% to 11 trillion. Several hundred billion yen. The operating income forecast has been upwardly revised by 35.

Billion yen to one trillion $1 65 billion yen and the net income forecast has been upwardly revised by 55 billion to 875 billion yen.

Our operating cash flow forecast remains unchanged from the previous forecast at one trillion 400 billion yen consolidate itself expected to increase 2% from the previous forecast to 12 trillion 610 billion yen operating income is expected to increase a 35 billion to one trillion 300.

Unknown Executive: Consolidated sales are expected to increase 2% from the previous forecast to 12,610,000,000, and operating income is expected to increase 35,000,000 to 1,310,000,000. And net income is expected to increase by 55,000,000 to 980,000,000. The net income forecast is 9.4 billion yen higher than that recorded in the previous fiscal year. Operating income on both a consolidated basis, including financial services, and on a consolidated basis is expected to be record highs. The full year forecast by segment is shown here. Now I will move on to the explanation of the overview of each business. The first is the GNNS segment.

10 billion and net income is expected to increase 55 billion to 980 billion yen.

The net income forecast is $9 4 billion higher than the recorded in the previous Ah the physical ear over the income on Bush on a consolidated basis, including financial services and the consolidated basis expect it to be record highs. The full ear forecast by segment is shown here.

Speaker Change: Now I will move on to the explanation of the overview of each business.

Unknown Executive: Although hardware sales decreased, FY24 Q1 sales increased a significant 12% year-on-year to 864.9 billion, primarily due to the impact of foreign exchange rates and increased first-party software sales. Operating income increased a significant 16 billion year-on-year to 65.2 billion, mainly due to the benefit of increased revenue from first-party software and network services, despite increased costs including expenses resulting from the restructuring we underto For FY24, we are now forecasting sales to be 4,320,000,000, an increase of 120 billion from the previous forecast, and operating income to be 320 billion, an increase of 10 billion.

Unknown Executive: At the first is the GNN segment; although hardware sales decreased FY24, Q1 sales increased a significant 12% year-on-year to 864.9 billion yen, primarily due to the impact of foreign exchange rates and increased first-party software sales. Operating income increased a significant 16 billion yen year-on-year. The 65.2 billion yen mainly due to the benefit of increased revenue from the first-party software and network services, despite increased cost including expenses resulting from the restructuring we undertook on a global basis.

Speaker Change: The first is the G and N as segment, although HUD, we ourselves decreased FY 'twenty for a Q1 sales increased a significant 12% year on year to $864 9 billion yen, primarily due to the impact of foreign exchange rates and increased first party software sales operating income increase.

Speaker Change: The significant 16 billion yen year on year to $6 $65 2 billion, mainly due to the benefit of increased revenue from the first party software and network services, despite increased costs, including expenses, resulting from the restructuring we undertook on a global basis for FY 'twenty four.

Unknown Executive: For FY24, we are now forecasting sales to be 4 trillion, 320 billion yen, an increase of 120 billion yen from the previous forecast, and offered income to be 320 billion yen, an increase of 10 billion yen. Despite not releasing any attend bulk titles, user engagement during the quarter remained high, driven primarily by expanding PlayStation 5 installed base and contributions from the solid franchise software titles. The number of monthly active users of PlayStation was 116 million accounts. The highest number ever recorded for June at 7% compared with the same months of the previous fiscal year, and total playtime also increased 8%.

Speaker Change: Sure Yeah, no forecasting sales to be fought really on 320 billion yen an increase of 120 billion from the previous forecast and operating income to be 320 billion yen an increase of 10 billion yen. Despite not releasing any of tent pole titles user engagement during the quarter remained high.

Unknown Executive: Despite not releasing any tentpole titles, user engagement during the quarter remained high, driven primarily by the expanding PlayStation 5 install base and contributions from solid franchise software titles. The number of monthly active users of PlayStation was 116 million accounts, the highest number ever recorded for June at 7% compared with the same month of the previous fiscal year, and total playtime also increased 8%. In terms of our software titles, Hail Divers 2 is performing better than our May forecast, and the PC version of Ghost of Tsushima and Destiny 2 expansion content, The Final Shape, are also contributing to earnings. This month, we plan to launch our live service game Concold, followed in September by Astro Bot and the PC version of our Smash hit title, God of War, Ragnarok.

Speaker Change: Primarily by expanding Playstation five installed base and good contributions from the solid franchise software titles.

Speaker Change: The number of monthly active users of Playstation Ah was 116 million accounts, the highest number ever recorded for June up 7% compared with the same months of the previous fiscal year and total playtime also increased 8%.

Unknown Executive: In terms of our software titles, Hyl Diverse 2 is performing better than our May forecast, and the PC version of Ghost of Tsushima and the Destiny 2 expansion content, The Final Shape, are also contributing to earnings. Under the new management structure, the platform business group is steadily maintaining and expanding the number of active users and using engagement as priority initiatives and intends to work to further strengthen the PS platform and establish a stable earning space. Additionally, the studio business group is strengthening its development schedule, the management and optimizing development projects in order to consistently and continuously release heat titles.

Speaker Change: In terms of our software titles.

Speaker Change: Hill diverged two is performing better than our may forecast and P. C version of Costar tissue MA and the distant two expansion content. The final shape are also contributing to earnings.

Speaker Change: This month, we plan to launch.

Speaker Change: Our live service games come Cold followed in September by Astra boat and the PC version of our Smash hit title God of War, Iraq not Roque.

Unknown Executive: As for the network services, U.S. dollar-based sales increased 13% year-on-year, driven mainly by a steady shift to premium services and an increase in IALPU, Average Revenue Per User, resulting from price revisions in PS+. Under the new management structure, the Platform Business Group is steadily maintaining and expanding the number of active users and user engagement as priority initiatives and intends to work to further strengthen the PS platform and establish a stable Additionally, the studio business group is strengthening its development schedule, its management, and optimizing development projects in order to consistently and continuously release hit titles. Next, the music segment.

Speaker Change: As for the network services U S. Dollar based sales increased 13% year on year, driven mainly by a steady shift the premium services and increase in I E. L. P. You average revenue per user resulting from price revisions in PS plus.

Speaker Change: Yeah.

Speaker Change: Under the new management structure the platform business group is steadily maintaining and expanding the number of active users and user engagement as priority initiatives and intends to work to further strengthen the P. S platform and establish a stable earnings space.

Speaker Change: Additionally, the studio business group is strengthening its development schedule are the management and optimizing development projects in order to consistently and continuously release hit titles.

Unknown Executive: Next, the music segment, FY24, Q1 sales increased as significant 23% air-on-air, the 442 billion yen, primarily due to the impact of foreign exchange rates as well as increased live box office revenue and the same revenue in recorded music. Operating income increased 12.5 billion yen air-on-air to 85.9 billion yen, mainly due to the benefit of increased sales and favored impact to foreign exchange rates. As six billion yen re-measurement, the gain resulted from the consultation of companies previously accounted for using the equity method was recorded during the Q1 of the previous fiscal year. On a new Estella basis, FY24, Q1 streaming revenue in the recorded music increased 5% and music publishing increased 20% air-on-air, 19% and 36% respectively on a yen basis.

Unknown Executive: FY24 Q1 sales increased a significant 23% year-on-year to 442 billion, primarily due to the impact of foreign exchange rates as well as increased live box office revenue and streaming revenue in recorded music. Operating income increased 12.5 billion year-on-year to 85.9 billion, mainly due to the benefit of increased sales and the favorable impact of foreign exchange rates. A 6 billion remeasurement gain resulting from the consultation of companies previously accounted for using the equity method was recorded during Q1 of the previous fiscal year.

Speaker Change: Next the music segment FY 'twenty for Q1 sales increased a significant 23% year on year to 442 billion yen, primarily due to the impact of foreign exchange rates as well as increased life, our box office revenue.

The streaming revenue in recorded music operating income increased $12 5 billion in year on year to $85 9 billion yen, mainly due to the benefit of the increased sales in February the impact of foreign exchange rate of 6 billion then remeasurement the gain result.

And from the consolidation of company previously accounted for using the equity method was recorded.

Speaker Change: During the Q1 of the previous fiscal year.

Unknown Executive: On a U.S. dollar basis, FY24 Q1 streaming revenue for recorded music increased 5% and music publishing increased 20% year-on-year, 19% and 36% respectively on a yen basis. For FY24, we expect sales to increase 50 billion yen from the previous forecast to 1,740,000,000,000 yen and operating income to increase 15,000,000,000,000 to 330,000,000,000,000 yen.

Speaker Change: U S dollar basis FY 'twenty for Q in streaming revenue in the recorded music increased 5% in the music publishing increased 20% year on year, 19% and 36% respectively on a yen basis.

Unknown Executive: For FY24, we expect sales to increase 50 billion yen from the previous forecast, to 1 trillion, 740 billion yen, and offer the income to increase 15 billion yen to 330 billion yen. Global market growth in calendar year 2023 was 10% higher in recorded music and 11% higher music publishing, both compared to the previous year. In the mid-day term, the market is expected to continue to grow at a mid to high single digit average annual growth rate, driven by increased ARPU, ARPU, and further growth in emerging markets. From early on, Sony Music Entertainment has been strategically focusing on capturing the expansion of the Indies market and building a robust ecosystem, as seen from the 100% consolidation of The Orchard in 2015 and the acquisition of AWOL in 2021.

Speaker Change: For FY 'twenty four we expect sales to increase 50 billion yen from the previous forecast of one trillion 740 billion in operating income to increase 15 billion yen to 330 billion yen.

Unknown Executive: Global market growth in calendar year 2023 was 10% higher in recorded music and 11% higher in music publishing, both compared to the previous year. In addition to an increase in the number of paying subscribers for streaming services and market expansion in emerging markets, recent price revisions by music distributors have led to market growth for the 9th consecutive year in recorded music and the 11th consecutive year in music publishing. In the mid-term, the market is expected to continue to grow at a mid to high single-digit average annual growth rate driven by increased ARPU and further growth in emerging markets.

Speaker Change: Global market grows in calendar year 2023, it was 10% higher in recorded music and 11% higher in music publishing both compared to the previous year.

Speaker Change: In addition to an increase in the number of paying subscribers for streaming services and market expansion in emerging markets recent price revision by music distributors have led to market growth for the ninth consecutive year in recorded music and the 11th consecutive year in music publishing.

Speaker Change: In the game to the market is expected to continue to grow at a mid to high single digit average annual growth rate driven by increased ARPA arpus and further growth in emerging markets.

Speaker Change: From early on as Sony Music Entertainment has been strategically focusing on capturing the expansion of the Indian market and building a robust ecosystem as seen from the 100% consolidation of the Orchard in 2015, and the acquisition of a well in <unk>.

Unknown Executive: From early on, Sony Music Entertainment has been strategically focusing on capturing the expansion of the independent market and building a robust ecosystem, as seen from the 100% consolidation of The Orchard in 2015 and the acquisition of AWOL in 2021. Through the Orchard's approximately 50 locations around the world, we are expanding our business in rapidly growing emerging markets by providing a wide range of services, such as digital music distribution and data analysis using the latest technology.

Speaker Change: 2021.

Unknown Executive: Through the orchard's approximately 15 locations around the world, we are expanding our business in rapidly growing emerging markets by providing a wide range of services such as digital music distribution and data analysis using the latest technology. By actively pursuing strategic investments in emerging markets, including the Brazilian label and some Libre and Remus Entertainment and the label of Latin Music Start, a superstar, Bad Bunny, to which the orchard has been providing services. We have established a strong presence in Latin America, India, Africa, and other markets around the world. This can be seen with the success of Sony Music Entertainment Japan and artists U.S.O.B.

Speaker Change:

Speaker Change: Through the arches, approximately 50 locations around the world, we are expanding our business in rapidly growing emerging markets, providing a wide range of services such as digital music distribution and they did that is if using the latest technology.

Unknown Executive: By actively pursuing strategic investments in emerging markets, including the Brazilian label Sam Livre and Rimas Entertainment, the label of Latin music superstar Bad Bunny, to which The Orchard has been providing services, we have established a strong presence in Latin America, India, Africa, and other markets around the world. As can be seen with the success of Sony Music Entertainment Japan's artist Yu Asobi in overseas markets, we have been able to create hits that transcend national and regional borders through the orchard. Next is the picture segment.

Speaker Change: By actively pursing strategic investments in emerging markets, including the busy and labels and some labor day and Remus Entertainment at the label of Latin music start a super start bed Buddy to which the origin has been providing services.

Speaker Change: We have established a strong presence in Latin America, India Africa, and other markets around the world.

Speaker Change: Yeah.

Speaker Change: This can be seen with the success of as Sony Music Entertainment, Japan is I guess U S. Obi in overseas markets, we have been able to create hits that Chad said that national original borders and through the orchards.

Unknown Executive: in overseas markets. We have been able to create hits that transcend national and regional borders through the orchards.

Unknown Executive: Next is the pictures segment. FY 24Q1 sales increased 5% year-on-year at 2,337.3 billion yen due to the impact of foreign exchange rates, despite a decrease in U.S. dollar-based sales, primarily resulting from a decrease in the number of television programs delivered and a decrease in the number of theatrical releases, operating income decrease 4.7 billion yen year-on-year at 211.3 billion yen, primarily due to the impact of the decrease in U.S. Dollar-based sales.

Speaker Change: Next is the pictures segment.

Unknown Executive: FY24-Q1 sales increased 5% year-on-year to 337.3 billion due to the impact of foreign exchange rates, despite a decrease in U.S. dollar-based sales, primarily resulting from a decrease in the number of television programs delivered and a decrease in the number of theatrical releases. Operating income decreased 4.7 billion year-on-year to 11.3 billion, primarily due to the impact of the decrease in U For FY24, we forecast sales to be 1,520,000,000 yen, an increase of 40,000,000,000 from the previous forecast, and operating income to be 125,000,000,000 yen, an increase of 5,000,000,000 yen.

Speaker Change: FY <unk> sales increased 5% year on year to 237.3 billion yen due to the impact of foreign exchange rates. Despite a decrease in U S. Dollar based sales, primarily resulting from a decrease in the number of TV programs delivered and a decrease in the number of theatrical releases.

Speaker Change: Operating income decreased $4 7 billion yen year on year to 11 3 billion yen, primarily due to the back of the degrees in U S dollar based sales.

Unknown Executive: For FY 24Q1, sales to be 1,520 billion yen, an increase of 40 billion from the previous forecast, and operating income to be 125 billion yen, an increase of 5 billion yen. In the first half of the calendar year 2024, theatrical box office revenue in the U.S. remained at a level approximately 20% lower than the previous year, primarily due to the impact of the strikes. However, from June onwards, the release of tenfold films from major studios, including ours, has increased, and we expect box office revenue to gradually improve. During the quarter, the sequel to our popular franchise Bad Boys: Ride or Die and the Garfield movie, which we distributed worldwide, have both been hits.

Speaker Change: For FY 'twenty four we forecast sales to be one Julien plus I did 20 billion yen an increase of 40 billion from the previous forecast and operating income to be 125 billion yen, an increase of 5 billion yen.

Unknown Executive: In the first half of the calendar year, 2024, theatrical box office revenue in the U.S. remained at a level approximately 20% lower than the previous year, primarily due to the impact of the strikes. However, from June onwards, the release of ten-fold films from major studios, including ours, has increased, and we expect box office revenue to gradually improve. During the quarter, the sequel to our popular franchise, Bad Boys Ride or Die, and the Garfield movie, which we distributed worldwide, have both been hits. It Ends With Us, a film adaptation of a best-selling novel, is scheduled to be released on August 9th.

Speaker Change: In the first half of the calendar year 'twenty 'twenty four theatrical box office revenue of the U S. We made at a level of approximately 20% lower than the previous year, primarily due to the impact of the strikes. However June onwards antibodies of Tentpole films, We're a major studios, including ours has increased and we.

Box office revenue to gradually improve during the quarter, we the sequel to a popular franchise bad boys ride or die and they're Garfield movie, which we distributed worldwide have both been hits.

Unknown Executive: It ends with us, a film adaptation of a best selling novel, is scheduled to be released on August 9. The trailer set a record of approximately 130 million views in the first 24 hours following its release, and we are hopeful that it will be an indicator of the success of our efforts to discover excellent original works and tell them into films. As for Crunchyroll, the number of paying subscribers exceeded 15 million in July. In order to capitalize on the rapid expansion of the anime market, we have signed a global distribution agreement with Amazon Prime Channels and after launching in the U.S.

Speaker Change: It ends with US a film adaptation of our best selling novel is scheduled to be released on August 9th the trailer set a record of approximately 138 million views in the first 24 hours. Following its release and we are hopeful that it will be an indicator of the six.

Unknown Executive: The trailer set a record of approximately 130 million views in the first 24 hours following its release, and we are hopeful that it will be an indicator of the success of our efforts to discover excellent original works and turn them into films. As for Crunchyroll, the number of paying subscribers exceeded 15 million in July. In order to capitalize on the rapid expansion of the anime market, we have signed a global distribution agreement with Amazon Prime Channels, and after launching in the U.S. and the U.K. in October last year, we began distribution via Amazon in Brazil, France, India, and other countries beginning in April this year.

Speaker Change: So if I ever discover excellent original works and to the edge of films and so Kochi rose another paying subscribers exceeded 15 million in July in order to capitalize on the rapid expansion of the antibody market. We have signed a global distribution agreement with Amazon Prime channels.

Speaker Change: After launching in the U S and the U K in October last year, we began distribution via Amazon in Brazil, France, India and other countries since April of this year.

Unknown Executive: and the UK in October last year, we began distribution via Amazon in Brazil, France, India, and other countries since April this year. In addition to further expand opportunities for engagement with anime fans, we've announced a plan to expand our e-commerce site, Kuchiro Store, which was previously only available in North America and Australia to 34 European countries. It has approximately 4 million enthusiastic loyalty members, over-indexing on younger demographics. By building upon Alamo's connections with this fan community, we look forward to creating synergies with our content IP, including not only movies, but also games, music, and anime.

Unknown Executive: In addition to further expanding opportunities for engagement with anime fans, we've announced our plan to expand our e-commerce site, Crunchyrolls, which was previously only available in North America and Australia to 34 European countries. On June 12th, Sony Pictures Entertainment completed its acquisition of Alamo Drafthouse Sima. Alamo operates 41 theaters across the U.S. where customers can enjoy a movie while dining. The company is a leader in the dine-in cinema industry and ranks 7th in North America in terms of box office share.

Speaker Change: In addition to further expand opportunities for engagement with antibody. It says we witnessed a plan.

Speaker Change: <unk> E Commerce site.

Speaker Change: <unk> Relistor, which was previously only available in North America, and Australia 234 European countries.

Speaker Change: Yeah.

Speaker Change: Do 12, Sony Pictures Entertainment completed its acquisition of Alamo Drafthouse cinema.

Speaker Change: Alamo upgrades 41 for theaters across the U S where customers can enjoy a movie want Daddy.

Yeah.

And the company as a leader in the diet is cinema industry and we're excited at North America, It's a box of a ship.

Unknown Executive: It has approximately 4 million enthusiastic loyalty members, focusing on younger demographics. By building upon Alamo's connections with this fan community, we look forward to creating synergies with our content IP, including not only movies but also games, music, and anime. We also look forward to opportunities for Alamo and Crunchyroll to collaborate. With this acquisition, SP established a new business division, Sony Pictures Experiences, and aims to further strengthen its efforts in the experiential live entertainment business. And next is the E, T, and F segment.

It has approximately 4 million enthusiastic loyalty members over indexing on yoga demographics by building upon all of us at connections with their spend can be a D. We look forward to creating synergies with our core did I'd be including not only movies, but also games music and anyway. We also look forward to opportunities for Alamo.

Unknown Executive: We also look forward to opportunities for Alamo and Kuchiro to collaborate.

Speaker Change: I think what you will to collaborate with this acquisition S. P established a new business division. So he pictures experiences and aims to further strengthen its efforts in the experiential life David business.

Unknown Executive: With this acquisition, SB established a new business division, Sunny Pictures, Experiences and aims to further strengthen its efforts in the experiential live entertainment business.

Unknown Executive: Next is the ET&F segment. Although television sales decreased, FY24Q1 sales increased 5% year near to 600.9 billion yen, mainly due to the impact of foreign exchange rates. On pay, the income increase, 8.4 billion yen year near to 64.1 billion, primarily due to the favorable impact of foreign exchange rates.

Speaker Change: And next is B E T in its segment.

Unknown Executive: Although television sales decreased, FY24Q1 sales increased 5% year-on-year to 600.9 billion yen, mainly due to the impact of foreign exchange rates. Operating income increased 8.4 billion yen year-on-year to 64.1 billion yen, primarily due to the favorable impact of foreign exchange rates. For FY24, we forecast sales to be 2,420,000,000,000, an increase of 50,000,000,000 from the previous forecast, and operating income to be 190,000,000, unchanged from the previous forecast. With regard to operating income, despite the favorable impact of foreign exchange rates, we are maintaining our previous forecast by incorporating the risk of the worsening market environment and the impact of rising logistics costs.

Speaker Change: So TV does decrease our FY 'twenty Q1 sales increased 5% year on year at two 600.9 billion, yet maybe due to the impact of foreign exchange rates I bet. It it can be Greece, eight Boyd 4 billion yen year on year at 264 point would be again, primarily due to the favorable impact.

Speaker Change: Foreign exchange rates.

Unknown Executive: For FY24Q1, we forecast sales to be 2,420 billion yen, an increase of 50 billion yen from the previous forecast, and operating income to be 190 billion yen unchanged from the previous forecast. With regard to operating income, despite the favorable impact of foreign exchange rates, we are maintaining our previous forecast by incorporating the risk of the worsening market environment and the impact of rising logistics cost. Looking at the market environment during this quarter, our key product categories in Japan, Europe, and North America trended according to expectations. While in China, the television market contracted significantly, and the digital camera market, including solutions, grew significantly.

For FY 'twenty before we've looked at this and to be two trillion 420 billion an increase of 50 billion yen had the previous forecasts and update you get to be 190 billion unchanged from the previous forecast with regard to operating income despite the favorable impact of foreign exchange rates, we are maintaining our previous forecast by incorporating.

Speaker Change: The risk of the worsening market environment and the impact of rising logistics cost looking at the market environment during the quarter.

Unknown Executive: Looking at the market environment during this quarter, our key product categories in Japan, Europe, and North America trended according to our expectations, while in China, the television market contracted significantly, and the digital camera market, including solutions, grew significantly. As for the television business, we were able to achieve highly resilient operations during the quarter by focusing on inventory control and cost-cutting initiatives. We will aim to continue to do so while also focusing on high-value added products such as the new Bravia 9 series, which we believe will further enrich the cinema viewing experience at home.

Speaker Change: Key product categories in Japan, Europe, and North America trade it accordingly, according to our expectations well in China, the TV market contracted.

Significantly in digital camera market, including solutions grew significantly.

Unknown Executive: As for the television business, we were able to achieve highly resilient operations during the quarter by focusing on inventory control and cost-cutting initiatives. We were able to continue to do so while also focusing on high-value added products such as the new Bravia 9 series, which we believe will further enrich the cinema viewing experience at home. As for the imaging business, which includes digital cameras, we tend to pay close attention to demand trends in China, where the market is growing rapidly. In preparation for possible future change in the business environment, we aim to focus on managing inventory and account receivable based on conservative demand forecasts, and thoroughly control cash flows.

Speaker Change: As for the TV business, we were able to achieve highly resilient operations during the quarter by focusing on inventory control and cost cutting initiatives. We will aim to continue to do so while also focusing on high value added products such as the new Ravi at night series, which we believe will further enrich that's it.

Speaker Change: I really expect experience at home.

Unknown Executive: As for the imaging business, which includes digital cameras, we intend to pay close attention to demand trends in China, where the market is growing rapidly, and aim to further expand profitability by further diversifying our creator audience, primarily through the launch of the new V-Log Cam product ZV-E10 Mark II. In addition, by emphasizing inventory control across the segment, we were able to further reduce inventory at the end of the quarter compared to the same quarter of the previous fiscal year, which is also contributing greatly to the stabilization of profitability in the business segment. In preparation for possible future changes in the business environment, we aim to focus on managing inventory and accounts receivable based on conservative demand forecasts and thoroughly control cash flows.

As for the imaging business, which includes digital cameras, we tend to pay close attention to demand trends in China, where the market is growing rapidly and aim to further expand profitability by further diversifying our creator audience, primarily to the launch of the new Vela Cabot product is dead a V E.

Speaker Change: Ted Mark too in addition by emphasizing inventory control across the segment, we were able to further reduce inventory at the end of the quarter compared to the ZIP code of the previous fiscal year, which is also contributing greatly to the stabilization of profitability in the business segment and preparation for possible future change in the business.

Speaker Change: We aim to focus our veggie imagery and it tells you receive a little based on conservative demand forecasts as it really could should cat control cash flows.

Unknown Executive: Next is the INSS segment. Physical 24Q1 cells increased significantly by 21% ear-on-ear to 353.5 billion yen. Mainly due to the impact of foreign exchange rates and increased sales of image sensors for mobile devices. Operating income increased significantly by 23.9 billion yen year-on-year to 36.6 billion yen. Mainly due to the favorable impact of foreign exchange rates and increased sales.

Speaker Change: Yeah.

Unknown Executive: Next is the INSS segment. Fiscal 24-Q1 sales increased significantly by 21% year-on-year to 353.5 billion yen, mainly due to the impact of foreign exchange rates and increased sales of image sensors for mobile devices. Operating income increased significantly by 23.9 billion yen year-on-year to 36.6 billion yen, mainly due to the favorable impact of foreign exchange rates and increased sales. For fiscal 24, we expect sales to increase 10 billion yen from the previous forecast to 1 trillion yen, or 850 billion yen.

Speaker Change: Next is our NSS segment.

Speaker Change: Fiscal 'twenty before Q1 sales increased significantly by 21% year on year to 353.5 billion yen.

Speaker Change: Mainly due to the impact of foreign exchange rates and increased sales of image sensors for mobile devices operating income increased significantly by $23 9 billion year on year on year to 36.6 billion yen, mainly due to the favorable impact of foreign exchange rates and increased sales for fiscal 'twenty four we expect.

Unknown Executive: For Physical 24, we expect sales to increase 10 billion from the previous forecast to 1 trillion 850 billion yen. We expect operating income to increase 5 billion yen from the previous forecast to 275 billion as the favorable impact of foreign exchange rates is partially offset by the impact of a significant decrease in demand for micro-oilets used in ARN VR. The global smartphone product market during the quarter continue to show a gradual but steady recovery, like in the previous quarter. In addition, the trend toward polarization of price ranges in the product market, particularly in China, continues.

Speaker Change: Sales to increase conversion you have from the previous forecast to one trillion 850 billion yen. We expect operating income to increase 5 billion from the previous forecast to 275 billion of the.

Unknown Executive: We expect operating income to increase 5 billion yen from the previous forecast to 275 billion yen, as the favorable impact of foreign exchange rates is partially offset by the impact of a significant decrease in demand for micro OLEDs used in AR and VR. The global smartphone product market during the quarter continued to show a gradual but steady recovery as in the previous quarter. In addition, the trend toward polarization of price ranges in the product market, particularly in China, continues.

Speaker Change: Favorable impact of foreign exchange rates, partially offset by the impact of a significant decrease in demand for micro OLED using AI and VR.

Speaker Change: For global smartphone product market during the quarter continued to show a gradual but steady recovery like in the previous quarter.

Speaker Change: <unk> returned toward polarization of price ranges in the product market, particularly in China continues.

Unknown Executive: This has accelerated the expansion of the high-end smartphone market, which has led to further progress of the expansion of the size of the sensors we ship. As such, the market environment is progressing generally in line with our previous forecast. From the second quarter onwards, we expect the trend toward larger sensors for ultra wide-angle and telephoto cameras to continue. We believe that this trend, together with improved sensor performance to improve camera video capabilities, will be medium-term growth drivers for the mobile sensor market. In terms of production, improvements in yields for mobile sensors are progressing as planned in May, and we aim to achieve a normal run rate during this fiscal year.

Unknown Executive: This has accelerated the expansion of the high-end smartphone market, which has led to further progress in the expansion of the size of the sensors we ship. As such, the market environment is progressing generally in line with our previous forecast. From the second quarter onwards, we expect the trend toward larger sensors for ultra-wide-angle and telephoto cameras to continue.

Speaker Change: It has accelerated the expression of the high end smartphone market, which has led to further progress. After your expansion of the size of the sensors we ship.

Speaker Change: As such the market environment is progressing generally in line with our previous forecast.

Speaker Change: From the second quarter onwards, we expect the trend toward larger sensor for ultra wide angle and telephoto cameras to continue we believe that this trend together with improved sensor performance to improve camera and video capabilities will be medium term growth drivers for the mobile sensor market.

Unknown Executive: We believe that this trend, together with improved sensor performance to improve camera video capabilities, will be medium-term growth drivers for the mobile sensor market. In terms of production, improvements in yields for mobile sensors are progressing as planned in May, and we aim to achieve a normal run rate during this fiscal year. Additionally, we will aim to make maximum use of existing production capacity and be selective in making new investments. Together with other development and operational efficiency measures, we intend to work to improve profitability, a key theme in this mid-range plan.

Speaker Change: In terms of production improvements in yields for mobile sensors are progressing as planned and merit and we aim to achieve a normal run rate during this fiscal year.

Unknown Executive: Additionally, we will aim to make maximum use of existing production capacity and be selective in making new investments. Together with other development and operational efficiency measures, we intend to work to improve profitability, a key theme of this mid-range plan.

Speaker Change: Additionally, we will aim to make maximum use of existing production capacity and be selective in making new investments together with other development and operational efficiency measures, we intend to work to improve profitability a key theme of this midrange plan.

Unknown Executive: Last is the financial services segment. The fiscal 24Q1 financial services revenue decreased significantly by 34 percent year-on-year to 448.6 billion yen, primarily due to the impact of market fluctuations at Sony Life. Operating income decreased significantly by 24.5 billion yen year-on-year to 30 billion yen compared to the same quarter of the previous fiscal year, which benefited from the recording of a gain on the sale of bonds at Sony Life. Insurance service results at Sony Life, which are the base load of prosperity for the business, continue their stable trend at 41.8 billion yen.

Unknown Executive: Last is the financial services segment. Fiscal 24 Q1 financial services revenue decreased significantly by 34% year-on-year to 448.6 billion yen, primarily due to the impact of market fluctuations at Sony Life. Operating income decreased significantly by 24.5 billion yen year-on-year to 30 billion yen compared to the same quarter of the previous fiscal year, which benefited from the recording of a gain.

Speaker Change: Next is the financial services segment.

Speaker Change: Critical country for Q1 financial services revenue decreased significantly by 34% year on year to 448.6 billion yen, primarily due to the impact of market fluctuations at Sony life.

Speaker Change: Operating income decreased significantly by $24 5 billion yen year on year to 30 billion yen compared to the same quarter of the previous fiscal year, which benefited from the recording of a gain on the sale of bonds at Sony life.

Unknown Executive: In addition, the financial services revenue decreased significantly due to the impact of market fluctuations at Sony Life. Insurance service results at Sony Life, which are the baseload of profitability for the business, continue their stable trend at 41.8 billion yen. The fiscal 24 forecast remains unchanged from the previous forecast with financial services revenue of 910 billion yen and operating income of 145 billion.

Speaker Change: Insurance service results of Sony Life, which are the base load of profitability before the business continue their stable trend at 41 8 billion yen.

Unknown Executive: This fiscal 24Q1 remains unchanged from the previous forecast, with financial services revenue of 910 billion yen and operating income of 145 billion. With regard to financial services revenue, gains from the separate accounts of Sony Life exceeded our May forecast due to the impact of market fluctuations. However, taking into account factors such as uncertainty about market fluctuations, we are maintaining our previous forecast.

Speaker Change: 24 forecast remains unchanged from the previous forecast with financial services revenue of 910 billion yen and operating income of 145 billion with regard to financial services revenue gains from the separate accounts as Sony life exceeded our forecast due to the impact of market fluctuations.

Unknown Executive: With regard to financial services revenue, gains from the separate accounts at Sony Life exceeded our May forecast due to the impact of market fluctuations. However, taking into account factors such as uncertainty about market fluctuations, we are maintaining our previous forecast. Now we will discuss the opportunities and challenges for growing our life insurance business. Sales of insurance products at Sony Life have grown significantly over the last five years. In terms of sales channels, the agency channel has grown significantly in addition to our mainstay life planner channel.

Speaker Change: However, taking into account factors such as uncertainty about market fluctuations, we are maintaining our previous forecast.

Unknown Executive: Now, we will discuss the opportunities and challenges for growing our life insurance business. Sales of insurance products at Sony Life have grown significantly over the last five years. In terms of sales channels, the agency channel has grown significantly in addition to our mainstay life planner channel, and in terms of customers, our business with corporate customers has grown significantly in addition to our traditional strengths in individual customers. The new policy amount for the agency channel and with corporate customers in fiscal 23 grew 2.3 times and 3.7 times, respectively, compared to fiscal 2019. Due to this growth, Sony Life's share of new policy amount in fiscal 23 reached 16 percent, continuing to rank first in the industry for two consecutive years.

Unknown Executive: And in terms of customers, our business with corporate customers has grown significantly in addition to our traditional strength in individual customers. The new policy amount for the agency channel and with corporate customers in Fiscal 23 grew 2.3 times and 3.7 times, respectively, compared to Fiscal 2019. Due to this growth, Sony Life's share of new policy amounts in Fiscal 23 reached 16%, continuing to rank first in the industry for two consecutive years.

Speaker Change: Now, we will discuss the opportunities and challenges for growing our life insurance business.

Speaker Change: Sales from insurance products at Sony life have grown significantly over the last five years.

Speaker Change: In terms of sales channels. The agency channel has grown significantly in addition to our mainstay life planner channel and in terms of customers our business with corporate customers have grown significantly in addition to our traditional strengths and individual customers the new policy amount for the agency.

Speaker Change: Hello.

And with corporate customers in fiscal 'twenty three grew two three times and 3.7 times, respectively compared to fiscal 2019 due to this growth Sony life's share of new policy amount in fiscal 'twenty three reached 16% continuing to rank first in the industry.

Speaker Change: <unk> for two consecutive years.

Unknown Executive: Even though Japan's population is declining, we have continued to increase our sales of insurance products by expanding our share, and we believe that we have ample opportunities for growth going forward. On the other hand, we believe that there is an issue with how easily our business performance and financial soundness are affected by market fluctuations factors, particularly interest rates. Regarding new policies currently being sold, we have already reduced the sales ratio of so-called high capital load products, such as whole life insurance, and we are also preparing to further enhance hedging against market fluctuation risks. Regarding our efforts to address financial issues, including existing contracts, we plan to present our progress to date and future initiatives at the second quarter earnings announcement.

Unknown Executive: Even though Japan's population is declining, we have continued to increase our sales of insurance products by expanding our share, and we believe that we have ample opportunities for growth going forward. On the other hand, we believe that there is an issue with how easily our business performance and financial soundness are affected by market fluctuation factors, particularly interest rates. Regarding new policies currently being sold, we have already reduced the sales ratio of so-called high capital load products such as whole life insurance, and we are also preparing to further enhance hedging against market fluctuation risk.

Speaker Change: Even though Japan's population is declining we have continued to increase our sales of insurance products by expanding our share and we believe that we have ample opportunities for growth going forward.

Speaker Change: Okay.

Speaker Change: On the other hand, we believe that there is an issue with how easily our business performance and financial soundness are affected by market fluctuation factors, particularly interest rates.

Speaker Change: Regarding new policies currently being sold we have already reduced the sales ratio of so called high capital loan products, such as whole life insurance and we are also preparing to further and have hedging against market fluctuation risks.

Unknown Executive: Regarding our efforts to address financial issues, including existing contracts, we plan to present our progress to date and future initiatives at the second quarter earnings announcement. In the financial services segment, at the business segment meeting we held in May, we set adjusted net income of 120 billion yen as a key performance indicator for the fiscal year ending March 31, 2027.

Speaker Change: Regarding our airports to address financial issues, including existing contracts, we plan to present, our progress to date and future initiatives at the second quarter earnings announcements.

Unknown Executive: In the financial services segment at the business segment meeting we held in May, we set adjusted net income of 120 billion yen as a key performance indicator for the fiscal year ending March 31, 2027. As a result from this quarter, we have begun disclosing adjusted net income, the details of the adjustments, and other metrics.

Speaker Change: In the financial services segment at the business segment and you can be held in May We said adjusted net income of 120 billion yen as a key performance indicator for the fiscal year ending March 31, 2027 of the results from this quarter.

Unknown Executive: As a result, from this quarter onwards, we have begun disclosing adjusted net income, the details of the adjustments, and other metrics. Finally, I would like to give you a general summary. As I mentioned a bit at the beginning, looking for there is uncertainty or instability in the market, making it more difficult to forecast future performance. But we have this fifth MRP, and we have a strategy to enhance our resilience to changes in the environment, and we recognize that we've entered a period in which the real value of that strategy is being called into question.

Speaker Change: We have begun disclosing adjusted net income the details of the adjustments and other metrics.

Unknown Executive: Finally, I would like to give you a general summary. As I mentioned a bit at the beginning, looking whether it's uncertainty or instability of the market, making it more difficult to forecast the future performance. But we have this fifth MRP, and we have a strategy to enhance our resilience to changes in the environment. And we recognize that we've entered in the period in which the real value of that strategy is being called into question. So, in terms of our business portfolio, our entertainment area is the biggest; relatively speaking, impact of macroeconomics is not so large, it's not so direct, but we have to think about various risks and carefully conduct our business.

Speaker Change: Finally.

Speaker Change: I would like to give you a general summary.

Speaker Change: As I mentioned I've been at the beginning.

Speaker Change: Looking where there is uncertainty or instability of the market.

Speaker Change: Making it more difficult to forecast the future performance, but do we have this fifth MRP.

Speaker Change: And Oh.

Speaker Change: Have a strategy to enhance our resilience to changes in the environment.

Speaker Change: And though we recognize that we've entered in the period in which the real value of that strategy is being called into question.

Unknown Executive: So in terms of our business portfolio, our entertainment area is the biggest. Relatively speaking, the impact of macroeconomics is not so large, it's not so direct, but we have to think about the various risks and carefully conduct our business, so there is no change in that thinking.

Speaker Change: So in terms of our business portfolio, our entertainment area is the biggest.

Speaker Change: Relatively speaking.

Speaker Change: Impact of macroeconomics.

Speaker Change:

Speaker Change: He is not so large it's not for direct but.

Speaker Change: We have to think about the various risks and a carefully conduct our business. So no change in that thinking.

Unknown Executive: So no change in that thinking.

Unknown Executive: The key performance indicators for the entire group laid out in the midrange plan include a 10% or higher growth rate of operating income and a 10% or higher 3-year cumulative operating income margin on a consolidated basis, excluding financial services. Our Q1 results represent steady progress toward that goal that we can save. We plan to make every effort to maintain these targets and our goal of strengthening shareholder returns, and we intend to regularly provide updates on our progress.

Unknown Executive: The key performance indicators for the entire group laid out in our mid-range plan include a 10% or higher growth rate of operating income and a 10% or higher three-year cumulative operating income margin on a consolidated basis, excluding financial services. Our Q1 results represent steady progress toward that goal. That we can say

Speaker Change: The key performance indicators for the entire group laid out in our midrange plan include a 10% or higher growth rate of operating income and a 10% or higher three year cumulative operating income margin on a consolidated basis, excluding financial services.

Speaker Change: Our Q1 results represent steady progress toward that goal that we can serve.

Unknown Executive: We plan to make every effort to maintain these targets and our goal of strengthening shareholder returns, and we intend to regularly provide updates on our progress. That's all for my presentation.

We plan to make.

Speaker Change: Every effort to maintain these targets and our goal of strengthening shareholder returns.

Speaker Change: And we intend to regularly provide updates on our progress that's all for my presentation.

Unknown Executive: That's all from my presentation. So those are the presentations by Tudokin Matsuo-Kohayaka and Yamada.

Speaker Change: Yeah.

Unknown Executive: So those are the presentations by Totoki, Matsuoka, Hayakawa, and Yamada. Then, starting at 4.27, we'll have a Q&A session with the media. From around 6.50, we'll have a Q&A with investors and analysts. We'll take approximately 20 minutes for each of those Q&A sessions. Those who have pre-registered to ask questions should connect to the phone number provided. And please read the materials provided for how to ask questions. Now, please wait until we are ready to resume.

Speaker Change: So those are the presentations by Toyota Matsuoka, HEICO and Yamana.

Unknown Executive: From 427, we'll have a Q&A session with the media.

Speaker Change: From 427 will have a Q&A session with the media from around 650.

Unknown Executive: From around 650, we'll have QA with investors and analysts. We'll take approximately 20 minutes for each of those QA sessions. Those who have preregistered to ask questions, please connect to the phone number provided. And please read the material provided for how to ask questions.

Speaker Change: We will have to worry with investors and analysts.

Speaker Change: We'll take approximately 20 minutes for each of those Q&A sessions, those who have preregister to ask questions. Please.

Speaker Change: Please connect to the phone number provided.

Speaker Change: And please read the material provided for how to ask questions.

Unknown Executive: Now, please wait until we are ready to resume. Thank you very much for waiting.

Speaker Change: Now please wait until we are ready to resume.

Unknown Executive: Thank you very much for waiting. So now we'd like to answer the questions from the media. Those who answer the questions are the same as the speakers that made a presentation previously. So now we would like to begin our question and answer session. Please limit your questions to two.

Speaker Change: Thank you very much for waiting so now.

Unknown Executive: So now we'd like to answer the questions from media. Those who answer the questions are the same as the speakers that I made a presentation previously.

Speaker Change: We'd like to answer the questions from media.

Speaker Change: Those who answered the questions are the same as are the best because that I made a presentation previously.

Unknown Executive: So now we'd like to begin a question and answer session. Please limit your question to two. In those questions, please press that's the risk and then press number one.

Unknown Executive: And those with questions, please press the asterisk and then press number one. So the first question is from Toyo, the Securities, Umegaki-san. Umegaki-san, please. Tsu Megaki from Toyo.

Speaker Change: So now we've elected begin question and answer session.

Speaker Change: Please limit your questions to two.

Speaker Change: And those with questions. Please press about the risks and then press are number one.

Hayato Umegaki: So the first question is from Toyo, the securities. Umegaki-san, Umegaki-san, please. So Umegaki from Toyo, okay, size. Thank you. And I have a question about GNNS. For you, conducted the restructuring exercise. And for Studio, this group of Toyo, for instance, management of the development project that sit left over the last three months. And going forward, now is in August within the fiscal year. What kind of the structural the restructuring you are going to conduct? What is your plan for that? Thank you for your question. So, at this moment, Banji restructuring has been already announced, and at this moment, as you correctly pointed out, for this restructuring, the purpose is to cost the structure and portfolio optimization; those are the purposes.

Speaker Change: Yes.

Speaker Change: So the first question is from Tokyo are the secret dish Omega sung.

Sam: Sam please.

Unknown Executive: Okay, Sai, thank you. And I have a question about G and NS. For you, conducted the restructuring, the exercise, and for Studio, the business group, for you, for instance, management of the development project, et cetera, for over the last three months, and going forward, now that it is August, within this fiscal year, what kind of structural and organizational restructuring are you going to conduct? What is your plan for that? Thank you for your question.

Speaker Change: So maybe I'll give them until your okay. So I think you and I have a question about the G and N S.

Sam: Yeah.

Speaker Change: For you conducted the the restructuring exercise.

Speaker Change: So studio that business group of what you've learned since management of the development project that set level over the last three months and going the Ford and now is in August within this fiscal year, what kind of the structural are the restructuring are you are going to conduct what is your plan.

Speaker Change: For that thank you for your question.

Speaker Change: So at this moment bungie.

Unknown Executive: So at this moment, Bungie... restructuring has already been announced. And at this moment, as you correctly pointed out, for this restructuring, the purpose is cost, structure, and portfolio optimization. Those are the purposes. And simultaneously, we have to enhance the efficiency of the business. So back office functions should be integrated with the studio of SIE, so Bungie itself, as it is considered, Destiny 2, and the new live service Marathon, title Marathon, the headcounts and also resources will be concentrated there, so high quality and wonderful games and game experiences should be developed, so we would like to concentrate resources there and functions other than that.

Speaker Change: Our restructuring.

Speaker Change: It has been already announced.

Speaker Change: And at this moment as you correctly pointed out although this restructuring the purpose is cost that structure and portfolio optimization. Those are the purposes and simultaneously we have to enhance the efficiency of the business. So back office functions are there.

Hayato Umegaki: And simultaneously we have to enhance the efficiency of the business. So, back office functions, the should be integrated with the studio of SIE. So, the Banji itself, as it is considered, destiny too, and new live service, Marathon, title, Marathon, the headcounts and also resource will be concentrated there. So, high quality and wonderful games, game experiences should be developed. So, we would like to concentrate resources there. And functions other than that and other types of development, the title development, that will be transferred to the PlayStation, the PS, the studio group. And so, there will be some reallocation of the resources.

Speaker Change: Should be into.

Speaker Change: Integrated with the studio of S. A I E and so the bunge itself as it is considered a best it too and new live service Marathon title Marathon are the head counts and also resource will be concentrated there so high quality.

Speaker Change: <unk> and wonderful games game experiences and shouldn't be developed and so people like the constant concentrate resources, there and function to other than that.

And.

Unknown Executive: Other types of development, title development, that will be transferred to PlayStation, the PS, the studio group. And so there will be some reallocation of the resources. So, in any case. The organizational structure will be changed, and so we'd like to optimize our overall studio structure. That's all. Thank you.

Speaker Change: Other types of development are the title development.

Speaker Change: There will be transferred to the Playstation are the that's the P. S. At the studio a group and so there will be some reallocation of resources. So in any case.

Hayato Umegaki: So, in any case, the organizational structure will be changed. And so, we would like to optimize overall studio structure. That's all.

Speaker Change: The organizational structure will be changed and so we'd like to optimize overall studio structure.

Speaker Change: That's all thank you.

Hayato Umegaki: Thank you.

Speaker Change: Okay.

Unknown Executive: The next question.

Speaker Change: The next question.

Speaker Change: Nikkei.

Unknown Executive: Nikke, settle some, please. This is settle from Nikke. Have two questions. Thank you. First, about the IT strategy in general. Paramount's acquisition. Why do you not submit another proposal? And the entertainment IT sector, what size of investment are you planning for? And of the operating income, how much of the proportion will the IP hold? What is your final vision? And the second is about the global economy. Well, there's a slowdown, and also we see a division of the US and China. How do you see this? And what are the measures you have in place to address this?

Unknown Executive: Seto-san, please. This is Sato from Nikkei. I have two questions. Thank you.

Sato San: Sato San please.

Sato San: Yeah.

Sato San: This is sad over let me can I have two questions. Thank you first.

Unknown Executive: First, about the IT strategy in general. Paramount Acquisition. Why do you not submit another proposal? The entertainment IT sector, what sort of size of investment are you planning for? I'll be operating... Income, how much of the proportion will the IP hold? What is your final vision? And the second is about the global economy. Well, there's a slowdown, and also we see a division between the US and China. How do you see this? Do you agree?

Speaker Change: About the I T strategy in general.

Speaker Change: Paramount's acquisition.

Speaker Change: And why do not submit another proposal.

Speaker Change: And.

Speaker Change: The entertainment sector, what sort of size of investment are you planning for that.

Speaker Change: Yes.

Speaker Change: And.

Speaker Change: And the outraging.

Speaker Change: Income how much of the proportion will be I'd be hold what is your final vision and the second is.

Speaker Change: About the global economy.

Speaker Change: Well, there's a slowdown and so are we a see a division of the U S and China, how do you see this and what are the measures you have in place to address this and what I expect is it's always the next president of administration of the U S and what concerns you have about the I B strategy.

Unknown Executive: And what other measures do you have in place to address this? And what are your expectations for the next president or administration of the US? And what concern do you have? Well, about the IP strategy, well, in general, I believe that your question was asking about the general strategy. But the reason why I did not propose again a proposal to acquire Paramount, well, we believe that at this point in time, the acquisition of Paramount does not fit well with our strategy. That is the judgment that we have handed down.

Unknown Executive: And what I expected towards the next president, our administration of the US and what concern do you have? Well, about the IP strategy in general. I believe that your question was asking about the general strategy. But as the reason why I do not propose again a proposal to acquire Paramount, well, we believe that at this point in time, Paramount acquisition does not fit well with our strategy. And that is the judgment that we have handed down. And the proportion of IP earnings within our operating income is difficult. But the entertainment business in somewhere other, IP is related.

Speaker Change: Well in general I believe that your question was asking about the general strategy about as are the reason why I do not propose again that proposal to acquire Paramount well, we believe that at this point in time Paramount acquisition well.

Speaker Change: Well.

Speaker Change: It does not fit well with our strategy and that is a judgment that we have handed down and the proportion of I P earnings within our operating income is difficult, but the entertainment business is somewhere either IP is related and there's a.

Unknown Executive: And the proportion of IP earnings within our operating income is difficult, but the entertainment business is, or other IP is related to it. And so IP is at the core based on which we carry out our business and generate revenue. And therefore, the proportion or the targeted proportion of IP earnings is difficult for me to say. So, on entertainment as a whole, we would like to focus on strengthening IP. This remains unchanged.

Unknown Executive: And so IP is at the core, based on which we carry out a business and generate a revenue. And therefore, the proportion or the targeted proportion of IP earnings is difficult for me to say. So our entertainment on the whole, we would like to focus on strengthening the IP. This remains unchanged. But do we have a target? Well, we, as much as possible, want to grow the business and therefore consult a basis with our MRP. It was C-A-G-R. The operating income was 10% and also the profit margin 10%. We have this target, so we would like to put in different measures to achieve these goals.

Speaker Change: <unk> B is at the core a base on which we can at our business and generate revenue and therefore.

Speaker Change: Stay propulsion or the targeted but bush of I P earnings is difficult for me to say so of entertainment on the whole we've aligned to focus those J D. I B and this remains unchanged.

Speaker Change: But do we have a target well.

Unknown Executive: But do we have a target? Well, we want to grow the business as much as possible and, therefore, consult databases with our MRP. It was CAGR, the operating income at 10%, and also the profit margin at 10%. We have this target, so we would like to put in place different measures to achieve these goals. And on the global economy. Well, currently, the global economy itself is led and driven by the U.S., especially consumption in the United States, and in our business, what we must focus on is the economy and consumption in the United States. Currently, we see that there are some signals indicating an economic slowdown as a macroeconomic numbers figure.

Speaker Change: We as much as possible I want to grow the business and never goes all databases with M. R. P. M. A C E G. I am the abating, he got mad, 10% edge or are they above it margin, 10% and we have this target. So we would like to put in different measures to achieve these goals.

Unknown Executive: And about the global economy. Well, currently, the global economy itself is led driven by the US, especially the consumption of the United States. And in our business, what we must focus on is this economy and consumption in the United States. And currently, we see that there are some signals indicating an economic slowdown. And as a macroeconomics and numbers figures, we do see that signal. But how deep this will be, how long will continue, is very difficult for us to foresee. But there are a set signals. And therefore, we must watch closely the developments. And about the expectations towards the next US administration, Sony at any rate, want to respect the choice of the American people.

Speaker Change: And about the global economy.

Speaker Change: Well currently I'm the global economy itself.

Speaker Change: S is allege that driven by the U S, especially the cos substrate in the United States and Oh. This is what we must focus on is these S economy and consumption in the United States and currently.

Unknown Executive: We do see that signal, but how deep this will be, how long it will continue, is very difficult for us to foresee. But there are such signals, and therefore we must watch closely the developments and expectations toward the next U.S. administration. Well, Sony, at any rate, wants to respect the choice of the American people, and what changes will result as a result of the election is something that we will keep an eye on. That is all. Thank you.

Speaker Change: And we see that there is some signals, indicating a economic slowdown.

Speaker Change: The macroeconomics are numbers figures, we do see that signal, but how deep this there'll be how long it will continue its very difficult for us to foresee.

Speaker Change: And but there are some signals and therefore, we must watch closely are the developers and.

Speaker Change: But the expectations towards the next U S administration Sunny at any rate what do expect the choice of the American people.

Unknown Executive: And what changes would result as a result of the election is something that we will keep an eye on.

Speaker Change: And what changes would result, as a result of the election is something that we will keep an eye on that as a thank you.

Unknown Executive: That is all. Thank you.

Unknown Executive: Next question.

Unknown Executive: Next question. Nikkei BB, Iwata-san, please. Iwato from Nikkei Business, Questions about Crunchyroll. So, it surpassed 15 million, you said? So I think that is good news.

Speaker Change: Next question.

Speaker Change: Okay BP you at the phone please.

Unknown Executive: Niki Bibi, Iwato-fan, please. Iwato from Niki business. Two questions. About control. So about 15 million, you said. So I think that it is good news. That kind of momentum, do you think will continue for the time being? So what's the current situation and what's the future growth prospect? And in the presentation, you talked about enhancing resilience. So that's the strategy of the MRP. And you said that the true value of that is being put into question. So it's a higher uncertainty. And in trying to enhance resilience, what will be the most important factor, you think?

Speaker Change: Yeah.

Speaker Change: You might go from with your business too.

Speaker Change: Two questions.

Speaker Change: Okay.

Speaker Change: About control.

Speaker Change: So for about 15 million you said.

Speaker Change: Yeah.

Speaker Change: So I think that is a good news that kind of momentum do you think will continue for the time being so what's the current situation and what's the future growth prospects.

Unknown Executive: That kind of momentum do you think will continue for the time being? So what's the current situation, and what's the future growth prospect? in the presentation.

Speaker Change: And.

Speaker Change: In the presentation.

Unknown Executive: He talked about enhancing resilience. So that's the strategy of the MRP, and you said that the true value of that is being put into question. So with the higher uncertainty, in trying to enhance resilience, what will be the most important factor, you think? Thank you for the questions. First, about Crunchyroll's current situation and our expectations. Matsuoka will respond to that question. Matsuoka-san, please.

Speaker Change: You talked about the housing resilience. So that's the strategy of the MRP and you said that the true value of that is being put into question.

Speaker Change: The higher uncertainty.

Speaker Change: And trying to enhance the resilience what will be the most important factor you think.

Unknown Executive: Thank you for the questions. First about crunch your role, current situation, and our expectations. Masoka, I will respond to that question. Masoka, some please. Thank you. For crunch your role. Earlier, we talked about that. So 15, we exceeded 15 million in July. And so we have great works like Akimetsu, Yaiiba, Kaiji Hachigo, Boku Nohiro, all of these works contributing. And as was mentioned, we are using Amazon Prime and platforms. So we have the partnerships with them that's contributing to the increased subscribers. And also we're contributing through theaters. And that is also going well. Animei creators in Japan, we have strong partnerships with them and capitalizing on that.

Speaker Change: Thank you for the questions.

Unknown Executive: Thank you, for Crunchyroll, earlier we talked about that. So, we exceeded 15 million in July, and so we have great works like Kimetsu no Yaiba, Kaiju-85, and Boku no Hero. All of these works are contributing, and as mentioned, we are using Amazon Prime and platforms, so we have partnerships with them that are contributing to the increased subscribers, and also, we're distributing through theaters, and that is also going well. So anime creators in Japan, we have strong partnerships with them, and capitalizing on that, we are expanding our content.

Speaker Change: First about the control.

Speaker Change: Current situation.

Speaker Change: And our expectations.

Speaker Change: Matsuoka will respond to that question once or someplace.

Speaker Change: <unk>.

Speaker Change: Full crunchy role.

Speaker Change: Yeah.

Speaker Change: Earlier, where you talked about that so 15.

Speaker Change: Seeded 15 million in July.

Speaker Change: And so we have great works.

Tim: Tim It's Mike.

Jacek: Okay, Jacek open Brooklyn, a hero.

Speaker Change: All of these are works are contributing and wasn't as was mentioned are indeed, oh, we are using Amazon prime and platforms. So we have the partnerships with them that is contributing to the increase subscribers and also we're distributing.

Speaker Change: Theaters and that is also going well.

Speaker Change: So honeymoon creators in Japan, we have strong partnerships with them and capitalizing on that.

Unknown Executive: We are expanding our contents. In terms of price, we are providing at an attractive price level, a very valuable service. And so we have established other advantageous position and overseas. We are trying to cultivate a great IP, and we have a co-production with Japanese animators and creators. And so in Europe, Latin America, India, Southeast Asia. So we're expanding and working on multiple languages. We'll focus on that. And so that's one initiative. And also for the expansion of the partnerships that I mentioned earlier, that will be in Europe. It will be the hardest to try to increase numbers of subscribers.

Speaker Change: We are expanding our contents.

Unknown Executive: In terms of price, we are providing an attractive price level for a very valuable service, and so we have established a very advantageous position, and overseas. We are trying to cultivate great IP, and we have co-production with Japanese animators and creators, and so in Europe, Latin America, India, Southeast Asia, we'll be expanding and working on multiple languages.

Speaker Change: In terms of price.

Speaker Change: We are providing at an attractive price level.

Speaker Change: Very how valuable our service and Oh, sorry, we have established a very advantageous position.

Speaker Change: And overseas.

We are all trying to cultivate the great IP and we have a co production with Japanese animators unquote creators.

Speaker Change: And so in Europe, Latin America, India, South East Asia.

Speaker Change: Oh, so globally, expanding and working on multiple languages will focus on that and so that's one initiative and also.

Unknown Executive: We'll focus on that. And also, for the expansion of the partnerships that I mentioned earlier, that will be harnessed to try to increase the number of subscribers. To respond to the second question, how to strengthen resilience, because uncertainty is rising, what's the most important to enhance resilience? The question. In the short term... financially, inventory control, cash flow control, those things.

Speaker Change: For the expression of the partnerships that I mentioned earlier that the will be harnessed to try to increase.

Speaker Change: Number of subscribers.

Unknown Executive: To respond to the second question, how to strengthen the resilience. So uncertainty is rising. What's the most important to enhance resilience? What's the question? In the short term, financially, the inventory control, cash flow control, those things, what we can do with finance, we certainly will do. And I personally, what I think is most essentially important is diversity of people. We have diverse operations, and that's one reason we need diverse people. But with diverse people, you have diverse ideas being generated. And we will not be focused on just one idea. We will have the power to generate new ideas, and we'll be able to analyze from various angles.

Speaker Change: To respond to the second question is how to strengthen the resilience. So uncertainty is a rising.

Speaker Change: Rising what's the most important to enhance resilience for the question.

Speaker Change: In the short term.

Speaker Change: Financially.

Speaker Change: Inventory control cash flow control.

Speaker Change: Those things.

Speaker Change: What we can do with finance, we certainly will do.

Unknown Executive: What we can do with finance, we certainly will do, and personally, what I think is most essential is diversity of people. We have diverse operations, and that's one reason we need diverse people. But with diverse people, you have diverse ideas being generated, and we will not be focused on just one idea. We will have the power to generate new ideas, and we'll be able to analyze them from various angles, so we can have that kind of synergy effect. It's difficult, of course, to manage diversity, but I personally would like to promote the diversity of our people. So we'd like to move on...

Speaker Change: And I personally what I think is most essentially important there is a diversity of people.

Speaker Change: We have a diverse operations and.

Speaker Change: That's one reason we need to divert people, but there was a diverse people you have diverse ideas being generated.

Speaker Change: We will not be focused on just one idea we will have the power to generate new ideas and they will be able to analyze from various angles. So we can have that I'm kind of a synergy effect, it's difficult of course manage diversity, but I personally would like to have.

Unknown Executive: So we can have that kind of synergy effect. It's difficult, of course, to manage diversity. But I personally would like to pursue the diversity of our people.

Speaker Change: Pursue or the diversity of our people.

Unknown Executive: So we'd like to move on to the next question.

Speaker Change: So we'd like to move onto the next question.

Unknown Executive: Shall we like to move on to the next question? Tanaka-san from Asahi Shimbun, please. Tanaka-san, can you hear me? Can you hear me? This is Tanaka speaking from Asahi Shimbun. Can you hear me? Yes, we can hear you.

Unknown Executive: Tanaka-san from Asahi Shimbun, please. Tanaka-san, can you hear me? Can you hear me? This is Tanaka speaking from Asahi Shimbun. Can you hear me? Yes, we can hear you. So thank you for the opportunity. This is Tanaka from Asahi Shimbun. In connection to the previous question regarding Paramount, I have an additional question. As Sony's strategy, what is the place, what is the point, which is unfitted to your, this is acquisition case. For each individual, the project is very difficult for me to answer the question. However, as I have mentioned so far, on our part about high quality, quality IP, and we have been focusing on the asset.

Speaker Change: Tanaka sound from Asahi Shimbun. Please.

Speaker Change: Seneca Sean can you hear me.

Yes.

Speaker Change: Again this is Tanaka speaking for him I said, Hey Shimbun.

Speaker Change: Can you hear me, yes, we can hear you.

Speaker Change: So thank you for the opportunity. This is tanaka from us of his shimbun.

Unknown Executive: So, thank you for the opportunity. This is Tanaka from Asahi Shimbun. In connection to the previous question regarding Paramount, I have an additional question. Up to now, You made a proposal about acquisition, and you did not make it very clear even then, and if there is anything that you can disclose about your motivation or intention to start your move on acquisition, and you also said that you would not re-propose because it is not well fitted to your strategy, so can you elaborate on that, please?

Speaker Change: And then in connection to the previous question regarding Paramount I have additional question.

Speaker Change: After now.

Speaker Change: You made a proposal about acquisition.

Speaker Change: And you did not make it very clear even then.

Speaker Change: And if there is anything that you can disclose what was your motivation AR or intention to start you'll move on acquisition and he also said that you would not re propose because it is not well fit into your strategy. So can you elaborate on that please.

Unknown Executive: as part of Sony's strategy, what is the place, what is the point which is unfitted to your This is an acquisition case. For each individual, the project, it's very difficult for me to answer the question. However, as I have mentioned so far, on our part, our high quality IP, and we have been focusing on the asset. And that particular asset, at the appropriate price, can be acquired, and if that kind of deal structure is established, we would like to become very serious about acquiring that kind of target company, but the company paramount is that the corporation is quite large in size, and for instance, if we have to acquire the entire organization, It would be That is the primary reason. Thank you.

Speaker Change: As the Sonys strategy what is the place what is the point, which is outfitted to your [noise].

Speaker Change: This acquisition case for each individual the project, it's very difficult for me to answer. The question. However, as I have mentioned so far on.

Speaker Change: On our part or all of the high quality equality, IP and we have been focusing on the asset and that particular asset.

Unknown Executive: And that particular asset, at the appropriate price, and that can be acquired. And if that kind of deal structure is established, we would like to become very serious about acquiring that kind of the target company. But the company, Paramount, that the corporation is quite large in size. And for instance, if we have to acquire the entire organization, it would be quite risky because our capital location itself may not be well fitted to our capital allocation strategy; that is the primary reason.

Speaker Change: At the appropriate price and that can be acquired and is that kind of deal structure is established we will like to become very serious about acquiring that kind of the target company, but at the company.

Speaker Change: The amount that the corporation is quite large in size and for instance.

Speaker Change: If we have to acquire the.

Speaker Change: And tier the organization.

Speaker Change: It would be quite risky and because of our capital allocation itself. It may not be well fitted to our capital allocation strategy that is a primary reason.

Unknown Executive: Thank you.

Speaker Change: Yeah.

Speaker Change: Yeah.

Unknown Executive: Next question, please.

Speaker Change: Next question please.

Unknown Executive: Next question, please. NHK, Nishikata-san. Please. Nishigata from NHK, two questions. First, about the Paramount Acquisition. Um, If you were able to submit another proposal, If you had thought that you could strike a deal at an appropriate price, would you have done so?

Unknown Executive: In H.K. Nishigata-san, please. Nishigata from NHK. Two questions. First, about the Paramount acquisition. If you were able to submit another proposal. If you had thought that you could strike a deal at an appropriate price, would you have done so. And the second is about the CMOS sensor. Well, EVs are being produced internally in China these days. And are there any concerns that you have in terms of the sales of your CMOS sensors? Because EVs are mainly being produced in China. Well, in regards to your first question, I think I've really answered that. So I really don't have anything to add to what I've already responded.

H K: H K, Michigan Synthes.

Unknown Executive: And the second is about the CMOS sensor. EVs are being produced internally in China these days. And are there any concerns that you have in terms of the sales of your CMOS sensors because EVs are mainly being produced in China? Well, in regards to your first question, I think I've already answered that. So I really don't have anything to add to what I've already responded to. I apologize. And secondly, about your second question about electric vehicles and the fact that they are trying to produce electric vehicles domestically.

Speaker Change: Yes, you got that from an H K two questions.

Speaker Change: First about the Paramount acquisition.

Speaker Change:

Speaker Change: If you were able to submit a proposal.

Speaker Change: And if you had thought that you could just strike a deal at an appropriate price would you have done so and the second is about the Cmos sensor.

Speaker Change: Evs.

Speaker Change: Am I being produced internally in China. These days and other anchors is that you have in terms of the sales of your Cmos sensors, because E visa mainly being produced in China.

Speaker Change: It goes to your first question I think I already answered that so I really don't have anything to add to what I've already responded I apologize and secondly about your second question about the electric vehicles.

Unknown Executive: I apologize. And secondly, about your second question about the electric vehicles. And the fact that they are trying to produce domestically electric vehicles. Well, the census for automobiles, I think you're talking about. But we, including the Chinese manufacturers, are not just doing business in China, but instead we are supplying to global OEMs, the census for automobiles. And therefore, in China also, we have competitors. And we want to make sure that we do not lose out in terms of our technology. But census for automobiles and census for smartphones, they are different. And the market, and it's still small for automotive sources.

Speaker Change: And the fact that they are trying to produce domestically and electric vehicles.

Speaker Change: Well.

Unknown Executive: Well, um... Well, the census for automobiles, I think you're talking about. But do we? Including Chinese manufacturers are not just doing business in China, but instead, we are supplying to global OEMs the sensors for automobiles, and therefore, in China also, we have competitors, and We want to make sure that we do not lose out in terms of our technology, but sensors for automobiles and sensors for smartphones are different, and the market is still small for automotive sensors. How much this will grow is something that we have to observe carefully.

Speaker Change: Well the sensors for automobiles I think youre talking about.

Speaker Change: But do we.

Speaker Change #100: Including the Chinese manufacturers are not just doing business in China, but instead, we are supplying to them global O E. M. M D sensors for automobiles and therefore in China also and we have competitors.

Speaker Change: And.

Speaker Change: And we wanted to make sure that we do not lose out at Joseph a technology Ah, but and sensors for automobiles and denim says as far as smartphones are there different edge of the market.

Speaker Change: It is still small for automotive sensors.

Unknown Executive: How much this will grow is something that we have to observe carefully.

Speaker Change #101: And how much additional growth them is something that we have to observe carefully that is all thank you. Thank you.

Unknown Executive: That is all. Thank you. Thank you.

Unknown Executive: That is all. Thank you.

Unknown Executive: Sashida, Sashida, Toshihide Endo, Shunsuke Sainan. We will end this Q&A session for the media.

Unknown Executive: We're starting to run out of time, so we'll take one more question. So please make it just one question because of time constraints. Are there no more questions? Shane Nunn, we will end this Q&A session for the media. The Investor Analyst Q&A session will start at 4.48. Thank you for watching!

Speaker Change #102: We're starting to run out of time, So we'll take one more question.

Speaker Change #103: So please make it just one question because of time constraints.

Speaker Change #104: Are there no more questions.

Speaker Change #103: Yeah.

Speaker Change #105: Seeing none.

Speaker Change #105: Oh, we will end this Q&A session for the media.

Unknown Executive: Investor Analyst QA session will start at Sashida, Toshihide Endo, Sashida, Toshihide Endo, Shunsuke Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, T Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, Sashida, Toshihide Endo, S As was the case for the media session, these four will be responding to your questions.

Speaker Change #106: Investor Analyst Q&A session.

Speaker Change #106: Ill start at 448.

Speaker Change #106: [music].

Speaker Change #106: Yeah.

Speaker Change #106: [music].

Unknown Executive: , , , , , , https://www.youtube.com.kr https://www.youtube.com.kr https://www.youtube.com.kr https://www.youtube.com.kr, We will soon start the investor analyst QA session. Please wait a little while longer until we start. Thank you for waiting.

Speaker Change #106: We will soon start a investor analyst Q&A session.

Speaker Change #108: Please wait a little while longer until we start.

Unknown Executive: I'd like to start the Investor Analyst Q&A session. I am with IR Group, KONDO, and I will be serving as moderator. And as was the case for the media session, these four will be responding to your questions. In terms of how to operate your phone, in asking questions... Please refer to the information previously provided. Please limit your questions to a maximum of two per person.

Speaker Change #108: Thank you for waiting like this start to Investor analyst Q&A session.

Avi: I'm with IL group condo Avi serving as moderator.

Speaker Change #110: And Oh.

Speaker Change #111: It was the case for the media session. This fall will be responding to your questions.

Unknown Executive: In terms of how to operate your phone in asking questions, please refer to the information previously provided. Please limit your questions to a maximum of two per person.

Speaker Change #111: In terms of how to operate or your phone and asking questions.

Speaker Change #111: Please refer to the information previously provided please limit your questions to maximum two per person.

Unknown Executive: Like to start the Q&A. Those who have a question, please hit at risk, then number one on your phone.

Unknown Executive: I'd like to start the Q&A. Those who have a question, please hit asterisk, then number one on your phone. So, first question: BOPI Securities, Hirakawa-san, please. Thank you.

Speaker Change #111: Like to start the Q&A.

Speaker Change #112: Those who have a question. Please hit asterisk then number one on your phone.

Mikio Hirakawa: So, first question. B.O.P.I. Securities, Hirakawa-san, please. Thank you. Hirakawa of B.O.P.I. Securities about games and music of questions. So, about games, monthly active user, 7% to Y on Y growth. That was a very strong growth. And can you talk about the background in a little more detail? Because there was an update of a large update last year, and that led to increased monthly active users. And are there any other factors I want to ask the background? That's the first question. And should I continue the questions? Please.

Speaker Change #113: So first question.

Speaker Change #113: B O P E Securities Carlos Humphreys.

Speaker Change #114: Thank you.

Unknown Executive: Hirokawa of DOA Securities. About games and music, I have a question. So, about games... monthly active user 7% y-on-y growth, that was very strong growth. And can you talk about the background in a little more detail? Because there was an update last year and that led to increased monthly active users, and are there any other factors? I want to ask about the background.

Speaker Change #115: <unk> of Bofa Securities about games and music of question.

Speaker Change #116: So about the games.

Speaker Change #115: Monthly active user.

7% to Y O Y on Y growth that was a very strong growth.

Speaker Change #117: And can you talk about the background in a little more detail.

Because.

Unknown Executive: That's the first question. And should I continue the questions? Please, about the music. Earlier, you talked about music streaming sales, mid-term growth, mid to higher single digits was your forecast. Until Q3 last year, growth was double digits without the forex impact. So that was the growth you had.

Speaker Change #118: There was an update of lodging.

Speaker Change #118: Update last year and that led to it.

Speaker Change #119: <unk> increased our monthly active users.

Speaker Change #119: And are there any other factors I won't ask the background. That's the first question.

Speaker Change #120: And should I continue the questions. Please.

Masahiro Ono: About the music. Earlier, he talked about music streaming sales, midterm growth, mid to higher single digits was your forecast. And until Q3 last year was double-digit without the forex impact. So that was the growth you had. Now, 6% in Q1 seems to be slowing down a bit. And so you think that you've come down to the midterm growth trajectory, or was there one time factor for Q1? And it's slower than this year's overall pace. Because at the beginning of the year, you said that for this year, subscription price rise was expected. So I was expecting a little bit higher.

Speaker Change #121: About the music.

Speaker Change #120: Earlier.

Speaker Change #122: You talked about music streaming sales midterm.

Speaker Change #120: <unk> growth.

Speaker Change #120: Yes.

Speaker Change #123: Mid to higher single digits, what's your forecast.

Speaker Change #120: And.

Unknown Executive: Now 6% in Q1 seems to be slowing down a bit. And so do you think that you've come down to the mid-term growth trajectory? Or was there a one-time factor for Q1?

Speaker Change #124: Until Q3 last year was double digit without the Forex impact. So that was the growth you had now 6% in Q1 seems to be slowing down a bit.

Speaker Change #125: And so you think that you have come down to the mid term growth trajectory or was there a onetime factor for Q1, and it's slower than this year's overall pace.

Speaker Change #126: Because at the beginning of the year you said for this year.

Speaker Change #127: Subscription a price rise was expected so I was expecting a little bit higher for those questions. Please.

Mikio Hirakawa: So those questions, please. Thank you for the questions. So let's take the first gaming network service question. I'll respond to that. The music question, Mathuka, will respond. So for games, in a year or a year, 7% growth, very good number is how we see it. And of course, the five install base is accumulating, PS5. And we have the franchise software contribution. So third party, free to play also strong. I won't go into this individual title names, but those tailwinds have had an effect. I think that's one of the factors. Mathuka, some please. So streaming service.

Unknown Executive: And is that slower than this year's overall pace? Because at the beginning of the year, you said that for this year, a subscription price rise of, say, 5% was expected. So I was expecting a little bit higher. So those questions, please. Thank you for the questions. So let's take the first game network service question. I'll respond to that. The music question, Matsuoka will respond. So, four games.

Speaker Change #128: Thank you for the questions. So let's take the first.

Matsuoka: Game and network service for question also respond to that the music question Matsuoka will respond.

Matsuoka: So for games.

Unknown Executive: MAU year-on-year 7% growth. A very good number is how we see it. Of course, the five install base is accumulating, PS5, and we have the franchise software contributions, so third-party, free-to-play titles are also strong. I won't go into the individual title names, but those tailwinds have had an effect. I think that's one of the factors. Matsuoka-san, please.

Speaker Change #130: And then you year on year, 7% growth very good number is how we see it.

Speaker Change #130: And.

Speaker Change #131: Of course Uh huh.

Speaker Change #131: The five installed base is accumulating pier five and Oh, we have a franchise.

Speaker Change #131: Our software contribution so third party fruit in a free to play also strong level go into the individual title names, but those are tailwind.

Speaker Change #131: And in fact, I think that's one of the factors.

Speaker Change #132: My focus on please.

Speaker Change #133: So streaming service.

Unknown Executive: So, streaming service. So if you look at that, the overall growth is in line with the previous trends. It may seem as if growth is slowing, but the factors behind that are... for Q1, well, one over a year ago. We raised the prices for multiple DSPs, and so the impact of that is now diminished, and we have the ad streaming service revenue from that, that is declining a bit, and however, on a constant currency basis, well, earlier we said five percent in dollar terms, but if you look at that in constant terms... It's higher, 6%, in the 6% range. According to our calculations, so the overall streaming growth rate is in line with our projections.

Masahiro Ono: So if you look at that, the overall growth is in line with the previous trends. And it may seem as if growth is slowing. The factors behind that are for Q1 or over a year ago, we raised the prices for multiple DSPs. And so the impact of that is now diminished. And we have the ad streaming service revenue of that. That is declining a bit. And however, in a constant currency basis, well earlier, we said 5% in dollar terms. But if you look at that in constant terms, it's higher, 6% in the 6% range, according to our calculations.

Speaker Change #133: So if you look at that the overall growth.

Speaker Change #133: Is in line with previous trends.

Speaker Change #133: And.

Speaker Change #134: Mmhmm things out there for growth is slowing the factors behind that are.

Speaker Change #135: For Q1 O one over a year ago.

Speaker Change #135: We raise the prices for multiple.

Speaker Change #135: Ah the SEBI and so the impact of that is now a diminished and Oh four and we have to you add streaming service revenue of that that is declining a bit.

Speaker Change #135: And however.

Speaker Change #135: Constant currency basis.

Speaker Change #135: Earlier, we said, 5% in dollar terms.

Speaker Change #135: But if you look at that in constant terms.

Speaker Change #135: It's higher 6% in the 6% range.

Speaker Change #135: According to our calculations and so overall streaming growth.

Masahiro Ono: So overall streaming growth rate is in line with our projections.

Rate is.

Speaker Change #135: He is in line with our projections.

Speaker Change #135: Yeah.

Masahiro Ono: Thank you.

Speaker Change #136: Thank you.

Ryosuke Katsura: Next question is from SMBC, Nico Katsura-san, please.

Unknown Executive: Next question is from SNBC's Niko Katsura-san. Please. Can you hear me?

Speaker Change #137: Next question is from S. M B C. Nico cuts it S. I'm. Please.

Unknown Executive: My name is Katsura from SMBC Nikko. So my question pertains to INSS semiconductor and also regarding financial services and regarding INSS, which mostly supplies major companies in North America. And if you have any pluses and minuses over the last three months, please share that with us. Now, at this moment, you increase the production in your supplementary document and the production capacity compared to our original. The projection seems to be stronger and bigger.

Nico: And then it cuts can you hear me my name is cuts at F. M. S N B C. Nico.

Shinji Sashida: Can you hear me? My name is Katsura from SMBC Nico. So my question pertains to INSS semiconductor and also regarding the financial services. And regarding INSS, Sashida, Toshihide Sashida, and regarding my second question on the operating income of the second quarter, I think the progress rate is the 21% and the operating income. And of course, there are the upside and downside risk under the current market condition. What is your view about that?

Nico: So my question pertains to I N S. S semiconductor and also regarding the financial services and regarding I NSS.

Speaker Change #139: So mostly supply to major the companies in North America, and that if you have any plus and minus over the last three months. Please share that with US now at this moment do you increase the production in your supplementary Duncan document and the like.

Speaker Change #140: Production capacity, a compare to our original projections seems to be stronger and bigger. So what is their concept on that and the mid to long term. There is a risk of who your competitors are entering the market I think that has been discussed in the market. So from mid to long term what.

Speaker Change #141: Is your view of your position in the market. This is the first question about semi conductor and then regarding my second question on.

Unknown Executive: So what is your concept of that? And in the mid to long term, there is a risk of your competitors entering the market. I think that has been discussed in the market. So from the mid to long term, what is your view of your position in the market? This is the first question about semiconductors.

Unknown Executive: And regarding my second question on the operating income of the second quarter, I think the progress rate is 21% and the operating income. And, of course, there are upside and downside risks under the current market conditions. What is your view about that? Thank you for your question.

Speaker Change #142: The operating income of the second quarter I think the progress rate is are the the 21% and Sao operating income and of course, there are the upside and downside risk Ah that under the current market condition, how what is your view about Tibet.

Shinji Sashida: Thank you for your question. Regarding INSS, I would like to answer the question. And about financial services, and I would like to ask Yamada-san to answer the question. And regarding INSS, well, the regarding individual of the customers, setting this aside, will we increase the production that you mentioned. And the reason is for the high end, the products we have increased the shipping for that reason. We have increased the production. And the risk of other companies entering the market, it has not started now. Under the severe competitive environment, we always have competitors, and we constantly analyze our competitors, and we try to overcome our weakness so that we can be advantageous in technology position.

Unknown Executive: Regarding INSS, I would like to answer the question, and about financial services, I would like to ask Yamada-san to answer the question. And regarding INSS, Well, regarding individual customers, setting this aside, well, we increased the production that you mentioned. The reason is for the high end, the products; we have increased the shipping for that.

Speaker Change #143: Thank you for your question regarding I N S. S. A reluctance of the question.

Speaker Change #143: And about financial services, and I would like to ask Emily to some to answer the question and regarding I N S. S.

Emily: Although the regarding individual all the customers are setting this aside well the increase of production that you mentioned and the reason is for the high end are the products that we have increased the shipping for that for that reason, we have increased our production.

Unknown Executive: For that reason, we have increased production. And the risk of other companies entering the market has not started yet. In a very severe competitive environment, we always have competitors, and we constantly analyze our competitors. And we try to overcome our weaknesses so that we can be advantageous in the technological position. And as for the long term, it's very difficult to make comments, but, during the MLP period, the risk of our competitors joining the market, if there are any concrete examples, I believe that the probability of this risk is quite small.

Speaker Change #145: And that the the risk of other companies are entering the market. It did not it has not started now and a very ah the severe competitive.

Speaker Change #146: Competitive environment, we'd always have competitors and we constantly analyze our that our competitors and we tried to overcome our weakness. So that we can be advantageous in technology position and that's for the long term, it's very difficult to make comments, but.

Kazuhiro Yamada: And that's for the long term; it's very difficult to make comments. But during our MLP period, the risk from our competitors joining the market, if there is any concrete, the example, I believe that the probability of this risk is quite small. That's my answer. And so about financial services, Yamada-san, please. Thank you for your question. The interest rate has getting higher, and there is a yen depreciation. And for that reason, that reached the surrender of the products and policies. And about the long life, for instance, natural disaster that has impacted, and for that reason. And of course, we try to overcome that in midterm, and how we should look at this ups and downs.

Speaker Change #146: During the M L P period.

Speaker Change #146: Yeah.

Speaker Change #146: The risk from our competitors joining the market. If there is any concrete the examples I believe that the probability of this risk is quite small that's my answer.

Unknown Executive: That's my answer. Question about financial services, Yamada-san, please. Thank you for your question. In the first quarter, the progress rate, 25%, that is a little bit low.

Speaker Change #147: And so about financial services geometer. Some please thank you for your question.

Speaker Change #148: The first quarter and the progress rate, although the 25% that is a little bit are the law are there are two reasons. The first is at Sony life.

Unknown Executive: There are two reasons. The first is, at Sony Life, there is a larger number of surrenders, increased surrender, particularly dollar-based; the rate of interest is getting higher, and there is a yen depreciation. And for that reason, that leads to surrender of the products, and policies. And about the non-life, for instance, natural disasters, that have impacted us, and for that reason, and, of course, we try to overcome that in the midterm, and how we should look at these ups and downs.

Speaker Change #149: There is a larger number of surrender increased surrender, particularly dollar based the rate.

Speaker Change #149: Interest rate has getting higher and there is a yen depreciation and for that reason that reached the surrender of the products our policies and about the non life.

Speaker Change #150: For instance, a natural disaster.

That has impacted and for that reason and of course, our we tried to Ah that overcome that in midterm and how we should look at this ups and downs and four during the first quarter.

Kazuhiro Yamada: And for the during the first quarter. That our sales performance has been quite good, and that is considered to be upside potential. But for the life insurance, the sales performance, even that is good, does not lead to profitability, depending upon the offering of the services; the effects have been penetrated gradually. And for the sales activities, there is the increase of surrender. And of course, that is a main deal due to the market condition, but life planners, that we have to provide good information to the customers so that they are able to make good judgement. I think that will give upside potential.

Unknown Executive: And for, during the first quarter, Unknown Attendee, Masao Muraki, Naruhiko Sakamaki, Kimio Maki, Shinji Sashida, Toshihide Endo, Unknown Attendee, Masao Muraki, Naruhiko Sakamaki, Kimio Maki, Shinji Sashida, Toshihide Endo, Sony Corp

Speaker Change #151: That's the our sales performance has been quite good and that is considered to be upside potential but for the life insurance are the sales performance. Even that is good that's not lead to profitability, depending upon the offering of the services thus the well.

Speaker Change #151: The effects have been penetrated gradually and for the sales activities. There. It reads the increase of surrender and of course that is mainly due to the market condition, but life planners are that we have to provide good information to the customers. So that they are able to make.

Speaker Change #152: Good judgment I think that will give upside potential and also for the market downside. The market are there is a lot of the changing conditions, but compared to the end of June the interest rate falls and also for the <unk>.

Kazuhiro Yamada: And also for the market downside, the market, there is a change in conditions. But compared to the end of June, the interest rate falls. And also for the stock market, there is some fall, and for an exchange, we see the yen appreciation. So for the interest rate, we are quite positive about that, and for an exchange and stock price, we are negative. And so this market condition may be reflected in upside and downside. So we have to pay constant attention to the market condition so that we can always constantly control the profitability. Thank you.

Speaker Change #152: It's stuck.

The stock market that there is simple and foreign exchange are we see the yen appreciation and so for the interest rate. We are quite positive about that and foreign exchange in Stoke are the price we are negative and so this is a market condition may be reflected in upside and downside.

Speaker Change #152: And so we have to pay constant attention to the market condition. So that we can always constantly control the profitability. Thank you.

Unknown Executive: Next. Thank you very much.

Unknown Executive: And next, from Mizuho Securities, Nakane-san, please. Thank you very much.

Mizuho Securities: And next from Mizuho Securities and mechanism. Please.

Unknown Executive: This is Nakane from Mizzou Securities. I also have two questions. Well, I think we had a less than 30 percent capital ratio, but now it's more than 40 percent. And when it was 30 percent, you said that more than 40 percent would be your target, more or less, I believe. But now you currently exceed 50 percent, and the leverage is not working. So, excluding financial services.

Speaker Change #155: Thank you very much and this is not going to if I Miss those securities and I also have two questions.

Unknown Executive: This is not going to come as a security. I also have two questions. Well, it's a related question. But first is the investor return and buyback. And that next is balance sheet. From May, looking at your buybacks in three months, it's closer to $100 billion. And on average, the price is more than $14,000 yen. So irrelevant to the share price, you are continuing with the buyback. And it seems to be that you, well, there's a strategic investment. So it's the best to invest in Sony. And that is the reason why investing in Sony. And so I think that that was your stance.

Speaker Change #156: But it's a related question, but first is the investor return and buyback and that Nexus balance sheet.

Speaker Change #157: May I'm looking at your buybacks at three months, it's closer to 181 billion and on average and the price is up more than 14000 yen and so irrelevant to the share price I'm you are continuing with the buyback and I'm it seems to be that dumb U.

Speaker Change #158: Well invest in strategic investment so it's the best invested Sony and days of easy way investigator zoning and I'm. So I'm I think of that Jim that was your stance, but have you changed your policy.

Unknown Executive: But have you changed your policy? So that is one thing. And also the second is excluding financial service balance sheet. Well, I think we have the less than 30% capital ratio. But no, it's more than 40%. And when it was 30%, you said that more than 40% would be your target, more or less, I believe. But currently it's exceed 50%, and the leverage is not working. So excluding financial service, the shareholder's equity ratio. And what is the minimum that you have in mind? So please tell me about that. So these are my two questions.

Speaker Change #159: So that is one thing.

Speaker Change #160: And I'm also of the second is excluding financial services balance sheet, well I think.

Speaker Change #161: The less than 30% capital ratio, but now it's more than 40% and when he was at 30% you said them that more than 40% would be your target more or less I believe a bad joke now you are.

Speaker Change #161: Currently exceed a 50% and the leverage is not working so excluding financial service.

Unknown Executive: The shareholder's equity ratio, what is the minimum that you have in mind? I'm so pleased that you can tell me about that. So these are my two questions. Thank you very much.

Speaker Change #162: At the shareholders' equity ratio, but.

Speaker Change #163: What is the minimum that you have.

Speaker Change #164: And mine them. So I'm pleased to tell it me about that so these are my two questions.

Unknown Executive: There are two questions. Hayakawa san will first respond, and therefore, we want to increase the total payout ratio to 40%. And therefore, I think we are strengthening our shareholder return. And this has been incorporated, and also, currently, looking at the share prices, we are buying. So please understand that that is the current case. That's the answer to your first question.

Unknown Executive: Thank you very much. There are two questions. So Hayakazan will first be a response. Thank you for the question about your first question. As you said, we as a company have been buying back our shares, and it has been part of our strategic investment. Looking at the financial situation of business performance and share prices, have been trying to do it with agility. And so this has not changed, but from this fiscal year, the fifth MRP. I want to strengthen our shareholder return. Therefore, if we want to increase the total payout ratio to 40%, and therefore I think we are strengthening our shareholder return.

Speaker Change #165: And thank you very much and they're two questions. So of Hyatt goes I will first which is it's fun.

Speaker Change #166: Yeah. So thank you for the question about your first question, Yes. As you said, we are as a company and have the buying back shares and it has been part of our strategic investment and began to financial situation of business performance. The share prices have been H I do I just do it with.

Speaker Change #166: Agility and so this has not changed yet, but just from this fiscal year and the fifth MRP. We highlight just takes it a shareholder we did I did therefore, if why are we want to increase the total payout ratio to 40% and therefore I think we are striking a shareholder return and this has been incorporated and.

Unknown Executive: This has been incorporated and also currently looking at the share prices we are buying. So please understand that that is the current case. That's the answer to your first question. We want to have a competitive financial place, and we want to try to achieve a 40% more excluding financial service. And from that point of view, because of the accumulation of profit, our shareholder equity ratio has increased. But we think that with the buybacks that was explained, we can try to improve the capital efficiency on a balance sheet. That is all. Thank you. Thank you very much.

Speaker Change #167: So it's currently they're looking at the share prices are we are buying so please understand that that is a good case that said the answer to your first question. The second as you say as of the end of June and looking at them is at 54% shareholder equity ratio and as of yet.

Unknown Executive: The second, as you say, as of the end of June, looking at, it's a 15.4% shareholder equity ratio, and we want to try to achieve 40% more, excluding financial services. And from that point of view, currently, because of the accumulation of profit, our shareholder equity ratio has increased. But we think that with the buybacks that were explained, we can try to improve capital efficiency on the balance sheet. That is all. Thank you.

Speaker Change #168: And we think that Devon Lizzy.

Speaker Change #169: For the I am shareholder equity ratio, we have done changed out the gate and we wanted to have a healthy balance sheet and looking at the investment up or did he added market changes and we wanted to have a competitive fight is in place and we wanted to try to achieve a 40% lower excluding financial services from that point of view a goodly.

Speaker Change #169: We are because of the accumulation of puppy dog I'm shareholder equity ratio has increased yet, but we think that with the buybacks. It was explained that we can and try to a booth that capital efficiency on our balance sheet.

Speaker Change #170: That is all thank you.

Speaker Change #171: Thank you very much.

Unknown Executive: Next, JP Morgan, securities, I add some please. Thank you. I add up from JP Morgan. I also have two questions about gains and I and SS. First about gains, add on sales growing substantially in databases, about the 20% growth in revenue things. But the breakdown I want to know, if you can make some supplemental comments about that, what's included here? First add on and third party add on first being less share and large titles. And that was strong, but the last year and others within third party, I think you can have those three categorization. So I can show the breakdown.

Speaker Change #171: Next.

JP Morgan: JP Morgan.

Speaker Change #171: Securities.

Unknown Executive: Ayada-san, please. Thank you. Ayada from J.P. Morgan. I also have two questions about games and S.S. First, about games. Add-on sales are growing substantially, in dollar terms. About 20% growth in revenue, it seems, but the breakdown, I want to know. If you can make some supplemental comments about that, what's included here, add-on and third-party add-on, the first being Lescher and large titles that were strong, Patek Lescher and others, within third-party. I think you can have those three categorizations.

Speaker Change #172: I add assemblies.

Speaker Change #172: Thank you.

Unknown Executive: So, can you show the breakdown? And the one queue add-on structure; how is that going to be reflected in Q2 onwards? And the second question is about the INSS.

Speaker Change #174: Adder from Jpmorgan I also have two questions about games and I.

Speaker Change #175: I N S S.

Speaker Change #176: First about games.

Speaker Change #176: Add on sales.

Speaker Change #178: Growing substantially.

Speaker Change #176: And dollar basis.

Speaker Change #179: About a 20% growth in revenue since but the breakdown I want to know.

Speaker Change #180: If you can make some supplemental comments about that what's included here.

Speaker Change #181: Uh huh.

Speaker Change #182: First add on and a third party add on.

Speaker Change #183: First being a mixture and large titles are there that was strong but a lesser in others.

Speaker Change #184: Within the third party I think you can have those street categorization.

Speaker Change #184: Sorry.

Speaker Change #184: 10 years. This shows the breakdown and the one to add on structure, how is that going to reflected in the Q2 onwards.

Unknown Executive: And the one to add on structure, how is that going to be reflected in the Q2 onwards?

Shinji Sashida: And the second question is about the INSS inventory from end of March has increased about 100 billion. And so I think there's because of seasonal factors work in progress. But if you look at a final inventory, what's the current level? Is it high, low? I think the enterprise is going up for chips, and that's why the value is going up. But in terms of volume terms, finished product inventory, is it sufficient? Sashida and based on that, Q2 onwards, what will be the utilization, what's your view on that, please. Thank you. And also, for individual titles, it's difficult to comment, but for several, or it's divided into several titles, and the biggest title that you can imagine, that is growing and that is true.

Speaker Change #185: And the second question is about the I N S S.

Unknown Executive: Inventory from the end of March has increased by about 100 billion, and so I think there is, because of seasonal factors, work in progress. But if you look at the final inventory, what's the current level? Is it high? Low?

Speaker Change #185: Inventory.

Speaker Change #186: As of end of Oh from end of March increased about 100 billion and so I think there's a because of the seasonal factors are work in progress, but if you look at our final inventory what's the current level is at the high low.

Unknown Executive: I think the unit price is going up for chips, and that's why the value is going up, but in terms of volume terms, finished product inventory, is it sufficient? and based on that, Q2 onwards. What would be the utilization? What's your view on that, please? Thank you. I would like to answer both questions first: first, game and network service add-on sales are growing. You point out that that's correct. Most from the third party. First party, a little bit, but mostly it's for the third party.

I think the unit prices going up for chips, and that's why the values going up but in terms of volume terms.

Speaker Change #187: Finished product inventory is it sufficient.

Speaker Change #187: And based on that.

Speaker Change #188: Q2 onwards.

Speaker Change #189: What would be the utilization what's your view on that please.

Speaker Change #190: Thank you.

Speaker Change #191: Like to ask both questions first a game and network service add on sales.

Speaker Change #192: Growing you point out that that's correct most oh from third party.

Speaker Change #193: First party, a little bit, but mostly it's a four third party I think I can say it that way.

Speaker Change #194: And also.

Unknown Executive: I think I can say it that way, and also, for individual titles, it's difficult to comment, but for several, well, it's divided into several titles, and the biggest title that you can imagine is growing, and that is true, but others as well, there are various titles are growing steadily. I think I can put it that way also, Indices. Basically, as you point out, there's the impact of seasonality. That is the big impact.

Speaker Change #195: Uh-huh for individual titles, it's difficult to comment.

Speaker Change #195: But.

Speaker Change #196: First of all it's divided into several titles.

Speaker Change #196: And the biggest.

Speaker Change #196: Title that you can imagine.

Speaker Change #196: That is a growing and that is true.

Shinji Sashida: But others, as well, there are various titles growing steadily. I think I can put it that way. Also, in this sense, basically, as you point out, there's an impact of seasonality. That is the big impact. And the finished inventory in terms of volume. Is it sufficient? What's your question? Looking at the sales size, it's at a rational level, reasonable level. Q2 onwards, what will be our utilization, mobile image sensors, or at full capacity almost? That's my view. Thank you.

But the others.

Speaker Change #196: So well there are various titles.

Speaker Change #196: Growing steadily.

Speaker Change #196: I think I can put it that way.

Speaker Change #196: Also.

Speaker Change #196: Indices.

Speaker Change #196: Basically.

Speaker Change #196: As you point out.

Speaker Change #197: There's the impact of seasonality that is the big impact.

Unknown Executive: And to finish the inventory in terms of volume, is it sufficient? That was your question. Looking at the sales size, it's at a rational level, a reasonable level. Q2. Onward for the beer utilization, Mobile Image Sensors. We're at full capacity, almost. That's my review. Thank you.

Speaker Change #198: Oh and the finished inventory in terms of volume is it sufficient towards your question.

Speaker Change #199: Looking at our sales Uh huh size, it's at a rational level.

Speaker Change #200: Reasonable level Q2.

Speaker Change #201: Onwards, what would be our utilization.

Speaker Change #202: Mobile image sensors.

Speaker Change #203: Oh, we're at full capacity you're almost.

Speaker Change #204: That's my view.

Speaker Change #204: <unk>.

Unknown Executive: The time is running short.

Unknown Executive: The time is running short, so the next question will be the last question. So please limit your question to one question. Yasui-san, from

Speaker Change #204: The time is running short so the next question will be the last question.

Unknown Executive: So the next question will be the last question. So please limit your question to one question.

Speaker Change #205: So please limit your question to one question yes.

Unknown Executive: Yes, please, Sam, from UBS. Thank you. My question is about economic, the condition that the Toto Gisan already explained that the forward exchange and also US are the major impact factors. And for those two factors, I believe that depending upon the categories, I think there is a change in the impact. So what are the categories which are affected? And since you as economy and the foreign exchange, you put more emphasis. And in your business model, in a realistic way, if the, well, I think, are there any things that you're worried about? If those things happen, you're worried about that.

Speaker Change #204: Yes see some from.

Unknown Executive: UBS Securities, please. Thank you. My question is about the economic conditions that Totoki-san already explained that the foreign exchange and also the U.S. are the major impact factors. And for those two factors, I believe that depending upon the categories, I think there is a change in the impact. So what are the categories which are affected? And, for instance, the U.S. economy and foreign exchange, you put more emphasis on. And in your business model, in a realistic way...

UBS Securities: UBS Securities. Please.

Speaker Change #207: And my question is about the economic condition, that's what they'll get some already explained that.

UBS Securities: The.

The foreign exchange and also U S are the major impact factors and for those two factors I believe that the.

Speaker Change #208: So depending upon the categories I think there is a change in the impact. So what are the categories, which are affected and for instance, the U S economy and foreign exchange you put more emphasis and in your business model.

Speaker Change #208: In a realistic way.

Speaker Change #208: Yeah.

Speaker Change #208: If the.

Unknown Executive: Well, I think there are some things that you're worried about. If those things happen, you're worried about that. If so, how do you define and interpret the future of economic concerns this time? Thank you very much.

Speaker Change #209: Well I think are there any things that they are worried about if those things happen you are worried about that if you are how do you define and interpret the feature of economic that concerned this time.

Toshihide Endo: But if you are, how do you define and interpret the future of economic concerns this time? Thank you very much. Sashida, Toshihide Endo, Toshihide Endo, Toshihide Endo, Toshihide Endo, Toshihide Endo, Toshihide Endo, Toshihide Endo, Toshihide may impact our business significantly. Tsutsumi Matsuoka, thank you very much. It's time for a question, and we'd like to thank you for taking part in our Q1.

Speaker Change #210: Thank you very much.

Unknown Executive: So regarding foreign exchange, the sensitivity issue should be addressed, so Hayakawa san will answer that question. Thank you for your question and for our forecast of financial results. By presenting that, in the immediate past, there was rapid foreign exchange, and there was fluctuation, but we have updated with yen depreciation for both the euro and the US dollar, and ISS is most affected in terms of sensitivity. And so for the immediate forecast, we have to update for each category. And as for the foreign exchange sensitivity of music and pictures, accounting translation is included. One for one dollar.

Speaker Change #211: So regarding foreign exchange are the sensitivity issue I should be the address to snow heck of a son will answer that question. Thank you for your question.

Unknown Executive: 50 yen, the sensitivity exists, and so including the accounting, the translation and for euros 65 yen and so by those numbers you can see the impact but that is the sensitivity for the next one year for the one year and so there is the foreign exchange hedge the hedge effect and that will be offset to a certain extent and on the 5th there was yen appreciation up to 140 yen but currently the 146 or 147 yen still volatility is high but we would like to check the factors for fluctuation and we would like to address this issue properly and manage that and if it is needed for electronics the price revision has been carried out so we will be very flexible in even including the transferring that impact into price, and so in overall picture after August, if there is a 10 yen depreciation in dollar and euro will move in parallel with that in that assumption in terms of sensitivity on a consolidated basis the 70 to 80 billion yen worsening is anticipated but that is just a matter of assimilation and before foreign exchange moves that way of course we do have the some the advance the countermeasures taken and we have to also make some adjustment and also cost will be the cut in accordance with that so may not directly impact our financial results. And at this moment.

Speaker Change #212: And therefore, our forecast for the financial results by presenting that.

Speaker Change #213: Our immediate past there was the the rapid foreign exchange are the fluctuation, but so are we a have updated with our yen the depreciation for both the there yet a euro and the that you are the U S dollar and I S. S.

Speaker Change #213: Is most affected in terms of sensitivity and so they need it forecast all we have to update for each category and that's for the foreign exchange sensitivity for music and pictures are the accounting translation is included one.

Speaker Change #213: Roughly one dollar.

Speaker Change #214: 50 in.

Speaker Change #214: That sensitivity exists.

Speaker Change #214: And so including the counting of the that's a that translation and four years 65 yen as shown by those numbers you can see the impact but that is the sensitivity for the next one year for one year and so there is a for Nic.

Speaker Change #214: And hitch and the hedge effect and that will be offset to a certain extent.

Speaker Change #215: And on the fish are there was a yen appreciation up to 140 N. But currently are the 146 or 40 and 147 yen still volatility is high but we would like to check the factors for fluctuation and we've lacked address this issue properly and manage that and if.

Speaker Change #216: It is needed for electronics, Oh, the product price a revision has been carried out and so we will be very flexible in even including the transferring that impact into price.

Speaker Change #216: And so in overall picture.

Speaker Change #216: After August.

Speaker Change #217: If there is say your opinion are the yen depreciation in dollar and Euro who will move in parallel lives that in that assumption in terms of sensitivity on a consolidated basis. The 70 to 80 billion yen worsening is anticipated but that is.

Speaker Change #218: Just a matter of a simulation and before foreign exchange moves that way.

Speaker Change #219: Of course, we do have the some of the the advance are the counter measures taken and we have to also make some adjustment and also cost will be cut in accordance with that so may not directly impact our.

Speaker Change #218: Financial results.

Speaker Change #218: And at this moment.

Unknown Executive: Overall sales, and compared to our business scale, the foreign exchange impact is not that great within a certain range. So we'd like to continue to control this and manage this solidly. And from the perspective of the business model, in the macro picture, the risks which may impact our business significantly, Well, it's very difficult to...

Speaker Change #218: Over all sales.

Speaker Change #218: And compare to our business scale.

Speaker Change #218: On a consolidated basis are the foreign exchange impact is not that great and within a certain range. So we'd like to continue to control this and manage this a solidly.

Speaker Change #218: And from the perspective business model and the macro picture are there risks, which may impact our business significantly.

Speaker Change #218: Okay.

Speaker Change #220: Well, it's very difficult to.

Speaker Change #218: Yeah.

Speaker Change #218: Think about them, but geopolitical risk is certainly the big risk and when it the our peers in the macro picture that may give a major impact for image sensor.

Unknown Executive: I think about them all the time, but geopolitical risk is certainly the big risk. And when it appears in the macro picture, that may have a major impact. For image sensors, US-China relations have significantly impacted our business in the past. We have experienced this. So regarding geopolitical risk, we have to be always very cautious about it.

Speaker Change #218: S. A China relations have significantly impacted our business in the past we do experiences shall.

Regarding geopolitical risks, we have to be always very cautious about it.

Speaker Change #221: Thank you very much.

Unknown Executive: Thank you very much. It's time for us to end, and we'd like to thank you for taking part in our Q1 earnings announcement meeting.

Speaker Change #222: Its toughest gens and wed like to thank you for taking part in our Q1 earnings announcement meeting. Thank you.

Speaker Change #222: Yeah.

Speaker Change #222: Yes.

Speaker Change #222: Sure.