Lin Tao:

Hello, everyone. Today, I will explain the content shown here. Sales of continuing operations for the quarter increased 5% compared to the same quarter of the previous fiscal year to JPY 3,107.9 billion and operating income increased 10% to JPY 429 billion. Both were record highs for the second quarter. Net income increased 7% to JPY 311.4 billion. The financial results by segment are shown here. As for our full year result forecast, we upwardly revised sales from our previous forecast 3% to JPY 12 trillion, operating income 8% to JPY 1,430 billion, and net income 8% to JPY 150 billion. We expect that the impact of additional U.S. tariffs on the operating income of our continuing operations, to decrease JPY 20 billion from our previous forecast to JPY 50 billion, and we have reflected impact in the forecast for each segment from this quarter. We upwardly revised our forecast for operating cash flow 18% to JPY 1.5 billion. The forecast for each segment are shown here. Now I will turn to an overview of each business. First is the G&NS segment. FY '25 Q2 sales increased 4% year-on-year primarily due to the growth of network service revenue and the software sales. Despite the impact of the increase in sales, operating income decreased 13% year-on-year. This was primarily due to the recording of approximately JPY 49.8 billion in nonrecurring losses resulting from an impairment of intangible and other assets and the correction in the amount of previously capitalized development costs. Excluding these nonrecurring items, operating income would have increased 23%. We upwardly revised our sales forecast 3% from the previous forecast to JPY 4,470 billion. This is primarily due to the impact of foreign exchange rates. Despite the negative impact of the nonrecurring items and the inclusion of a JPY 30 billion tariff impact that we are recording from this quarter, our JPY 500 billion operating income forecast is unchanged from the previous forecast. This is primarily due to the positive impact of foreign exchange rates. Our PlayStation platform continues to demonstrate its strength as the best place to play and best place to publish. User engagement trended well with a number of monthly active users across all of the peers in September, increasing 3% and compared to the last September to 119 million accounts, and total play time for the quarter also increased 1% year-on-year. Game software and network service sales are steadily growing. We expect this trend to continue in the second half due to a continued shift to higher tiers in our network service business and the contribution of first-party titles. As for PS5 hardware, we plan to expand the installed base during the year-end sales season while continuing to balance that expansion with the profitability of the entire segment. Although performance varies by title, our live service game overall accounted for more than 40% of our first-party software revenue, similar to the previous quarter and are a recurring source of revenue. Regarding Destiny 2, partially due to the changes in the competitive environment. The level of sales and user engagement have not reached to the expectation we had at the time of the acquisition of Bungie. While we will continue to make improvements we downwardly revised the business projection for the time being and recorded an impairment loss against a portion of the assets at Bungie. On the other hand, Helldivers 2, which was also released for Xbox in August of this year, is doing extremely well, not only attracting new users on Xbox but also seeing increased engagement from existing users on PS5 and PC. This resulted in a significant increase in sales of the title year-on-year. MLB The Show 25, released in March also continued to perform well during the quarter. In a single-player AAA title space, following the release of Death Stranding 2: On The Beach in June, we released Ghost of Yotei in October. Ghost of Yotei surpassed 3.3 million units sold globally as of November 2, becoming a major hit like its predecessor. Building on this recent progress, we aim to strengthen our studio business and expand our IP franchises through continuous learning and improvement. Next is the Music segment. FY '25 Q2 sales increased 21% year-on-year, and operating income increased 28%, reaching record highs for the second quarter. This was primarily due to a higher Visual Media and Platform revenue, driven primarily by the success of the theatrical release of Demon Slayer: Kimetsu no Yaiba Infinity Castle. It was also due to an increase in streaming revenue. On a U.S. dollar basis, streaming revenue for the quarter increased 12% year-on-year in recorded music and 25% in Music Publishing. We have upwardly revised our full year forecast for sales 6% to JPY 1,980 billion compared to the previous forecast and operating income 7% to JPY 385 billion. During the quarter, SMEJ made great strides, recording its highest ever quarterly sales and operating income and contributing significantly to the growth of this segment. Demon Slayer produced by Aniplex became a global hit due to our collaboration with Toho for distribution in Japan as well as the strengthening and expanding of distribution overseas by Crunchyroll and Sony Pictures. As of October 13, 77.53 million people worldwide, including in Japan, have seen the movie and the total box office revenue has exceeded JPY 94.8 billion. Kokuho has enjoyed a long run in theaters in Japan and has captivated a large audience. being selected as Japan's entry to the 98th Academy Awards in the Best International Feature Film category. The successes of Demon Slayer and Kokuho are examples of how we can increase the value of IP by discovering appealing IP and combining them with the production capability of talented creators. We look forward to attracting not only fans but also many creators and actors. In recorded music, IRIS OUT and JANE DOE by Kenshi Yonezu, an artist affiliated with SMEJ, have been breaking records on music charts, both in Japan and overseas. Thanks to synergy with the theatrical release of the anime Chainsaw Man, the movie Resi Arc. Outside of Japan, SMG is also achieving very strong results. The global success of artists and songwriters such as Tyler, the Creator and Bad Bunny, has led to a double-digit increase year-on-year of sales and operating income for the quarter. In addition, SMG is further enhancing its relationship with DSPs. It entered into licensing agreements with Spotify during the quarter and in collaboration with several other record labels agreed to support Spotify's efforts to ensure that AI is used in a manner that will benefit artists and songwriters. Next is the Picture segment. FY '25, Q2 sales decreased 3% year-on-year and operating income decreased 25%. This was primarily due to the impact of a decrease in sales from theatrical release, which benefited from hits like it ends with us in the same quarter of the previous fiscal year. Partially offsetting the decrease in operating income was the impact of higher sales at Crunchyroll. There is no change to our full year forecast for sales and operating income. Crunchyroll continues to work to enhance the 360-degree IP experience of anime fans through the theatrical distribution of Demon Slayer, the launch of Crunchyroll Manga service and other efforts. Crunchyroll Manga, which currently digitally distributes hundreds of popular Japanese manga titles, has been positively received by fans and publishers since its launch in October. We expect it will contribute to an increase in fan engagement and growth in subscribers. In Television Productions, new season of popular existing series were released this quarter such as Doc, Gen V and Twisted Metal. In Motion Pictures, productions has begun on the major titles, Spider-Man: Brand New Day and the next Jumanji, which are scheduled to be released next fiscal year. Fans are easily awaiting the 2 titles with 5 years having passed since the previous Spider-Man film, Spider-Man: No Way Home and 7 years have passed since the previous Jumanji film Jumanji: The Next Level. Next is the ET&S segment. FY '25 Q2 sales decreased 7% year-on-year, primarily due to a decrease in unit sales of TVs. Operating income decreased 13% year-on-year, primarily due to the impact of the decrease in sales, partially offset by reductions in operating expenses. We have slightly increased our full year forecast for sales from the previous forecast to JPY 2,300 tillion, and we have decreased our operating income forecast 11% to JPY 160 billion, reflecting a JPY 20 billion impact from tariffs from this quarter. In the Imaging markets, demand has slowed in 2 regions. China, where government subsidies that last through the first quarter ended June 30, significantly declined and the U.S. primarily due to the impact of additional tariffs. However, this decrease in demand is essentially in line with our previous forecast, and global demand remains solid, primarily because of Asia. The severe operating environment for TVs and smartphones continues, but we are adapting by proactively reducing operating expenses and have been able to minimize the impact on profitability. At the segment level, there are no major changes to the demand outlook for the year-end sales season and second half of the fiscal year. We plan to continue to control costs and inventory and operate our business cautiously. In our Sports business, which is a growth area, we completed the acquisition of STATSports in October. STATSports excels in active tracking technology, which collects and analyzes real-time data on athlete's physical condition and performance during games. By combining this data with the optical tracking technology of Hawk-Eye and KinaTrax, we aim to provide industry-leading sports data solutions to teams and athletes around the world. We also hope to accelerate the growth of our sports business overall. Last is the I&SS segment. Sales for the quarter increased 15% year-on-year and operating income increased 50%, both reaching record quarterly highs for the segment. This was primarily due to a higher unit prices resulting from larger-sized sensor for mobile devices and increased sales volume of sensors for consumer cameras. We upwardly revised our full year forecast for sales 2% to JPY 1,990 billion and operating income 11% to JPY 310 billion, primarily due to the impact of foreign exchange rates. Based on the trends in the final product market and the demand forecast from our customers to date, we have decided not to include any impact from tariffs in this forecast for this segment. The smartphone market continued to show signs of gradual recovery on the global basis. Sales of mobile sensor during the quarter increased significantly year-on-year due to higher unit prices resulting from larger sensors being used in new products by our major customer and a higher shipment volume than our previous forecast. In addition, growth of the market for cameras that use new video shooting styles such as handhelds contributed to the growth in sales. Our customers might have brought forward the purchase of components during the first half of the fiscal year due to the additional tariffs and other factors. Therefore, we have kept our fiscal year sales forecast unchanged from the previous forecast when the impact of foreign exchange rate is excluded. We expect sales for the fiscal year to increase an already significant 11% from the previous fiscal year. During the third quarter ending December 31, 2025, we plan to carefully assess the possibility of another upward revision. The higher sales of image sensors and our fixed cost management through an accelerated review of low-profit business and the shift of resources and costs to priority areas are contributing significantly to profit growth this fiscal year. During this mid-range plan period we intend to continue to focus on improving the efficiency of business operations and product development. In the next mid-range plan period, we aim to build on those efforts by continuing to work to improve the profitability of the business by considering measures that balance business expansion with improved efficiency of capital expenditure. To summarize, excluding nonrecurring items, the G&NS music and I&SS segment all achieved record high operating income during the quarter and we believe that our business momentum is strong. Looking ahead to the second half of the fiscal year, given the uncertain business environment, we intend to continue to operate our business cautiously while striving to steadily achieve results. The upwardly revised operating income forecast for this fiscal year presented today, projects an average annual growth rate of operating income of 18% compared to the final year of our fourth mid-range plan and a cumulative operating income margin for the fifth mid-range plan to date of 11.3%. This demonstrates that we are making steady progress towards achieving the targets of our fifth midrange plan. As for shareholder return, we established today a share repurchase facility of a maximum of JPY 100 billion to be executed by May 2026. And we successfully completed the partial spinoff of the financial service business on October 1. We would like to reiterate our sincere gratitude to our shareholders and investors. This concludes my remarks. Operator: [Operator Instructions] To answer your questions we have on the podium Lin Tao, CFO, Corporate Executive Officer; Hirotoshi Korenaga, Senior Vice President in Charge of Accounting; Naoya Horii, Senior Vice President in charge of Corporate Planning and Control, Disc Manufacturing Business and Storage Media Business. [Operator Instructions] The first one is from NHK, Mr. Taruno -- or Ms. Taruno, please. Unknown Analyst: I have 2 questions. You have just explained the results this time in and out of Japan, what about the market conditions as you see it, including the consumer behaviors and activities. That's my first question. And the second is that Demon Slayer or Kokuho have become such a big hit. There's a music and pictures related content business. How are you going to grow these content-related businesses? And what kind of initiatives are you going to continue? Lin Tao: Thank you for your questions. First, about the market conditions and the business sentiment in and out of Japan. For Japan and the U.S., it seems that there's some stability quite recently. However, we are doing business globally and U.S. economy is something that we focus on. In the latter half -- towards the latter half of the year, it seems that there's signs of slowing down in U.S. economy. In terms of inflation, inflation rate is going up and the job applicant ratio is coming down and statistics because of the closure of the government services, we don't have much data, but it seems to me there's a lack of transparency or certainty. Towards the latter half of this year, we are being cautious and trying to be conservative in our business operation. About your second question, Demon Slayer and Kokuho, thanks to your patronage, in Japan and outside Japan, they have become such a big hit. And then they contributed a big positive impact on our business. Going forward, content -- as content IP, we will continue to adopt the titles to the films and the motion pictures. And then partnering with the distributors, both in Japan, we would like to grow this business. Well, not only Demon Slayers, but especially in Hollywood the box office revenue -- very high box office revenue was achieved. And I think culturally, this gives us a big power. So Japanese content make it successful in Hollywood going forward is good not only for Sony, but for content publishers of Japan as a whole. Going forward, in addition to the deployment of IPs, 360 degrees utilizations and LPs, merchandising, we will make an effort to expand this. Thank you very much. Operator: We will take the next question, Yoshida-san from Nikkei. Unknown Analyst: This is Yoshida from Nikkei. I do have 2 questions. The first one is as follows: the live service in game business and the development status of Marathon and whether you wish to launch it this year, have you made any changes to the plan? That's the first question. And then also looking at the actual performance of add-on service from July and in September and you recorded the underperformance for the first time in 13 quarters. And then this might have been attributable to the delay in the live service or new title releases? That's the first question. And second question, so you said that the Demon Slayer has really culturally significant impact. And what is the reason in your view that these titles are exceeding your expectation in terms of performance? Lin Tao: Thank you very much for your question. The first question with regards to the developments set of Marathon is we are still working on it. And from October 22 and in 28 for a week, there was a technical test that involves 80,000 people. And as a result, the gameplay and then retention, those are the key KPIs that we tested on. And then we are in the process of analyzing the performance against those KPIs. And as needed, we will make corrections. And then we are fully dedicated to launching the title as scheduled. And then yes, we assume that we will launch this within this year. And that is included in the forecast. And with regards to add-on compared to last fiscal year, there has been a reduction, as you mentioned. But with regard to add-on and whether it's add-on or full game -- and it really depends on the most popular titles, most played by the gamers and users. So we don't believe that this represents a reduction of slowdown. And as we gear up for the year-end sales season, and we have launched new titles, and I hope that the performance will be even strengthened. And then second question. So Demon Slayer upside and the reason for it. First, as a content business or thinking about the nature of the content business, it's really difficult to accurately predict the performance. And then the previous title was really successful during the pandemic. And at the time of the launch, we had a lot of confidence. However, in this final exceeded the expectation, and this could be attributable to the great performance in overseas market. In Hollywood, and we generated top growth in revenue, and that was unprecedented. So from that perspective, we were able to deliver performance that was unexpected. Operator: Let's go to the next question from Toyo Keizai, Umegak-san. Unknown Analyst: I have 2 questions. The first question is about Music segment. 25 million, I think, was the upward revision that you made in operating income. I wonder how much of the contribution was from the Demon Slayer. I understood that it was already reflected in the forecast. But in the visual media platform, it was like a JPY 200 billion revenue. So what kind of contribution did this upside impact to make. Now the next is on Pictures. The JPY 250 billion was the operating income. I believe that in the first half, you had a little bit of a difficulty. The TV production, I understand is kind of going down. You mentioned about the sequels, but I'm wondering what the sequels -- how the sequels will be contributing. Those are the 2 questions. Lin Tao: Thank you very much for the questions. On Music, in the Music segment, the upward revision was the JPY 25 billion upward revision that we meant. The contributions were from Demon Slayer and Kokuho and the streaming music. Kokuho and Demon Slayer, together they contributed about 50% of the upside impact. And as for the Pictures, the full year forecast for the first half -- the Picture segment -- the nature of the Picture segment tends to have this launch in the latter half rather than in the first half. So please understand that this is a seasonal impact. So TV production and movie production, structurally, we are seeing the depressed business of the industry. So how can we control the cost and produce projects or items that will be very successful? As for the Pictures segment, Crunchyroll is one of the driving force for growth. The subscribers as well as the sales have both increased since the previous -- from the previous year. So in the Pictures segment, Crunchyroll will be focusing on that in order to grow the business. Operator: Let us proceed to the next question from Yomiuri Newspaper, Nakayama-san please. Unknown Analyst: My name is Nakayama of Yomiuri Newspaper. I have 2 questions, if I may. One A very detailed question. As you have just said, in the Music, the operating income, half of the upside comes from Demon Slayer and Kokuho. If you could give me a breakdown between Demon Slayer and Kokuho, I would appreciate it. Second, about the impact of tariffs, JPY 50 billion, and last time you talked about the utilization of the strategic inventory. What would be the background of this JPY 20 billion worth of decline. Lin Tao: Now about the breakdown for each individual title, may I refrain from making comments on the breakdown of each title. And about the tariff impact, Horii will answer. Naoya Horii: Thank you for your question. As you rightly pointed out, the impact of the tariff used to be JPY 70 billion, now it's JPY 50 billion. So it's a JPY 20 billion worth of decline. In the I&SS segment, the impact of the tariff in the previous time we incorporated that to a certain extent in the I&SS segment. But if you look at the final product market and the orders received from the customers, we look at these factors. And then this time, in this particular segment, we don't see any further need of incorporating the impact of the tariff in this. So we excluded that. The JPY 20 billion decline comes mainly from I&SS segment. Operator: [Operator Instructions] Narisawa-san from Mainichi Newspaper. Unknown Analyst: This is a Narisawa from Mainichi. And I have a question about Games segment. PlayStation 5, celebrating sixth anniversary since 2020. And then also this year, the performance is quite good and you're looking to expand the installed base. And as for -- can you talk a little bit about the future strategy? Lin Tao: Thank you very much. This year, we are in year 6 since the launch, and then PS5 has been growing in its installed base. And our view is that -- and compared to conventional console life cycles and looking at the PS4 life cycle, it seems to be getting longer and longer. And especially, the PS4, which was launched in 2013, and it's been over a decade since then, but there are many active users enjoying the console -- and they are enjoying the consoles. And from that perspective, we believe that the PS5 is only in the middle of the journey, and we are really planning to expand it even further. And as for the year-end sales season, and thinking about the customer lifetime value and then also thinking about the profitability, we want to promote so that we will expand the installed base. And as for the future launches and successors, and then -- we are not in a position to make any comments about that. And that's all we have. Operator: So this concludes the Q&A session for the media app. And the Q&A session for the investors and analysts will commence at 4:40 p.m. Tetsujiro Kondo: Thanks for waiting. We will now take questions from investors and analysts. I am Kondo from the IR group, and I would serve your moderator. Thank you. The same 3 speakers from the media session will be responding to your questions. And we will now begin the Q&A session. [Operator Instructions] And SMBC Nikko, Katsura-san, please go ahead. Ryosuke Katsura: And this is Katsura from SMBC Nikko. And I would like to ask about G&NS and then I&SS. And the first question is about G&NS. The -- apart from JPY 14.9 billion impairment and the operating income for the second quarter is 15.3%. And in Q1 it's 15.8%. And you are able to achieve this high level of profit with our major titles. And this could be a threshold. And can you talk a little bit about how do you see it? And are there any factors contributing to this great performance? That's the first question. And then also -- and the NAND flash price is increasing, and then that might have the negative impact on the PS5, the hardware profitability. So what's your plan for the next -- the remainder of the year and the next fiscal year. And then with regards to I&SS, you said that you are going to strike a good balance between business expansion and the profitability improvement. And in North America, smartphone seems to be doing really well. But 3 months ago, there were a lot of news in with regards to changes in geopolitical situation, what sort of plans that you are planning to take for the midterm? And then do you have any updates? So those are the 2 questions. Lin Tao: Thank you. The first I would like to take the questions on Game. And the profitability in Q2 and the major contributing factor is the ForEx and network service and in SG&A and there was a reduction in M&A expenses. And so from that perspective, we were able to realize a high -- relatively high rate of profitability. Whether this is sustainable or not. That is the question. And basically, the network service, which commands a higher profit and then software and especially a first-party software, if they perform really well, and we should be able to maintain a high level of profitability. And with regards to memory prices and then with the potential impact on the hardware profitability and then for this fiscal year, and we have already secured all the parts that we need. But because the market is continue to fluctuate, so we keep a close eye on the situation, on the market. And of course, the supplies and then parts and then their prices when they go up, and of course, that will have an impact on the profit of the hardware. For the FY -- so next fiscal year and onward, and we have already achieved the 80 million installed base for PS5. And assuming this will grow next year instead of additional hardware profitability, and we want to really continue to monetize the installed base that we has already secured, and I think that would be the priority. And the second question will be addressed by Horii-san. Naoya Horii: Thank you very much for your question. First, the first half of the question, so the business expansion for the next year and then also enhancement of the investment efficiency, and we have been able to manage these quite well this year. And then especially on expenses side, we have been able to restrain expenses so that we can generate the sales growth versus previous year. And yes, we want to maintain this and then further improve into the next year. And as for the -- our response to the geopolitical risks, continuously with regards to production in the U.S., we want to ensure the quality so that we can produce in a stable way and trying to do that in-house, that would be really difficult to achieve. However, and working closely with the different partners or making a joint investment and what else we can do to really address this issue of the U.S. production, there is no clear answer, but we will continue to explore all the options. Thank you. Tetsujiro Kondo: Next, from Nomura Securities, Okazaki-san. Shigeki Okazaki: So this time, the impairment loss, Bungie's intangible assets was reflected in that. In the balance sheet, how much assets do you still have? And what is the risk of the impairment loss? The second question has to do with the PlayStation 5. In Q1 and Q2, I think you sold more than in the previous year. But towards the end of the year, you said you're going to expand? Well, are you aiming to have an upward revision? Or is the sales going to be more than previous year. Lin Tao: First, on the impairment loss Bungie, this is an impairment loss of Bungie. The intangible assets as well as the tangible assets that they are the target for the impairment loss and goodwill that is reflected -- that is supported by the whole Game segment. So there will not be any impairment loss for the goodwill. So for this time, Destiny 2, which is a game, performance did not reach the expectation that we had -- when we acquired Bungie. So the balance of the assets well, more specific, it's very difficult to give you specifics. But yes, we still have some intangible assets. And the question of whether there's still any risk remaining or not, Marathon, which is going to be launched and Destiny 2. The performance -- if the performance is not going to reach what we expect. Of course, there is a risk of impairment loss, but we don't believe that this will impact the whole Game segment, at least at this point in time. Your second question was about the installed base. In Q1 and Q2, it was more than in the previous year. So on 150 million units is the goal we have for the year. And the number of units, we believe we have forecasted for this year, we believe we can reach that. Thank you. Tetsujiro Kondo: JPMorgan -- from JPMorgan, Ayada-san, please. Junya Ayada: My name is at Ayada from JPMorgan. I have a question about Games and I&SS. One question each. For Games, as has been discussed earlier, network service sales in dollar terms increased by 35% in the second quarter and what will be the breakdown if possible, I would like to know. 2 years ago, there was a price increase, maybe there's an effect from that. And then the shift towards higher-priced products or the number of paying subscribers increase. Well, I think these are possible items, what would be the breakdown in terms of priority? And I&SS, in the first half, it seems that there is a customers -- some customers brought forward the purchase of the components. But in the third quarter, the input of wafers from 155 to 160, there seems to be a shift. So I guess this backdrop towards the U.S. and the Chinese market, what would be your take on the market conditions. I am sure there is an upside, so please explain the risks and upside both. The network service and the factors contributing to the increase in sales, as you rightly said, price comes at the top of the list, the price increase. Impact still lingers and then the number of subscribers or users increased compared to the previous year and the product mix. Tier 2 and Tier 3, higher-tier users what we have more and more people go into the higher tiers. I think those are the contributing factors for the increased sales. But, there is some factor contributed to the increase in the operating income. That is to say acquisition of the contents efficient way of acquisition, looking at the data, that contributed to the operating income improvements. And I&SS, please. Lin Tao: Thank you for your question. As you rightly pointed out, in the first half, the shipment -- the sensors shipment exceeded what we expected. And for the full year forecast, we place it unchanged. The supply chain of the set because of the U.S. tariffs or the shift in the production base because of this, there seems to be a certain level of opaqueness or lack of clarity. So what we shipped -- but that -- some of them go directly to the final markets and some of them are still linger in the supply chain. So we have to look at this. And the third quarter we will continue full capacity wafer import. Opportunistically, if things go well, we can see the increase in sales. And then from next fiscal year onwards, well, of course, we can think of accumulating the strategic inventory as well. So about the amount of volume of the input, we look at these factors. About our customers, well, I cannot mention each and individual customer situation. But generally, as has been reported in the media, depending on the customers, there are ups and downs and the smartphone market is still on the recovery track, gradual recovery track. That's our understanding. At this point in time, in terms of market and customers, North America, seems to offer a bigger chance and opportunities. Tetsujiro Kondo: So we will take the next question. Ezawa-san from Citigroup Securities. Kota Ezawa: This is Ezawa from Citigroup Securities. And in -- we have one question, big question for Game. In -- so there was a mention of the treating R&D capital as an expenses. Can you talk a little bit more about that? And is this related to some sort of impairment or -- and also the titles related to this, if there are any specific titles related to this? And if you could talk about them, that would be great. And then furthermore -- and also the -- and development asset capitalization. And as we run your business, will you foresee, this will happen more often, and that is the one big question. The next question is also -- and this has to do with the development asset. And if you look at the supplementary presentation and when you look at the depreciation by segment, it appears that there's no apparent increase. However, the depreciation of the development is not really included, I believe, and the capitalization of development for the Game is, what will be the scale of the asset for the gaming development. Lin Tao: Thank you for your questions. So the capitalization and in correction -- and this is not attributable to the nature of the business. This is -- and Korenaga-san will talk more about the details of the revision. Hirotoshi Korenaga: Thank you for the question. So this value is not an impairment of asset. And in the past, and there was the network development, which was treated as the intangible asset and then part of it should not have been capitalized and we found out. So that's why for the past years and then for this fiscal year, we made the correction in one go. And specifically, the network-related asset and R&D are capitalized, but console and hardware R&D are treated as expenses. So this treatment was mistakenly done in the past which we made a correction retroactively. That's all. Lin Tao: And through operational improvements, we will prevent the recurrence. So we believe that this will not happen again. And the next one is the Game capitalization and then the depreciation or monetization. So the depreciation that we gave itself, and we do this in accordance with the rules. So it's not that in all the games are capitalized. And we will work closely with the auditing firm. So at the stage of the development. And basically, we will be able to finalize the value of the asset mailer in the process. So in terms of value, it's not really that high on an annual basis, and we believe the tens of billets in tens of billions of yen, that level. And then as for the depreciation expenses, so when we launched the content, we started to depreciate and that is the nature of the business. Thank you. Tetsujiro Kondo: So we have very little time left. So the next person will be the last person to ask questions. [Operator Instructions] From Goldman Sachs Securities, Munakata-san. Unknown Shareholder: This is Munakata from Goldman Sachs Securities. One question on G&NS. So the full year operating profit, I think it was JPY 500 billion, but it was not the tariff impact. It was not included in the forecast. And when you consider these items, I believe that the profitability has improved. And the current platform, I think it's looking at hardware and other services, which the prices are going up. So by looking at the competitors' trends, next year -- after next year, in order to improve your profitability, what will be the upside? It will be probably the game contents and these items, are you planning to revise the prices of the game contents, for example? Lin Tao: Thank you very much for the question. The Game business for next year, well, first, we have to focus on the year-end season and try to expand the installed based units so that we can have 90 million units by the time we start next year. The upside and downside. The upside for next year, the first-party contents, the Insomniac studio is developing that. The Wolverine will be launched -- so tentpole content that's there. And Marathon, it's a live service. So if we can be launched this year, next year, I think we will enjoy revenue, profitability. On the other hand, the market situation, somebody else asked this question. The components and the supply chain are not very transparent. So we have to be careful about that, looking at the profitability, how to balance that. So going forward, when we plan next year's strategy, we need to take that into account. As for prices, I don't have anything that I can comment. Since it's time, we'd like to conclude Sony Group Corporation's consolidated financial results presentation. Thank you very much.