Sony Group Corp (SONY) Q3 2026 Earnings Call Transcript

It's now time to begin the Sony Group Corporation earnings announcement. I am Ishii from the Corporate Communications Department, and I will be your moderator today. Today, Lintel, Corporate Executive Officer and CSO, will present the FY2025 third quarter results and four-year forecast, followed by a Q&A session. the entire session is expected to last 65 minutes to ensure our international audience can hear the presentation in ms tau's own words the english language earnings presentations will be delivered via a pre-recorded video today i will explain the content shown here sales of continuing operations

seen FY25 Q3 increased one percent compared to the same quarter of the previous fiscal year to 3 trillion 713.7 billion yen and operating income increased 22 percent to 515 billion yen both were record highs for the third quarter net income increased 11 percent to 377.3 billion yen The financial results by segment are shown here. We upwardly revised our four-year sales forecast from the previous forecast 3% to 12,300,000,000 yen, operating income 8% to 1,540,000,000 yen, and net income 8% to 1,130,000,000 yen. we increased our forecast for operating cash flow nine percent to one trillion six hundred and thirty billion yen the forecast for each segment is shown here now i will turn to an overview of each business first is the gnns segment fy25 q3 sales decreased four percent year-on-year primarily due to lower hardware unit sales operating income increased 19 percent 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 We revised our FY25 sales forecast 4% from the previous forecast to 4,630 billion yen and our operating income forecast 2% to 510 billion yen. 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 the last December to a record high of 132 million accounts and total play time for the quarter increased 0.4 percent 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 install 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 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 install base to date and striving to further expand our software and network service revenue. In the studio business, Ghost of Yotei, a temple 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 5th 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 music segment primarily due to an increase in live events sales and streaming revenue in recorded music FY25 Q3 sales increased 13% year-on-year operating income increased 9% reaching a record high for the third quarter excluding one-time items on the US 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 2 trillion 50 billion yen and our operating income forecast 16% to 445 billion yen. We incorporated a remeasurement gain of approximately 45 billion yen 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 the number one globally in its first week on Spotify and Peso Pluma's collaborative album Dysnasia 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 a 68th annual Grammy Awards held in the US earlier this month. with Bad Bunny winning album of the year for Debbie Diras masfotos as Beyonce did last year in visual media and platform the theatrical release of demon slayer Kimetsu no Yaiba the movie Infiniti's Castle which has exceeded 100 billion yen in global box office revenue continue to contribute and the mobile game fade grand order which celebrated its 10th anniversary in July 2025 contributed more to our results than expected next is the picture segment FY25 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 one licensing agreement with netflix through this agreement netflix will stream on a global basis sp's future theatrical films and the pay one window the initial window within 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 one 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. Schwarz the creator of peanuts which 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 strengths 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 of 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 ETNS segment FY25 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 four-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 remains 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 31st 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 20s 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 two 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 INSS segment FY25 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 2.80 billion yen and operating income forecast 13 percent to 350 billion yen 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 customer and a higher die-sized sensor. Because recent orders are stable, we believe that the supply chain concerns we mentioned at the previous earning announcement have receded, and we have awkwardly 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 smartphone 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 earning announcement as a part of that we have incorporated additional expenses for resource and assets optimization of the relevant business in our forecast for FY25Q4. We will continue to focus on improving our business portfolio and raise our profitability. To summarize the GNNS music and IMSS segment 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 increase the

maximum of our share repurchase facility established in november 2025 from 100 billion yen to 150 billion yen this concludes my remarks that was ms tau following the presentation we will have a Q&A session for the media at 4 20 p.m. and for investors and analysis at 4 45 p.m. each Q&A session is scheduled to last approximately 20 minutes for those who have pre-registered to ask questions please click the join webinar link and stay online while you wait regarding the procedure and precautions for asking questions please refer to the invitation sent to you in advance please wait the session will resume shortly thank you for reading we'd like to begin the media q a session shortly

please wait a few moments thank you for reading we'll start the q a session first we'll introduce you today's speakers chief financial officer cfo 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 Hori. We will take questions from the media. Keep questions up to two per person. Please click Raise Hand button on the Webex screen if you have questions. The first question is from Toyo Kizai Umegaki-san. Yes, I'm Megaki from Toyokezai. Can you hear me? Yes. All right. So I'd like to ask two questions. The first question is about Marathon, and it's going to be released on March 5th, 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 several cases that have been stopped short, but what kind of learning do you have? And for the live service game, and what is the strategic significance of having that? And this kind of a 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 the marathon, well, it has the user tests, and then from the users had feedback for the marathon. and in the game so what was a good point and not good points and such kind of a feedback we had taken into consideration and we had modified and this time around so after the modification we are very confident to release it on March 5th and live service the game's significance you ask but here what is It's most important for us is that the live service is a recurring revenue, and recurring revenue means that the hit driven, and if it comes a hit, then for a year it can bring revenue. If not become a hit, then no revenue. So it's such a, not the volatility high studio, but it's going to give us a constant amount of revenue every year. So that's the merit of having a hit live service. But, well, it's not that we want to have too many of them. It's not what we want to have. So the ideal is that so-called AAA and live service game would become integrated into a portfolio management style. That's it for me. And the second question is about your stock price. And you had announced your earnings results, and it was a 3 yen plus, but it's almost flat. So that the market valuation is quite severe, I think. And the stock performance is not good because the memory has risen. But it's rather the Sony Group, it seems that there has been a harsher view on the Sony Group. So what do you see as a CEO? And you have announced the share buyback. But the market capitalization, in order to raise the market capitalization, if you have any continuous way to keep that going up. All right, thank you for your question. And about the stock price, so we had several information revisions, but it's not performing well, so I think you have various thoughts about that. But one thing is that memory, the concerns for the memory supply. And as the industry, yes, that is one concern. And the other is the entertainment stock. Generally speaking, it's because the capital AI-related, it goes to the AI-related. So I think that's why. And then for us, what we can do is that as a business, we look at the fundamentals to make it even stronger and the profitability we would improve so that the portfolio can be optimized. And for us, the Sony long-term strategy, we would believe in that so that we would implement that so that the business performance can be improved and such measures would be communicated message to the stock market so that the stock market would value our approach. And we are going to put our efforts into it. That's all for me. The AI, well, excuse me, but that's the end of your two questions.

Next question. Yoshino-san from Nikkei, please. Yoshina from Nikkei can you hear yes we hear I also have two questions first about ETNS structural reform today you have mentioned that the TV business you're going to move to a joint venture with TCL and 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 details are being still discussed so to the extent possible can you describe the range that this covers and also smartphone also positioned as structural reform business and you have hither to explain that they will be continued has there not been any change to that status is an option to collaborate with external source thank you for the smartphone we don't have such plans so TC with TCL we have a strategic partnership for home entertainment so this is about the review of portfolio and we are constantly doing that to deal with the changing business environment so optimizing that is the management mission so sony has assets that we have accumulated over many years and we're combining that with the strengths of tcl and so home entertainment business including tv can grow more through this partnership that is the background to this partnership and the what the scope of what business to be covered what do you will explain thank you for the question so this strategic partnership the scope of that as you point out it's tv and home audio those are the areas that we assume will be included as you point out the details are still being discussed so after appropriate timing we would like to communicate to you at this point of time tv and home audio will be included in the scope thank you second question about the game business so this was mentioned in the previous question so with the surging memory price so you have secured the supply until the next year and campaign so you maybe have a security supply but would there be impact of the rising prices for example PS5 any price increases or the successor the timing that it will be introduced and what will be the impact to the next fiscal year can you give us your assumptions please so ps5 next fiscal year and onwards what would be the impact there so for the business results for next fiscal year we would like to inform you at that appropriate time but But our thinking is what we'd like to share with you. That is PS5 since launch, it's in the sixth year, so 92 million units install base on a sell-in basis we already have established. So we have been able to develop a very robust ecosystem. And this fiscal year as well, the majority of the sales is the software content and network service and these areas next fiscal year onwards are going to continue to make significant significant contributions and that will be the part that will not be impacted by the memory price now as for the new PlayStation hardware sales due to cost increases there will be some impact however it's in the latter part of the life cycle so that means that in terms of hardware itself it's been expected all along that it will gradually decline or slow down so there are several or a wide range of choices or options that we can take so that's our basic thinking there thank you moving on to the next question So, I'm very sorry.

Please ask both of your questions at the beginning. Yomiuri newspaper, Nakayama-san, please. Nakayama-san, do you hear me? So, this is Nakayama from Yomiuri. Do you hear me? So, I have two questions. Number one, about music, the streaming revenue growth rate. So do you think the music streaming service will continue to do well? We would like to hear your prospects. And about INSS, the image sensor for mobile, do you have any background on the increase in the unit price of image sensors for mobile? I will answer the question on the music business first. the music business 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 a constant growth of to about five to middle to latter single digit and there are two drivers to this first is dsp that is platform that we offer service on the ARPU or ARPU is going up and also the number of users going up so the average revenue per user and the number of users going up is driving the The second point about INSS semiconductor, Ori-san will answer, the sensor, so this is the background of increase in the selling price of mobile sensors. As you know, in smartphone products, the camera feature is a main reason for increasing price. So the smartphone manufacturers are working to increase the camera resolutions as well as the camera features. The image sensors that we provide to the manufacturers, we want to increase the size as well as increase the resolution and add new features. So large-scale image sensors as well as increased performance is leading to higher price, and that is really contributing to our results this year. That's all. Thank you.

All right. So we take another question. so free as uh Yamamoto-san please yes my name is Yamamoto so uh let me ask questions so the about the structural reform and TCL so we have the strategic alliance but the the display to have the higher resolution and the whole entertainment I think though you have the high resolution I think it is contributing here that the technology and also the common kind of R&D do you separate the two technology and the common R&D base in order to have the next phase of development so about the strategic alliance would you tell us your direction or your strategy yes thank you for the question so first so we have the basic agreement and for the technology and for what kind of an asset can we have to the joint venture to have the definitive contract so we are in discussion in order to aim for the final agreement so if it is

confirmed then we would tell you when it is confirmed running short on time so the next one will be the last question Shino-san of Asahi Shimbun please Shino-san do you hear well then we'll move on to the next person from my Maynichi Shimbun, Seno-san, please. Do you hear us, Seno-san? Can you hear? Yes, we can hear you. Excuse me. This is Seno from Maynichi Shimbun. Earlier you talked about the PlayStation 5 life cycle that you're entering the latter half of the life cycle. But last November, you talked about the Japanese dedicated model for PlayStation. A relatively cheap, lower price model for the Japanese market. So what's the reason for introducing this kind of model in the latter part of the lifecycle? And what will be the impact to the financial results? Has there been impact from introducing this new model? Thank you. So the Japan model introduction, well, that was to enhance the presence of PlayStation in the Japanese market. It's one part of that effort. Compared with the global model, it was more reasonably priced. And so publishers and users appreciated that more affordable price. And after launch, in terms of sell-through, it has created an uplift. now so this was not a special model just for that a seasonal effort but for the mid to long term for the japanese market we think that this had the strategic significance so we want many users to buy this so that publishers will make great games so we think in that regard this will have mid to long-term impact.

Now it's time to conclude the Q&A session for the media. So the Q&A session for investors and analysts will start from 45 past 4. We're starting the Q&A sessions for investors and analysts in due course so please wait until we resume. For waiting we will now begin the Q&A 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 so please keep to two questions and please ask both of the questions at the beginning please click the raise hand button in the web EX screen if you have any questions jp morgan with ayada-san please thank you i'm ayada from jp morgan i have two questions the first question is about gaming the play time and so what do you think about the status of play time and spending in the holiday season active users have gone up two percent but play time is flat, and software network revenue is going up, but thinking about the price up, I think in terms of value or volume, it's more or less flat. So it seems like it's dwindling a little bit. Is it because of the economic cycle, business cycle, or console cycle, or is this an impact from the title lineup or are people using time for things other than game so we would like your take on that your second question so this might be an abstract question the impact of AI to the entertainment industry how should we see that the for music production and game development already 90% of creators use AI, so based on the data, so by the creators using AI, if there's more content, that would be a very positive effect on platforms such as PlayStation and Crunchyroll, or if users use more of their casual, more time in casual content using AI, would that be negative? So I think the repercussions will be different, whether it's music, anime, games, or video production. So please share your view. Thank you for the question. About the engagement of games in the holiday season, I think this is transitioning quite well. Of course, the playtime. I think there are many factors influencing the playtime. But I think the biggest factor, I think, is whether there are hit games. Up till now, the games, maybe the large-scale games, which everyone has been playing up till now, the engagement has gone down, and instead the players are playing new games. As a platform, we see a momentum, but depending on the game title, how that is played and the playtime will be different. Towards the next fiscal year, the large-scale titles will be launched, so I'm very optimistic about this. And about how we see AI, as you say, music, game, and animation, how AI is used or the positioning of AI is different. There's high affinity between AI and game and animation. In the long term, I think it's a very positive thing that there will be more content. but there would be impact in many areas especially how you develop and produce so this process from idea to game i think would be changing but it's still early in the day to say what the impact would be and what would be the impact on the cost so at this point of time it's difficult to really say but what we can say right now is to use a lot of AI so we promote using AI especially in

game production and if that disrupts the existing process we should be the one disrupting rather than the one being disrupted that's all thank you thank you all right so next question from yes voa securities my name is hirakawa so our first question is well it's a rather abstract question but this is the second year of the mid-term business plan but the operating profit the growth is like a 10 percent average as you go and then this year it has progressed very smoothly and the concern from the market is that the next year the profit level because of the memory or the untransparent price movements then it might not be so smooth then what i want to ask you hear is now in the midterm business plan so what kind of a certainty do you have and what kind of a risk factors do you have in achieving or what kind of upside do you have so if you can add to that is the first question and the second question is about what you have said so image sensor INSS so what I've heard is a high-end is so ASP rise and the volume expansion you can have both so that I think was the main thing that you wanted to message to us okay thank you for the question and about the midterm plan so the second year and the year going on quite smoothly yes that That is the feeling we have about the memory price surge, and we can understand the concern from the market about this, and this earnings results for the next year, I think we can go into this more deeper, but basically speaking, we would have the momentum very strong here, and the memory cost rise, so we have to manage that, and that's the kind of direction we have and the profitability of course we have in mind and for the attainment of the midterm plans how certain we are or how confident we are so it depends on each business segment but let's say game and Sony pictures so next year's software lineup is quite good so for those segments I think we have quite a positive a kind of outlook and for the detail I don't think I can go into here so when the earnings results for the 2025 fiscal year i can maybe tell you more about it and the esp and the semiconductor and the volume okay for this question i would like to ask hori-san to answer all right thank you for the question so in the speech we have said that this year but we have seen this year okay and what we are seeing SP and the volume also we have a momentum so for next year it's like a launch pad let's say that it's in a good position so I think we can say that we are in a positive position and having said that in the semiconductor business there's other business like a game weekend and so memory market condition effect and let's say the selection or the options range is different is what I feel so the final product manufacturers well so what kind of our measures would they be taking because of this memory market condition and we would like to have a close contact communication with the customers so that we can have a good understanding of each of the customers we have and that's the procedure we take but i think we are rather in a passive mode concerning this because of this kind of a characteristic business and for next year i think we have a good launch pad in place and that's exactly as what you have pointed out thank you next from mizuho securities nakane-san please thank you can you hear yes we hear you thank you

two questions yes we hear you thank you two questions first so expanding the share buyback so before you used it up the facility is being expanded I think it's the first time you're doing that you have higher cash flow stock price is low I think those are the backgrounds so talk about what discussions you had in the board meeting and what's the message of expanding this facility in addition to what's in the release that's the first question second about the home entertainment separation so from development design manufacture that part I think it's easy to separate cleanly but for sales you have the common common platform and domestic and overseas I think it's still quite a huge size I understand that the details are still to be worked out but for the next fiscal year in terms of sales how is it going to be handled and on the etns side inclusive of structural reform is there a possibility of some adjustments to be made give us some clues please thank you for the questions first about increasing the facility to repurchase shares so as you say the business results and the cash flow is better than anticipated so we want to increase our returns based on that but in terms of the window that is up until middle of May so 50 billion increase is what we've decided on this time so the companies momentum of earnings and the fundamentals we are confident about that that is the message that we would like you to take from this increase in the facility about the ETNS for next fiscal year basically ETNS will continue to operate it will have its budget in the same way and we will communicate in that way for the joint venture it's to start from April of fiscal 27 so in terms of the additional structural reform for the portfolio it's always dynamic so looking at the business situation it's our job to optimize and it's one of the our main missions. As of now, nothing has been decided yet. That's all. Thank you.

Thank you very much. SMBC Nikko Securities, Katsura-san, please. So, I'm Katsura from SMBC Nikko Securities. I have two questions on game and semiconductor. about the gaming question this quarter the how we see the profit the third quarter so the compared to the real profitability of second and third quarter first and second quarters I think the third quarter profit has gone down this is about about the domestic version of her hardware and you did also promotion activities and also the procurement side there has been maybe you purchased a memory in order to secure the inventory so the landing of the third quarter and also the full year so the postponement of first party title might be a negative factor so these numbers have seemed a little bit low so maybe you have included some of the countermeasures towards the next term and the second point is I and SS you said you will be taking measures in the fourth quarter so if you can say we would like you to share us the scale of this measure so my question is about your plan towards the next year. Thank you for the question. About the third quarter profitability for gaming going down compared to the first and second quarter, so the main reason was the end of the year sale promotion of the hardware. In addition to the Japan domestic model, we did global promotion, and that led to many users purchasing the console. And due to that, the profit went down in the third quarter, but this will contribute to the mid- to long-term lifetime value. And towards the end of the fiscal year, as of now, the inventory, we do not have any plans to do anything extraordinary on the inventory. INSS, we have factored in part of that into the fourth quarter. Hori will respond. So as we have explained, the business balance within INSS segment and some of the asset depreciation amortization done in acceleration. So this type of treatment is currently being processed. And about the scale, about $20 billion. So this one-time cost of $20 billion is factored into the fourth quarter.

All right. So we have not much remaining time. so the next question is going to be the last excuse us but please keep your question just to one so um it's um from goldman sachs please yes my name is from goldman sachs thank you very much for giving this opportunity to ask question i think you have been saying about the generative ai i like to ask question about that and so last week so project genie was announced and And basically speaking, so general AI, generative AI, I think is an opportunity and also a threat. So in the stock market, so the generative AI, so the creation might be done by that, so that a very interesting game can be made in an instant, so that I think a threat is more strong here. But in the game creation, so there has been some comments that to have it in a positive manner, but with the genitive ai becoming developing so what is the strength of your game studios and the game development what is your strength in that so i appreciate you to ask to answer this question thank you well but the generative ai so in the very various ways there are trials going on and now it's in a test stage i think and there are very interesting things that's happening but before I think it's before the commercialization and as for a game it's not just game but so AI I think it can be in a toolbox that there's a very strong tool in the toolbox that's kind of a feeling we have against AI so to itself it's not going to be a business so I think we need the sensitivity of artist and the tool to integrate in order to have another business chance or to have entertainment so that's the kind of understanding we have in that sense ai i don't think it's a threat but so that the creators can use ai fast way and then we are going to help them make it the commercial product so i think that's a sony's mission thank you With that, we would like to conclude the earnings announcement of Sony Group.