管理層發言
Today, I will explain the content shown here. Sales of continuing operations in FY '25 Q3 increased 1% compared to the same quarter of the previous fiscal year to JPY 3,713.7 billion, and operating income increased 22% to JPY 515 billion. Both were record highs for the third quarter. Net income increased 11% to JPY 377.3 billion. The financial results by segment are shown here. We upwardly revised our full year sales forecast from the previous forecast 3% to JPY 12,300 billion, operating income 8% to JPY 1,540 billion and net income 8% to JPY 1,130 billion. We increased our forecast for operating cash flow 9% to JPY 1,630 billion. The forecast for each segment is shown here. Now I will turn to an overview of each business. First is the G&NS segment. FY '25 Q3 sales decreased 4% year-on-year, primarily due to lower hardware unit sales. Operating income increased 19% year-on-year, primarily due to the positive impact of foreign exchange rates and the impact of increased sales and network services and first-party software, setting a record for the third quarter in this segment. We upwardly revised our FY '25 sales forecast 4% from the previous forecast to JPY 4,630 billion and our operating income forecast 2% to JPY 510 billion. User engagement trended well during the quarter with the number of monthly active users across all of the PlayStation in December increasing 2% compared to last December to a record high of 132 million accounts, and total play time for the quarter increased 0.4% year-on-year. Although conditions in the console hardware market during year-end selling season were more challenging than expected, we were able to steadily expand our PS5 installed base in line with our original plan and exceeded 92 million units on a cumulative selling basis. While PS5 hardware unit sales have decreased moderately in the latter half of the console cycle, software revenue from the PlayStation Store reached a record high during the quarter, primarily driven by the contribution of major third-party franchise titles and new hit releases. PlayStation Plus significantly contributed to the results of the quarter as the shift to higher tiers of the service continued. As for securing a supply of memory, we are already in a position to secure the minimum quantity necessary to manage the year-end selling season of next fiscal year. Going forward, we intend to further negotiate with various suppliers to secure enough supply to meet the demand of our customers. Given the stage of our console cycle, our hardware sales strategy can be adjusted flexibly, and we intend to minimize the impact of the increased memory cost on this segment going forward by prioritizing monetization of the installed base to date and striving to further expand our software and network service revenue. In the Studio business, "Ghost of Yotei," a tentpole title we released in October, exceeded the sales of the previous title in the same period of time and significantly contributed to the financial results of the quarter. Our established live service titles like "Helldivers 2" and "MLB The Show" also contributed stable recurring revenue. We expect that "Marathon," which is scheduled to be released on March 5, will be enjoyed by many users, thanks to Bungie having strengthened the gaming experience. Next fiscal year, we plan to release new titles such as "Saros" and "Marvel's Wolverine," and we intend to enhance our effort to increase the revenue of our Studio business. Next is the Music segment, primarily due to an increase in live events, sales, and streaming revenue in Recorded Music, FY '25 Q3 sales increased 13% year-on-year. Operating income increased 9%, reaching a record high for the third quarter, excluding one-time items. On a U.S. dollar basis, streaming revenues for the quarter increased 5% year-on-year in Recorded Music and 13% in Music Publishing. We upwardly revised our sales forecast 4% from the previous forecast to JPY 2,050 billion and our operating income forecast 16% to JPY 445 billion. We incorporated a remeasurement gain of approximately JPY 45 billion from the acquisition of an additional equity interest in Peanuts Holdings and the forecast for operating income. SMG artists delivered hits during the quarter and the sales of SMG continued to increase by double digits year-on-year, like in the previous quarter. Rosalia's new album "Lux" reached #1 globally in its first week on Spotify, and Peso Pluma's collaborative album "Dinastia" is one of the most streamed on Spotify. These global successes and global hit artists are the result of SMG's strategic focus on discovering local artists and supporting their musical endeavors. Many SMG artists and songwriters received accolades and nominations at the 68th Annual Grammy Awards held in the U.S. earlier this month, with Bad Bunny winning Album of the Year for "Debi Tirar Mas Fotos," as Beyonce did last year. In Visual Media and Platform, the theatrical release of "Demon Slayer: Kimetsu No Yaiba The Movie: Infinity Castle," which has exceeded JPY 100 billion in global box office revenue, continued to contribute, and the mobile game "Fate/Grand Order," which celebrated its 10th anniversary in July 2025, contributed more to our results than expected. Next is the Picture segment. FY '25 Q3 sales decreased 11% year-on-year and operating income decreased 9%, primarily because the same quarter of the previous fiscal year benefited from the contribution of the blockbuster film, "Venom: The Last Dance" and licensing revenue from other theatrical released films. Our forecast is unchanged from the previous forecast. In January, SPE signed a new Pay-1 licensing agreement with Netflix. Through this agreement, Netflix will stream on a global basis SPE's future theatrical films in the Pay-1 window, the initial window within the long TV licensing period that follows the theatrical and home entertainment periods. This agreement is an industry-first global licensing deal that will enable SPE to secure an even more stable revenue base during the period of the deal. Furthermore, the signing of this agreement is proof of SPE's excellent production capabilities and the power of its appealing IP. As an independent production company, we will continue to pursue other licensing opportunities with a wide range of distribution partners beyond the Pay-1 window. Now I will explain our additional investment in Peanuts IP, which we announced in December as an initiative that spans our music and picture segments. Through this transaction, Sony will gain ownership of 80% of Peanuts worldwide, which owns the rights and manages the business of Peanuts IP, one of the world's leading evergreen IPs. While closely collaborating with the family of Mr. Schulz, the creator of Peanuts, who owns the remaining 20%, we aim to further grow the scale of the business and further increase the value of the brand over the long term by leveraging the strength of the Sony Group. Specifically, we aim to enhance SMEJ's music, video, and event business by leveraging Peanuts IP and collaborating with SMEJ's artists and content. Furthermore, by utilizing SPE's production capabilities and distribution network, we aim to make Peanuts IP more accessible to a wider audience and share its charm with people all over the world. The transaction is expected to close during the current fiscal year, subject to certain closing conditions, including regulatory approvals by the relevant authorities. Next is the ET&S segment. FY '25 Q3 sales decreased 7% year-on-year and operating income decreased 23% year-on-year, primarily due to the impact of lower sales, partially offset by an improvement in operating expenses. Our full-year forecast remains unchanged from the previous forecast. Despite a continued decline in sales in China due to reduced government subsidies and weakness in the overall market during the shopping season for Singles Day, demand in the global interchangeable lens camera market during the quarter remained strong year-on-year, mainly in Asia. The Alpha 7 Mark 5 released in December has been selling well as a new product for the volume zone of the full-frame mirrorless single-lens reflex camera market, and we expect it will continue to contribute to sales in the fourth quarter ending March 31, 2026. Regarding the impact of the situation in the market for memory, we are almost in a position to secure the quantity we need through the year-end selling season for next fiscal year. We will continue to monitor the situation while working to minimize the impact on profitability. On January 20, Sony signed an MOU with TCL aimed at forming a strategic partnership in the home entertainment field. In the MOU, both companies agreed that a joint venture between the 2 companies would operate Sony's home entertainment business, and we are negotiating the details with the intention of executing a definitive agreement by the end of March. By leveraging Sony's high definition and high fidelity technology, brand strength, and operational management capability while utilizing TCL's advanced display technology, cost competitiveness and vertical supply chain strength, the joint venture aims to further strengthen the competitiveness of this business and realize sustainable growth. Last is the I&SS segment. FY '25 Q3 sales increased 21% year-on-year and operating income increased 35%, both of which were record highs for the third quarter for the segment. These are primarily due to an increase in sales volume and unit prices of mobile image sensors. We upwardly revised our sales forecast 5% to JPY 2,080 billion and operating income forecast 13% to JPY 350 billion, primarily driven by the increase in sales volume and sensors for mobile devices and the impact of foreign exchange rates. Mobile image sensor sales during the quarter increased significantly year-on-year due to a gradual recovery in the smartphone market, strong shipments for new products from our major customers, and higher die-sized sensors. Because recent orders are stable, we believe that the supply chain concerns we mentioned at the previous earnings announcement have receded, and we have upwardly revised our annual shipment forecast for mobile image sensors. Going forward, we think that the impact of the situation in the memory market will become more apparent, mainly in the form of fewer smartphones made primarily for the low-end market. Since Sony's image sensors are primarily for the high-end market, at this time, we think the impact will be relatively small. We will continue to monitor the situation while keeping in close contact with our customers. In addition, we are continuing to take action to address low-margin business, as we mentioned at the previous earnings announcement. As a part of that, we have incorporated additional expenses for resource and asset optimization of the relevant business in our forecast for FY '25 Q4. We will continue to focus on improving our business portfolio and raise our profitability. To summarize, the G&NS, Music, and I&SS segments achieved record high operating income and are driving the profit growth of the Sony Group overall this quarter. We believe that the structural profitability of the group is further improving. Given the continued uncertain business environment, we plan to carefully manage our business and consistently produce results as we approach the fiscal year-end. We intend to take actions this fiscal year to get off to a good start next fiscal year. As for shareholders' returns, today, we increased the maximum of our share repurchase facility established in November 2025 from JPY 100 billion to JPY 150 billion. This concludes my remarks.
That was Ms. Tao. Following the presentation, we will have a Q&A session for the media at 4:20 p.m. and for investors and analysts at 4:45 p.m. Each Q&A session is scheduled to last approximately 20 minutes. Please wait. The session will resume shortly. Thank you for waiting. We'll start the Q&A session. First, we will introduce today's speakers: Chief Financial Officer, Corporate Executive Officer, Lin Tao; Senior Vice President in charge of Accounting, Hirotoshi Korenaga; Senior Vice President in charge of Corporate Planning and Control, Naoya Horii. We'll take questions from the media.
分析師問答
Yes. I'm Umegaki from Toyo Keizai. Can you hear me? All right. So I'd like to ask 2 questions. The first question is about "Marathon," and it's going to be released on March 5, I understand. And it has been delayed. And what kind of considerations did you have until you decided to have this? And well, in the past, there were cases that have been stopped short, but what kind of learning do you have? And for the live service game, what is the strategic significance of having that? And this kind of platform, I think, but to have quite a number of platforms, what is the significance for the group to have such platforms?
Yes. Thank you for your question. And as for "Marathon," it has the user tests and then from the users' feedback on "Marathon," and in the game, we took into consideration what was good and what was not, and we have modified it. After the modification, we are very confident to release it on March 5. As for the live service, the game's significance you asked about, what is most important for us is that the live service is a recurring revenue. Recurring revenue means that it can be hit-driven. If it comes a hit, then for a year, it can bring revenue; if not, there will be no revenue. So that's the merit of having a hit live service. However, we do not want to have too many of them; instead, the idea is that AAA and live service games would become integrated into a portfolio management style.
And the second question is about your stock price. You had announced your earnings results, and it was a JPY 3 plus, but it's almost flat. So the market valuation is quite severe, I think. The stock performance is not good because the memory had risen. But it's rather Sony Group; it seems that there has been a harsher view on the Sony Group. So what do you see as a CEO? You have announced the share buyback, but the market capitalization, in order to raise the market capitalization, do you have any continuous way to keep that going up?
All right. Thank you for your question. And about the stock price, we had several information revisions, but it's not performing well. I think you have various thoughts about that. One thing is that there are concerns for the memory supply. And as an industry, yes, that is one concern. The other is the entertainment stocks have generally seen capital related to AI move towards AI-related companies. I think that's why. For us, what we can do as a business is to look at the fundamentals to make it even stronger. We will improve profitability and optimize the portfolio while ensuring that our long-term strategy is maintained. We plan to implement our business strategy to enhance performance and communicate our efforts to the stock market, so they will value our approach. That’s all for me.
The AI...
Excuse me, but that's the end of your 2 questions. Next question from Nikkei, please.
I also have 2 questions. First, about ET&S structural reform. Today, you have mentioned that with TCL, you're going to move to a joint venture with TCL. You talked about synergies. So separating the TV business, what's the intent of that? And Home Entertainment, what's the scope? I'm sure that the details are still being discussed. So to the extent possible, can you describe the range that this covers? Also, for smartphones, you mentioned that they are positioned as a structural reform business. Have there not been any changes to that status? Is collaboration with an external source an option?
Thank you. For smartphones, we don't have plans for significant changes. With TCL, we have a strategic partnership for Home Entertainment. This is about a review of the portfolio, and we are continuously adapting to the changing business environment. Optimizing that is our management mission. Sony has accumulated assets over many years, and we are combining that with the strengths of TCL. The Home Entertainment business, including TVs, can grow through this partnership. That is the background to this partnership. As for the scope of what business this covers, Horii will explain.
Thank you for the question. So this strategic partnership's scope includes TVs and home audio; those are the areas we assume will be included. As you pointed out, the details are still being discussed. At the appropriate time, we would like to communicate to you. For now, TV and home audio will be included in the scope.
Thank you. Second question about the game business. This was mentioned in the previous question. With the surging memory price, you have secured supply until the next year-end campaign. You might have secured supply, but will there be an impact from rising prices? For example, will PS5 see any price increases, or how about the timing of a successor being introduced? What will be the impact on the next fiscal year? Can you give us your assumptions, please?
For PS5 next fiscal year and beyond, what would be the impact there? We would like to inform you about business results for next fiscal year at the appropriate time. Our thinking is to share that since launch, the PS5 is now in its sixth year. We have established a robust ecosystem with 92 million unit-installed basis on a sell-in basis. The majority of the sales is software content and network service, areas expected to continue to contribute significantly without being affected by memory prices. Regarding new PlayStation hardware sales due to cost increases, there will be some impact; however, it is already in the latter part of the product cycle. Thus, it's expected that hardware sales will gradually decline. There are several options we can consider; that is our basic thinking. Moving on to the next question. I'm very sorry. Please ask both of your questions at the beginning. Please go ahead, Nakayama-san.
So this is Nakayama from Yomiuri. I have two questions. Number one, about music. The streaming revenue growth rate; do you think the music streaming service will continue to do well? We would like to hear your prospects. And about I&SS, the image sensor for mobile, do you have any background on the increase in the unit price of image sensors for mobile?
About I will answer the question on the music business first. The music market, we see will continue to grow in the mid- to long term. Of course, the extent of growth will differ due to the timing, but we believe there will be constant growth of about 5 to the middle to latter single digits. There are two drivers for this: First is the DSP platform that we offer the service on. The ARPU, or average revenue per user, is going up, and also the number of users is increasing, driving the growth. The second point about I&SS semiconductors, Horii will answer.
The sensor is the background for the increase in the selling price of mobile sensors. In smartphone products, the camera feature is a main reason for the price increase. Smartphone manufacturers are working to enhance camera resolutions and features. The image sensors we provide will see improvements in size, resolution, and new functionalities. The higher quality of large-scale image sensors is resulting in increased prices, which is contributing to our performance this year. Thank you.
All right. So we'll take another question. Yamamoto-san, please.
Yes. My name is Yamamoto. I would like to ask questions. About the structural reform and TCL, you have a strategic alliance, but the display to have higher resolution. In Home Entertainment, I think you have high resolution, which contributes to the technology as well as the common kind of R&D. Do you separate the two, the technology and the common R&D base, in order to reach the next phase of development? Regarding the strategic alliance, could you share your direction or strategy?
Yes. Thank you for the question. First, we have the basic agreement. Regarding the technologies and assets available through the joint venture, we're in discussions to aim for a final agreement. Once it is confirmed, we will communicate that information. Running short on time. The next one will be the last question. Shino-san of Asahi Shimbun, please. Shino-san, do you hear? Then we will move on to the next person from Mainichi Shimbun, Shino-san, please.
This is Shino from Mainichi Shimbun. Earlier, you talked about the PlayStation 5 life cycle, stating that you are entering the latter half. Last November, you mentioned the Japanese dedicated model for PlayStation, a relatively cheap, lower price model for the Japanese market. What is the reason for introducing this kind of model at this stage in the lifecycle? What will be the impact on the financial results? Has there been any impact from introducing this new model?
The introduction of the Japan model was to enhance the presence of PlayStation in the Japanese market. It was more affordably priced compared to the global model, and publishers and users appreciated that. After launch, in terms of sell-through, it has created a notable uplift. This was not a special model just for a seasonal effort, but for the mid- to long-term strategy in the Japanese market, we believe this has strategic significance. We want many users to buy this to encourage publishers to create great games. So, we expect this will have a mid- to long-term impact. Now it's time to conclude the Q&A session for the media. The Q&A session for investors and analysts will start from 4:45. Thank you for your patience. We will now begin the question-and-answer session for investors and analysts. I am Kondo from the IR Department, and I will be your moderator. The speakers will be the same three individuals as in the media session. We will now start the Q&A session.
I'm Ayada from JPMorgan. I have two questions. The first question is about gaming. The playtime and spending levels during the holiday season: Active users have gone up 2%, but playtime is flat, and software network revenue is increasing. However, in terms of volume, it seems to be diminishing. Is this due to the economic cycle, business cycle, console cycle, or people's engagement with other content? We would like your view on that. Your second question is more abstract. What impact do you foresee AI having on the entertainment industry? In music production and game development, I understand that 90% of creators are already using AI, so if there's more content created through AI, could that positively affect platforms like PlayStation and Crunchyroll? Conversely, could it mean users will engage less with more casual content, and how will this vary across music, anime, games, and video production?
Thank you for the question. About engagement in games during the holiday season, I think this is transitioning quite well. Of course, several factors influence playtime, but I believe the biggest factor is whether there are hit games. In the past, large-scale games have seen reduced engagement, while players are shifting towards new games. From a platform perspective, we see momentum, although it varies by game title. As we head into next fiscal year, numerous large-scale titles will be launched, which makes me optimistic. Regarding AI, it has varying implications across music, gaming, and animation. Long-term, I believe it's positive that more content will emerge. However, there are several areas to examine, especially how we develop and produce content. At this point, it's hard to determine the exact impact on costs. That said, it's clear that integrating AI into game production processes is crucial. We must be the ones disrupting existing processes rather than the ones being disrupted. Thank you. All right. Next question from BofA Securities, Mr. Hirakawa.
Yes, BofA Securities. My name is Hirakawa. My first question is somewhat abstract; this is the second year of the midterm business plan. Operating profit growth has been around 10% on average. This year, everything is progressing smoothly, but there are market concerns that next year could see difficulties due to memory price fluctuations and uncertain pricing movements, affecting potential profits. I would like to ask about the certainty and risks in your midterm business plan. What upside do you foresee? My second question is connected to what you've previously said regarding the image sensor and I&SS: I hear that you might see increases in both ASPs and volumes. Is this the main point you wish to communicate?
Thank you for the question regarding the midterm plan. We feel that things are progressing smoothly in the second year. About the concerns regarding memory prices, we get them. Looking at next year, we have a strong momentum currently, despite the memory cost increase. Managing this is important for us as we also focus on profitability. Our certainty for achieving our midterm plan varies by segment, but for the game division and Sony Pictures, next year's software lineup looks promising. We can dive into more details with the fiscal year 2025 results presentation. Regarding ASP and semiconductor volume, I will ask Horii to further elaborate on that.
In the speech, we mentioned that this year, we've observed strong momentum in the SP and volume sectors. Looking at next year, we believe we are positioned well. The memory market conditions affect businesses within the semiconductor sector and others like games. The range of options varies based on the final product manufacturers' strategies regarding memory conditions. We prioritize close communication with customers to understand their strategies effectively. Therefore, I suspect we are in a more passive mode regarding this because of the particular business characteristics. Next year looks promising due to the strong foundation we have.
Next from Mizuho Securities, Nakane-san, please.
Two questions. First, about the share buyback expansion: Before you used it up, you expanded the facility for the first time. I believe this reflects higher cash flow and concerns about the stock price being low. What discussions occurred during the Board meeting regarding this expansion? What is the message behind the facility increase beyond what was released? Second, regarding the separation of Home Entertainment: In terms of development, design, and manufacturing, I think it's cleanly separable. But for sales, there’s a common platform for domestic and overseas. Can you provide insight into how sales will be handled for next fiscal year? Moreover, with ET&S inclusive of structural reform, could there be adjustments made?
Thank you for the questions. First, about increasing the share repurchase facility, the better-than-expected business results and cash flow are the driving factors behind that decision. Our target window is until mid-May. We've decided on this JPY 50 billion increase based on the company's momentum. This is the message we want to convey with this increase. Regarding the ET&S for next fiscal year, it will continue to operate with its budget intact. We will manage the business in that manner. The joint venture is slated to start from April of fiscal '27, and there will be no immediate additional structural reforms. Adjustments will always depend on the business environment, which we've actively managed. SMBC Nikko Securities, Katsura-san, please.
I have two questions on game and semiconductor. Regarding gaming, how do you see the profits in the third quarter compared to the previous quarters? I believe the third quarter profit has declined in comparison to the first and second quarters, possibly due to hardware promotions and procurement strategies to secure memory inventory. Also, might you have added countermeasures to address the results moving forward? For I&SS, you mentioned measures will be taken in the fourth quarter. If you could share the scale of this measure moving towards next year, it would be appreciated.
Thank you for the question about third-quarter gaming profitability declining in comparison to the first and second quarters. The main reason was the end-of-year promotion of the hardware. Along with the Japan domestic model, we ran global promotions, leading to many users purchasing the console. While this caused profit to decrease in the third quarter, it will positively contribute to the mid- to long-term lifetime value. We do not have any extraordinary plans for inventory as the fiscal year ends. I&SS has factored some of that into the fourth quarter. Horii will provide further details.
As we have said, there is a business balance within the I&SS segment, and we've been processing some accelerated asset depreciation. This onetime cost of JPY 20 billion will be factored into the fourth quarter.
We have limited time remaining, so this will be the final question.
Yes, my name is Munakata from Goldman Sachs. You've been discussing generative AI. I'd like to ask about that. Last week, Project Genie was announced. Generative AI holds both opportunity and threat. In the stock market, there are views that generative AI can lead to the rapid creation of interesting games. Those who feel the threat is stronger: How do you consider the strengths of your game studios and development capabilities in relation to generative AI? I appreciate your insights on this.
Regarding generative AI, there are various trials ongoing, currently in test stages. Several interesting developments are being explored, though they are not yet commercialized. In gaming, AI can serve as a toolbox, which we consider a strong asset in our approach. The tool itself won't be a business; we need the sensitivity and creativity of artists to integrate it into a compelling entertainment offering. Therefore, I don’t view AI as a threat but rather as a way to help creators effectively use AI to produce commercial products. That aligns with Sony’s mission. Thank you. With that, we would like to conclude the earnings announcement of Sony Group.