Purpose
Fill the world with emotion,
through the power of creativity and technology.
Values
Dreams & Curiosity
Pioneer the future with dreams and curiosity.
Diversity
Pursue the creation of the very best by harnessing diversity and varying viewpoints.
Integrity & Sincerity
Earn the trust for the Sony brand through ethical and responsible conduct.
Sustainability
Fulfill our stakeholder responsibilities through disciplined business practices.
Business Segment Abbreviations
A Creative Entertainment Company
with a Solid Foundation of Technology
A Creative Entertainment Company
with a Solid Foundation of Technology
Under our shared Purpose, to "fill the world with emotion, through the power of creativity and technology," the Sony Group's approximately 110,000 employees are working in a concerted effort to create Kando and deliver it to the world together with our partners.
Since the launch of our first mid-range plan in FY2012, with Kando as the keyword, we have been working to enhance our entertainment businesses — games, music, and pictures — that move people's hearts. These three businesses now account for around 60% of our consolidated sales.
We reorganized the Group architecture, including the establishment of Sony Group Corporation in 2021 to evolve our businesses based on our Purpose, centering our diverse portfolio as our core strength. We believe that establishing a system in which each business is equally connected has led to the acceleration of Group synergies. Further, we plan to partially spin off Sony Financial Group (SFG) in 2025 so that it can pursue its own capital procurement and growth strategies.We will continue to support the evolution of the Financial Services business as an important part of the Group through measures such as leveraging the Sony brand and reinforcing collaboration among our businesses.
Beyond these initiatives, Sony has been shifting its management focus to the creation side. Looking back over our history, in the 20th century Sony was a company that delivered Kando through its products, such as the Trinitron TV and the Walkman®. In the 21st century, we want to be a company that contributes to creating Kando.
We have been making this creation shift in our three main business layers. In the content layer, which is directly connected to Kando, we have invested approximately 1.5 trillion yen over the past six years to strengthen our content creation, starting with the acquisition of EMI Music Publishing in 2018. Our acquisition of Crunchyroll in 2021 was an investment in a distribution service that delivers Kando, and we aim to contribute to the anime creator community by spreading Japanese anime around the world.
In the products and services layer, which creates Kando, we are also working hard to create entertainment together with creators. Currently, profits from creation-related business account for more than 80% of operating income in the ET&S segment.
In the semiconductor layer, CMOS image sensors support the creative process for many people, from movie creators to smartphone users worldwide. We have implemented capital expenditures amounting to about 1.5 trillion yen in CMOS image sensors over the past six years, and intend to continue to evolve them as key devices for creating Kando. These CMOS image sensors also contribute to safety in mobility, which we are positioning as a new entertainment space (See "Feature: The Evolution of Sony as a Creative Entertainment Company" on p.17 for details).
As a creative entertainment company with a solid foundation of technology, we aim to leverage the technologies we have cultivated until now, and further refine our technologies for Kando creation. Creativity resides in people, and people live in the present. Therefore, under the key concept "real-time," we are focusing on the following two creation technologies.
One is technology that captures moments using CMOS image sensors. Our Alpha 9 III mirrorless interchangeable-lens camera equipped with a full-frame global shutter image sensor, is one example. By reading out all pixels simultaneously, even fast- moving subjects can be captured. Since its release in 2024 it has already been used in many shooting opportunities at sporting events including the World Athletics Indoor Championships. When used with a 5G portable data transmitter it supports real- time data transport from shooting locations, contributing to prompt broadcasting and video production. Furthermore, the use of our VENICE digital cinema camera series is extending beyond film production to purposes such as capturing halftime shows during major sporting events.
It is of ever-greater significance for creators behind the lens to capture the real world "as it is." CMOS image sensors are also used in verifying the authenticity of an image to ensure that it consists of a real subject shot by a real person using a camera.
Our second area of focus is game engines, which are at the core of real-time computer graphics and have evolved in recent years into technology for producing video content. At Sony we are using the Unreal Engine by Epic Games, a company in which we have also invested, in a range of creative processes. For example, at the conception stage, our Torchlight facility makes it possible to simulate filming on set using the Unreal Engine. Other examples of its use include virtual production at the shooting stage, and our immersive spatial content creation system that enables virtual overlaying of 3D content into the physical space to support creative and editing work in the production stage, raising the value of creators' time and helping them to unleash their creativity (See "Feature Example 3: Creation Technology" on p.21 for details).
My foremost priority is to create value from a long-term perspective based on our Purpose, with a focus on Kando and people.
For sustainability, where a long-term perspective is essential, each business of the Sony Group conducts initiatives that leverage its respective strengths, driven by the belief that to "fill the world with emotion" it is necessary to create a society in which everyone can live with peace of mind in a healthy global environment. In our sustainability initiatives we focus on climate change, DE&I, human rights, and technologies for sustainability, and are implementing initiatives such as reducing greenhouse gas (GHG) emissions, promoting career opportunities for women, embracing ethical AI practices, and broadening accessibility. In April 2024 we announced Sony's Sustainability Vision to more clearly articulate the intended direction in which the Sony Group aims to proceed with the goal to "inspire a world filled with emotion, for this generation and beyond" (See "Sustainability" on p.33 for details).
It has been five years since we established our Purpose in Sony's corporate culture as the foundation on which our businesses and employees can take autonomous action. Even amidst a rapidly changing business environment, by formulating and following through on strategies rooted in our Purpose, each of our businesses is able to engage in flexible and agile management. Moreover, by sharing the same direction, various Group collaborations focused on Kando are born.
Creativity develops communities. In each business we are working to create spaces where creator communities can gather and interact, and to nurture the next generation of creators.
We aim to continue building value from a long-term perspective, contributing to the creation of Kando by leveraging the strengths of our diverse people and businesses.
In FY2023, which was the final year of our fourth mid-range plan, we faced an uncertain business environment and focused on the management of immediate risks to ensure we achieved our KPI goals. We also drew up our fifth mid-range plan for the next three years starting from FY2024 and discussed the Sony Group Vision for the long term thereafter, in order to realize the new growth stage for Sony that we announced when I assumed the positions of president, COO and CFO in April 2023.
In the fourth mid-range plan whose theme was "Sony's Evolution," we have been working to evolve our corporate architecture and business portfolio to drive growth for the entire Group. Since the founding of Sony Group Corporation in 2021, we have established a system in which each business is equally involved in contributing to Group growth, and have begun preparing for the planned partial spin-off of the Financial Services business in October 2025. By concentrating capital allocation on our three entertainment businesses and I&SS, our high-growth areas, we increased the ratio of their combined sales to those of the entire Group by 10% over the past four years, to 68% in FY2023, developing a more growth-oriented business portfolio. As a result, we made 5.1 trillion yen in cumulative consolidated adjusted EBITDA over the past three years, our KPI during the fourth mid-range plan set as a growth indicator, which was 19% above our initial target. Excluding the Financial Services segment, our average annual growth rate of consolidated operating income from FY2020 to FY2023 was 9.0%, demonstrating that our profitmaking ability is steadily improving.
The theme of the fifth mid-range plan, beginning in FY2024, is "Beyond the Boundaries: Maximize Synergies across the Group." To continue working to build corporate value through sustainable growth, we plan to further evolve our initiatives to actualize intra-Group synergies and focus on mid- to long- term growth for our three entertainment business segments and I&SS. To reinforce our resilience amid the uncertainty and significant change we foresee in our business environment, we plan to further prioritize strengthening our earnings base through continuous evolution of our business portfolio and improving investment efficiency and business profitability. Consequently, for the current mid-range plan we are placing greater emphasis on profit-based growth, and have set
as Group-wide KPIs the average annual growth rate in consolidated operating income (excluding the Financial Services segment) and operating income margin. We aim to achieve profit growth driven primarily by the G&NS and I&SS segments, an average annual growth rate of 10% or more in operating income, and a three-year cumulative consolidated operating- income margin of 10% or more. In addition, we have positioned sales growth for the Music, Pictures, and I&SS image sensor businesses, as well as the G&NS game-software and network-services businesses, as important indicators.
The mid-range plan mandates the focus for each business segment. The G&NS segment works to steadily maintain and expand the number of active users and user engagement and promote first-party software titles produced by our in-house studios as well as PC programs under the newly-established Platform Business Group and Studio Business Group. The Music segment continues working to grow faster than the market by strengthening initiatives in emerging markets, increasing earning opportunities for our music catalogs, and incorporating adjacent businesses such as merchandising, while accelerating global marketing of Japanese animation and artists. The Pictures segment, which serves as the core for collaboration among our three entertainment businesses, endeavors to maximize the value of the IP (intellectual property) assets held by the Sony Group. We further aim to achieve profitable growth with Crunchyroll, a direct-to-consumer (DTC) service that deeply engages with anime fans and anime creators. The ET&S segment, meanwhile, focuses on the steady growth of the highly profitable and technologically differentiated imaging and sound businesses, accelerating expansion into Growth Axis businesses. The I&SS segment targets higher sales and profitability primarily in mobile sensors and works to improve investment efficiency and reinforce development and manufacturing to boost yield. Finally, the Financial Services segment works to further increase corporate value through the organic growth of each operation, expanding its customer base across the financial group, and tightening alliances with the rest of the Sony Group.
We expect a significant increase in the three-year cumulative consolidated operating cash flow, excluding the Financial Services segment, during our fifth mid-range plan due to profit growth we anticipate during the plan as well as due to the recovery of working capital that increased over the past three years. Using this as the main source of funds, we forecast 4.5 trillion yen for the total amount of capital allocation, up 0.6 trillion yen from that of the previous plan. With regard to the breakdown of this capital allocation, we expect to spend 1.7 trillion yen for capital expenditures, down 0.2 trillion yen from the previous plan, taking into account that investment for image sensors is expected to decrease. For strategic investments, we plan to allocate 1.8 trillion yen to business growth investments and flexible share repurchases. We will continue to work toward mid- to long-term growth of our business through such means as acquisitions of IP and M&A, but we intend to emphasize investment efficiency and be more selective in the strategic arena.
The biggest change from the capital allocation strategy under the previous plan is that we intend to focus on shareholder returns. Regarding said returns, we aim to emphasize the total payout ratio, which we expect to gradually raise through the period of the current plan, aiming for approximately 40% for the final fiscal year ending March 31, 2027. To this end, we set aside 250 billion yen for share buybacks for FY2024, greater than what we acquired in the previous fiscal year. As for dividends, our policy is to continue to increase them steadily while accelerating the pace of dividend increases.
We have just formulated our Creative Entertainment Vision, a long-term look beyond our fifth mid-range plan to illustrate where the Sony Group hopes to be a decade from now. By presenting our worldview as a creative entertainment company with a solid foundation in technology, as well as a clear timeline for pursuing that Vision and our shared Purpose, to "fill the world with emotion, through the power of creativity and technology," we hope it will inspire employees, partners, and creators to help us create a bright future together. With likely changes in society and technological evolution also in mind, we have discussed this Vision over two years with diverse colleagues across our Group companies, particularly among the generation who will lead our company into the future to prepare this Vision.
The key message of the Vision — "Create infinite realities" — expresses Sony's ambition to seamlessly connect the multi-layered worlds we foresee on the horizon, where the physical and virtual overlap, developing limitless Kando through the power of creativity and technology, together with creators.
The Vision summarizes our efforts to "create," "cultivate," "expand and deepen" IP to maximize its value in three key phrases: "Creativity Unleashed," "Boundaries Transcended" and "Narratives Everywhere." By this we mean to harness technology to unleash the creativity of creators around the world, transcending physical, virtual, and time dimensions; connect diverse people across boundaries to foster vibrant communities; work with creators to craft exciting experiences rich in narrative that go beyond imagination; and spread those experiences as new touchpoints for Kando around the world.
We have already begun initiatives to maximize IP value, moving toward the direction outlined in our Creative Entertainment Vision. In the anime field we plan to employ AnimeCanvas production software, currently under development, to improve the production environment, work efficiency, and quality of each title, as part of our efforts to contribute to IP creation. Together with the industry we are working on the establishment of an academy to cultivate anime creators for global markets. In the Pictures segment we are nurturing and supporting film creators who can make the most of cutting-edge shooting technologies like virtual production.
As an effort to cultivate IP through community-building with fans, creators, and partners, we are undertaking film adaptations of game IPs like God of War and cultivating "fandom artists," such as Nogizaka 46, whose passionate fans create new cultures.
Further, through our IP 360 Extension initiative to extend and deepen IP across categories including location-based entertainment (LBE), merchandising, and the mobility space. For LBE we are working to deliver the ultimate Kando through immersive experiences made possible by combining our IP with our gaming, sensing, video, and audio technology, and then grow it as a new business. We are also accelerating merchandising through our Group-wide collaboration, because it not only increases the emotional attachment of fans to a given IP, but can also help us acquire new fans. In the mobility space we are continuing our collaboration with other companies across the industry including Sony Honda Mobility, as well as increasing the experiential value of transportation and expanding opportunities to provide entertainment by turning a vehicle into a personalized entertainment space, made possible using sensing data and vehicle data to understand the passengers and surrounding environments.
We are also expanding initiatives to maximize the value of IP globally by assisting creators with diverse cultural backgrounds and strong regional appeal. A case in point is the Sony Innovation Fund: Africa, a corporate venture-capital fund we established in collaboration with the International Finance Corporation to support startup companies that are helping develop entertainment businesses in Africa.
| Anime | Pictures | Gaming | Music | Sports | |
|---|---|---|---|---|---|
| IP Creation | 
DX / Academy |
Advanced Visualization |
Talent Discovery |
Unit Turning Novels Into Music |
Real-Time Animation Overlay |
| IP Cultivation | 
Fan Voting Ceremonies |
Franchise Development |
Live Action Adaptation |
Fandom Artists |
Virtual Fan Engagement |
| IP 360 Extension | 
Live Stage Adaptation |
Cinema Concerts |
LBE |
Biographical Works |
Predictive Sports Games |
We are bolstering technologies that can help creators engage in maximizing the value of their IP in efficient, high-quality ways, including sensing and capturing as well as real-time 3D processing, AI, and machine learning. Building on these initiatives, we are moving toward solutions for delivering our IP rapidly and at low cost to a broader range of fans.
In sensing and capturing, we are putting particular effort into our Volumetric Capture Studio, which generates 3D data from people and locations to render high-quality images. Going forward, we plan to apply high-quality 3D assets, including motion data from our Studio, accumulated by each of our companies cross-functionally across the Group, and explore potential external sales. In real-time 3D processing we are pursuing exploratory activities with Epic Games, focused on the Unreal Engine, developed as a physics engine for game CG generation. For instance, we reused 3DCG components from a music video shot using virtual production to produce a game set in the same world, and released a proof-of-concept CG-based short film using the Unreal Engine. We used machine learning in the production of Marvel's Spider-Man 2, a game released last year that proved a major hit. By applying voice- recognition software in certain languages, we were able to automatically synchronize subtitles with each character's lines, thereby significantly shortening the subtitling process. In India, a multilingual society, we are conducting research using AI technology and machine learning to shorten dubbing and translation processes.
To maximize the value of our IP, we believe it is also important to develop a shared Group network to support these efforts. The PlayStation™ Network is a network service that provides both high-quality operations and cost optimization, flexibly auto-scaling to user traffic and supporting various payment methods and currencies. By extending its core functions, such as accounts, payments, data infrastructure, and security, to the Crunchyroll service, we plan to develop the network into an engagement platform for the Sony Group. Going forward, we plan to standardize user IDs for all the services the Group provides and utilize this engagement platform to support the development of new network services across the Group in areas such as mobility and LBE. In the
future, we plan to build a common platform specialized for fan engagement beyond the boundaries of the Sony Group.
I believe that the continuous evolution of diverse businesses and employees is important in order for Sony to be ever more resilient and keep growing amidst today's uncertain business environment and rapid technological evolution. Diverse talent has always been a Sony strength. In particular, in recent years M&A initiatives have allowed us to bring in new ways of thinking and knowledge, with increasing numbers of colleagues having specialized expertise, particularly in the entertainment businesses. This is an example of diverse experience coming to the fore. Year by year we are increasing our ratio of foreign nationals in executive positions and women in management positions. Sony brings together people with diverse nationalities, ethnicities, genders, and values and encourages them to share their knowledge and experience and to expand their scope for greater growth opportunities. Through constant growth as a company and the personal growth of employees, Sony maintains a positive spiral — winning the preference of our customers, attracting more talented people, building corporate value, and giving back to society.
I believe businesses and management represent positions of trust and a legacy for future generations, and I place at the core of my own values the need to contribute to Sony by increasing its value and passing it on to the next generation in an even better form. Toward the future forecast in our Creative Entertainment Vision, I will endeavor, together with our employees, creators, fans, business partners, shareholders, and investors, to realize growth by steadily maximizing the value of our IP beyond existing boundaries.
The Evolution of Sony as a Creative Entertainment Company
Sales Growth in Entertainment Businesses
(Component ratio of total sales per segment*1) (Chart 1)
Breakdown of Strategic Investment over Last Six Years
(Chart 2)
Global Music Production Market Sales
(Chart 3)
Composition of Sales in U.S. Music Production Market
(Chart 4)
In recent years Sony has accelerated the growth of its entertainment businesses. Since FY2018, when Kenichiro Yoshida took on his role as CEO, Sony has been accelerating efforts to reinforce its entertainment businesses, which, driven by the Kando in its Purpose, move people's hearts through games, music, and pictures. The proportion of Sony's total sales comprised by the entertainment businesses, consisting of G&NS, Music and Pictures, increased from 26% in FY2012 to 55% in FY2023 (Chart 1). In addition to the evolution of this business portfolio, this change can be attributed in large part to investment accompanying Sony's shift of direction toward creation, which places more emphasis on creators under the management direction of "getting closer to people." Of Sony's 2.4 trillion yen in total strategic investment over the past six years, content IP accounts for 57%, and DTC, which delivers content IP to users, for 8%. Strategic investment related to content IP has gone mainly into acquiring corporations with important IP assets as well as IP development and production studios. Including the acquisition of music catalogs and other expenses, the total investment in content IP over the past six years stands at roughly 1.5 trillion yen.
Sony's creation shift is shown in its balance sheet. Intangible assets and goodwill as of the end of FY2023 were 4 trillion yen, approximately 2.9 times that of 10 years ago. Content IP like music catalogs and character rights comprises highly liquid, quality assets that can generate profit and cash over longer terms more efficiently than tangible fixed assets. Sony's ratio of intangible assets to tangible fixed assets has also grown, from a factor of 1.8 to 2.6 over ten years, illustrating the shift in asset components.
Looking at the external environment, the entertainment market is clearly growing with the spread of streaming services and the like, and particularly the global music market has been growing (Chart 3). Within that trend the value of content IP is rising. While Sony previously focused on the distribution side of business, delivering Kando through sales of hardware and packaged media, today it has shifted its focus to the creative side of Kando.
This shift is present in Sony's profit structure as well. The value of the content IP Sony acquires or creates is contributing more than ever, through licensing revenue. In the Music and Pictures segments the value of both new and older titles is increasing. For example, in 2023, the share of songs in the US music production market that were released more than 18 months ago accounted for 73% (Chart 4). In this way, continuous releases of hit content lead not only to single-year profits, but to the expansion of the profit base for the future as well, contributing to the sustainable growth of corporate value. This is why Sony continues putting effort into the creation and cultivation of content IP.
Japanese animation, one of Sony's focus areas, features original characters and distinctive worlds, attracting fans to build a very strong community. The market for made-in-Japan anime has grown by a factor of roughly 2.2* over the past decade overall, and by a factor of approximately six* outside of Japan, with still further growth projected. In this strong growth market, inter- business cooperation among the entertainment businesses is facilitating Sony's steady implementation of initiatives to maximize IP value through generating, cultivating and extending IP beyond boundaries (IP 360 Extension), centered on Aniplex, a subsidiary of Sony Music Entertainment (Japan) (SMEJ), and Crunchyroll, a joint venture between Sony Pictures Entertainment (SPE) and Aniplex, which operates a DTC service specializing in anime.
To generate IP, Aniplex produces many high-quality titles every year that are beloved by anime fans around the world, like Demon Slayer: Kimetsu no Yaiba, which has become a social phenomenon. Aniplex and Crunchyroll jointly produce anime such as Solo Leveling and are looking to establish an academy to nurture overseas animation creators across the industry. Demand for new titles is growing substantially, and the A-1 Pictures and CloverWorks production studios attached to Aniplex are leading the effort to develop the new anime production software AnimeCanvas through collaboration with engineers at SMEJ and across the Sony Group.
Since 2017, the Crunchyroll Anime Awards have played a significant role in nurturing this kind of IP. Hosted by Crunchyroll, which boasts over 15 million paid subscribers across more than 200 countries and regions, the Awards celebrate and recognize excellence in anime creators, series, films, music, and more. Winners in over 30 categories are chosen by fans worldwide. The event features the creators of the nominated titles and celebrities representing anime enthusiasts as presenters, promoting both IP and anime culture alongside the fans.
Adaptation of IP for LBE, such as at THE TOKYO MATRIX in Shinjuku, Tokyo, and the creation of merchandise are part of the IP 360 Extension initiative to further expand the IP. Aniplex is also working to adapt popular titles for theatrical performance. Demon Slayer: Kimetsu no Yaiba, Bocchi the Rock!, and Lycoris Recoil have already been produced for the stage, thrilling existing fans and creating new ones.
In the era of streaming, the artistic expression, fascinating characters, and creative worlds of anime that have been fostered in Japan for many years are expanding on a surprising scale into the world. In such an era, it is wonderful that the Sony Group is approaching anime from so many different angles. Aniplex aims to continue to deliver outstanding titles that meet the expectations of fans, and, in cooperation with other Group companies, contribute to the further development of anime culture.
Share increase for new songs in the US
Five consecutive years
(2018-2023)
New tracks released to digital streaming platforms
+24%
(FY2023 vs. FY2019)
Spotify Weekly Global Top 100
Average of 31 songs ranked
(during FY2023)
Share of music- publishing market
No. 1 for eleven consecutive years
(2012-2023)
Songs managed
6.24 million titles
(as of March 31, 2024)
Weekly Spotify Worldwide Chart in 2023
SMP songwriters contributed to
No. 1 songs in 37 of 52 weeks
Sony's music business has broken its own revenue record for eight consecutive years with revenue, increasing by 3.6 billion USD compared to FY2019, outpacing the growth of the market. In the US, the market share of new songs has increased for five consecutive years, reaching a record high of 27%. By acquiring The Orchard, which provides support for independent music distribution and independent labels, and AWAL, which offers support services for independent artists, as well as bringing record labels Som Livre and Altafonte into the company, SME is expanding its services to independent artists in many emerging markets around the world.
At the same time, Sony Music Publishing (SMP), which boasts the world's top share in the music-publishing industry, continues to acquire music catalogs and businesses. Since it made EMI Music Publishing a wholly-owned subsidiary in 2018, Sony has begun accelerating the enhancement of its music catalogs, resulting in 6.24 million copyrighted songs under its management as of March 31, 2024, a 1.7-fold increase over the past decade.
These vast catalogs represent a striking example of Sony's enhanced investment in content IP, and are a core strength, helping the company achieve high levels of growth against the backdrop of market expansion due to the adoption of streaming services. SMP's streaming revenue has increased to an average annual growth rate of 38% over the four years since FY2020 due to the expansion of the streaming market, a stable share of high-ranking songs by contracted artists on streaming services and widening opportunities to apply its catalogs of older songs. In fact, the number of new tracks released by SME to digital streaming services increased by 24% compared to FY2019, and songs involving SMP-affiliated songwriters have ranked number one on the Spotify Weekly Global Chart for 37 out of 52 weeks.
From gaming to social media platforms to Web3, and beyond, there is commercial potential in many new technology areas.
More importantly, Sony Music Group (SMG) commits resources to the research and development of cutting-edge formats to provide its artists and songwriters with more creative outlets and ways to reach new fans. In these circumstances, the layering of IP in this way helps to maximize IP value across categories, such as games and merchandising, and also leads to new opportunities for SME artists and songwriters. Furthermore, Sony expects it to continue to serve as the cornerstone of the strategy supporting Sony's music business even if there are future changes in the industry's technological trends. Going forward, Sony plans to continue to expand its catalog while making carefully selected investments in line with this strategy, and, while protecting the rights of artists, will also look to new technological fields with business potential, all the while continuing to evolve its ecosystem.
SME is home to one of the world's largest and most culture-defining catalogs of iconic songs, representing much of the foundational history of recorded music. We have a deep understanding of the catalogs we work with and consider ourselves stewards of our artists' vision. Our expertise uniquely positions us to help our artists at every stage of their career maximize global opportunities with their music. Today's frontline hits are tomorrow's catalog favorites.
One of the creation technologies that Sony is focusing on is game engines, such as Epic Games' Unreal Engine, which help maximize IP value. Making the most of its high-quality real-time 3D-processing (rendering) capability, the Unreal Engine can help raise work flow efficiency and production freedom significantly in the process of creating digital assets for films and other content. Based on its strategic investment in Epic Games, Sony has therefore undertaken a range of initiatives involving the Unreal Engine, and is exploring more applications.
Using the Unreal Engine and other cutting-edge technologies, SPE has established Torchlight, an advanced visualization facility that allows creators to explore, manifest and develop their vision in real time at the pre-production stage. Using Torchlight in pre- production allows creators to comprehensively prepare for the actual filming, and also allows them to make use of the digital assets they have created right up until the final editing stage. It has been utilized for several third-party projects and SPE films including Venom: The Last Dance, Kraven the Hunter, and The Karate Kid.
Specifically, by using the Virtual Production Tool Set, which allows creators to simulate the look of Sony's flagship VENICE digital cinema camera, they can freely test various shooting possibilities in a virtual space that uses the Unreal Engine to recreate a film set. Furthermore, by using tools such as the mocopi® mobile motion capture system, it is possible to reproduce action by the actors in a virtual space.
On the other hand, virtual production using large LED screens, provided by Pixomondo and Sony PCL, displays images in real time from the creators' minds during the actual shooting of film content. Virtual production creates an environment where physical subjects and digital backgrounds projected on LEDs interact with each other while being shot simultaneously and synthesized in real time, freeing creators from the inevitable constraints of physical shooting on location. Natural complications such as time of day, location-based hazards, and weather conditions are avoided. It also significantly reduces the time required for the post-production processes, especially VFX, since the resulting real-time video composite will be captured directly on camera and can be seen and shared by the director and performers on the spot during the shooting. The Unreal Engine is used to create 3DCG backgrounds to be shown on the LED screens and perform in sync with the camera. The scalable nature of this technology has allowed creators to use it for motion pictures, TV programs, music videos, and commercials, ranging from TV series like Game of Thrones, House of the Dragon and Avatar: The Last Airbender, as well as a short film by the city of Kobe released in April 2024.
Pixomondo excels in virtual production and our ability to bring creators' visions to life through our advanced visualization and VFX capabilities. Supported by Sony, we integrate engineering, deploy cutting- edge LED stages, innovate, and educate to propel the global virtual production industry forward. As trailblazers in utilizing Unreal Engine for film production, we lead the industry in comprehensive virtual production and collaborate closely with our clients as creative partners, striving together to achieve ground-breaking outcomes in filmmaking and beyond.
Toshimoto Mitomo
Corporate Executive Officer, Executive Deputy President and CSO Officer in charge of Intellectual Property, Business & Technology Strategy, Business Development, Business Incubation Platform, and Mobility Business
Sony aims to achieve further growth through maximizing IP value and with a management focus on creation. My mission as CSO is to formulate medium- to long-term strategies to achieve this goal effectively and efficiently across the Sony Group, promote internal and external collaboration, and enhance our corporate value. As part of this effort, as a Group headquarters initiative we take on business incubation projects that complement those carried out by Group companies and are best achieved through intra-Group collaboration.
We identify areas that may be beyond the scope of one Group company to build into a business, but show great business potential through a mid- to long-term Group-wide effort, and work with financial discipline to develop them. After receiving development support at Group headquarters, projects deemed feasible as part of a business are transferred to appropriate Group companies, and the cycle continues. A case in point is our virtual production solutions business, which we started incubating in 2017 and is now operated by SPE and Sony Corporation.
Sony's strength is the breadth of its technologies and expertise, from producing content to delivering experiences. Sony is unique in having it all - sensing technologies to capture data needed for content, entertainment expertise to create content from data, and the devices and services to deliver that content to users. Sony is also uniquely positioned to engage in direct dialogue with a broad range of creators, from games to music, pictures and anime - enabling us to listen to their needs to realize higher-quality and creative, new entertainment, and support them to unleash their creativity.
Anime, for instance, is an attractive field where we can develop IPs into multifaceted businesses, with growing market demand for new titles. Technological barriers, however, have slowed the progress of digital transformation (DX), and consequently the industry faces many challenges such as heavy workloads. Leveraging technology to realize an environment that enables creators to focus on creative work, engineers at SMEJ and Sony Group are developing an anime production software, AnimeCanvas, based on dialogue with creators at Aniplex's production studios A-1 Pictures and CloverWorks. By supporting the anime industry from the production stage, Sony aims to further evolve and grow its anime business through the production of more new, high-quality titles.
To maximize the value of IPs, Sony is making the most of its breadth of content. We are expanding the field of entertainment, by for example applying our expertise in music to games and sports, and focusing on expanding content of specific IPs such as film adaptations of game IP. One of the creation technologies that accelerates such multifold expansion of content is the game engine. Through our strategic investment in Epic Games, we are collaborating on developing workflows that utilize their Unreal Engine outside of gaming, such as in film and/or TV program productions. We are also working on diverse application of IPs through their game Fortnite, such as by merging an artist's music video world with the game, to craft user experiences that transcend the borders of entertainment genres. By standardizing production tools, we can reduce production time and costs, and foster the creation of new entertainment, which is expected to contribute to the growth of the entire content industry.
In emerging regions where we can expect significant growth in entertainment over the medium to long term, Sony works to cultivate both the next generation of creators and the local content business through initiatives such as the corporate venture capital fund, Sony Innovation Fund: Africa. We offer opportunities to rising talents early on in their careers, and work to deepen our understanding of local cultures and practices as we nurture and support these individuals. Our goal is developing business opportunities for Sony in tandem with creating and developing local content industries.
In these ways, Sony is pursuing business development by embracing inclusion, whereby diverse people collaborate in an environment of deepening mutual respect and understanding, to keep on delivering Kando through new content and experiences.
Sony's Purpose, to "fill the world with emotion, through the power of creativity and technology," defines why Sony exists, and guides Sony Group employees along the same vector to create value from a long-term perspective. Further, Sony's Identity is a "creative entertainment company with a solid foundation in technology."
Finally, Sony's Corporate Direction is "getting closer to people." As it aims for sustainable value creation, Sony designates creativity, technology, and diversity as drivers for value creation, which are essential to evolve and grow diverse businesses, promote collaboration, and create new value.
Purpose explains the reason for our existence, for Sony Group employees to work together along the same vector and create value from a longterm perspective; in other words, why we exist
Identity expresses how we want to be perceived from the outside; in other words, who we are
Corporate Direction sets out where we are headed
Key Drivers are the essential elements to realize value creation
Value Creation
Value creation through diverse businesses
Sony manages diverse businesses with the aim of sustainably creating value with people at the core, thereby serving its Purpose to "fill the world with emotion, through the power of creativity and technology," under the Corporate Direction of "getting closer to people." In pursuing this Purpose, Sony's value creation through its businesses can be roughly divided into categories based on three perspectives: users, creators, and the society in which people live.
In addition to generating content that moves people's hearts, Sony's content businesses, including Games, Music, and Pictures, and its DTC businesses, build communities where users can gather together and share creative experiences. The ET&S business leverages its strength in creation technologies to create brand-new entertainment together with creators. Finally, the I&SS business provides image sensors for smartphones used by people around the world to share emotion, as well as display devices for AR/VR, which are expected to emerge as technologies augmenting Kando spaces.
Sony crafts environments where creators can fully express their creativity and fulfill their potential byproviding platforms, technologies, and expertise, in addition to discovering, nurturing, and producingcreators, and supporting Sony artists from all directions. Sony delivers the resulting content to movepeople's hearts around the world across a variety of domains, including Games, Music, and Pictures.
Sony plans to continue to contribute to co-creation of content and maximizing the value of creators'time through products, technologies, and services that enable creators to express their vision; Sony also plans to continue to realize real-time creation and live events.
Sony helps to create a society in which people can enjoy daily lives filled with emotion through its businesses that support people with safety, health, and reliability. Sony aims to contribute to automobile safety and a better future for mobility, along with improved industrial automation and security, with its CMOS image sensor technologies, while Sony's life science & technology business aims to contribute to public health through applications in the fields of imaging, display, and cloud technologies that it has cultivated over many years. In the Financial Services business, Sony focuses on providing customers with a sense of safety and assurance through pertinent advice, products, and services that leverage a variety of information sources, while improving access to its services and promoting innovation for greater convenience in daily life.
Hiroaki Kitano
Corporate Executive Officer,
Executive Deputy President, and CTO
Officer in charge of R&D
and AI Collaboration
President and CEO, Sony Computer
Science Laboratories, Inc.
Representative Director
and President, Sony Research Inc.
At Sony, under our Purpose to "fill the world with emotion through the power of creativity and technology," our research and development (R&D) aims to develop technologies that support creators and unleash their creativity. Our R&D direction is "We are here for creators." We define "creators" broadly, to include artists, engineers, scientists, and everyone who endeavors to build a positive future with Kando.
In line with this direction, to make Sony "future-ready" by building a technological foundation that not only supports our existing businesses but also enables development of new businesses, Sony pursues R&D pertaining to creation technologies. This translates into focusing on three technological areas — sensing, AI, and digital virtual worlds — and developing technologies that maximize creativity, IP value, and fan engagement.
To develop these creation technologies, it is important to respect diversity in three areas: content, culture (which includes language), and the diverse viewpoints of people across different demographics. Our R&D teams must also be diverse, bringing varied expertise and experiences to bear. Sony works to support diverse, outstanding research talent who address critical social issues through technological innovation. As part of this effort, together with the leading science journal Nature, in March 2024 Sony launched the Sony Women in Technology Award with Nature to annually recognize three next-generation women researchers whose work is driving positive impact on the planet and society.
Through technology, Sony will continue to empower diverse creators to unleash their creativity
As Sony pursues its Purpose to create and fill the world with Kando together with creators, along with fundamental creation technologies our core research and development areas are sensing, AI, and virtual worlds, and their integration is key. We express this integration as a double-flywheel architecture, in which AI connects the real physical world with virtual digital worlds. In the first loop (Physical Real World), AI learns from sensing data drawn from the physical world to advance image and voice recognition capabilities. The second loop (Digital Virtual World) depicts how creators can use AI trained on large volumes of data to produce reams of virtualworld data, enabling them to generate virtual worlds and their contents or create extremely precise simulations. By driving these two loops continuously, we work to realize technological innovation that helps creators unleash their creativity and maximize the value of Sony's businesses in both the physical and virtual worlds.
Double Flywheel
Among diverse creation technologies, Sony sees AI as a tool for supporting human creativity. We are actively involved in AI ethics research in order to create fair, highlytransparent AI technology and applications. For example, in a seminal paper published in 2023, we investigated a way to reduce racial bias in facial recognition technology by making skin tone evaluation more accurate.
Sony, as a supporter of creators, strongly believes that human creativity should not be threatened or harmed by the abuse of AI, such as through infringement of copyright. The Sony Group AI Ethics Committee works to protect creator rights, build a framework for responsible AI use, and conduct test assessments of AI risks incorporating the perspectives of each Group company. Furthermore, to realize AI as public property, such as through a truly inclusive and fair largelanguage model that encompasses linguistic and cultural diversity, we think unbounded global alliances among industry, academia, and government are very important.
Born from research and development of an AI racing agent that outraces the world's best drivers, Gran Turismo Sophy™ (GT Sophy) has proven the capability of AI to provide new kinds of game experiences. Following a limited-time release in early 2023, we gathered player feedback and leveraged it to evaluate the performance of its neural network and game design. In November 2023, the AI driver became a permanent in-game feature in the Gran Turismo™ 7 (GT7) PlayStation® racing simulation game as GT Sophy 2.0, offering many players an opportunity for fun racing experiences (PS5™only). Sony plans to continue collaborating with PlayStation Studios to develop technology that can create more interactive game experiences while helping game developers make the most of their imagination and creativity.
SME works with its talent roster to align with growing opportunities in immersive entertainment. One example is how SME used virtual production technology to shoot the music video for "Jericho" by Iniko, an artist from Columbia Records. The 3D assets created through this process were then ported and optimized for Epic Games' Fortnite, where they became part of "Journey Through Jericho," a companion game from Iniko and SME that was created with Unreal Editor for Fortnite and which lets players race through the video's world. SME is continuing to expand the development of cohesive cross-platform strategies and solutions that enable artists to produce more content and reach wider audiences quickly and efficiently.
To delineate its R&D direction, "We are here for creators," Sony held its first Sony Creators Conference in Los Angeles in August 2023. There Sony showed how its creators in diverse fields, from games to animation and motion pictures, are realizing their visions by making the most of technology. The conference led into the three-day Sony Entertainment Technology Showcase (SETS). Roughly 1,300 people from diverse fields, including engineers and creators involved in Sony businesses, participated to exhibit a wealth of different technologies, holding seminars and exchange events to cultivate the creator community through technology.
Yasuhiro Ito
Senior Vice President
in charge of Human Resources and General Affairs
Sony's strength lies in its diversity of businesses and people, with roughly 110,000 unique employees working globally under our shared Purpose & Values. Looking back on Sony's history, we see how new products and services have resulted from interactions among employees from diverse backgrounds, and that this diversity of employees forms the foundation of Sony's multifaceted business operations today.
The challenger spirit of embracing the new is a legacy carried on from our founders. To remain innovative, it is important for us to continue to be an organization that embraces diverse perspectives including diverse values and ways of thinking. Evolving employee diversity helps create an organization that respects and leverages diverse perspectives. Sony understands that there are two kinds of diversity, the "diversity of attributes," including nationality, race, and gender; and the "diversity of experiences," fostered by career experiences working for Sony or other companies in various fields and job positions. We value both kinds of diversity and incorporate them in our HR policies. Personnel training that draws on diversity, career support across business boundaries, and employee engagement are areas of close focus for the entire Group going forward.
With our globally diverse HR leadership team, Sony is accelerating initiatives to support and encourage each employee's challenger spirit, so that the entire Group will grow along with its employees and build corporate value.
Sony's development and business growth are based on the values that have been passed down since Sony's founding: an insatiable appetite for new challenges and a respect for diversity. Sony has always respected the independence and aspirational spirit of individuals, cherishing a corporate culture based on the partnership of choice between Sony and each individual employee, where each party is accountable for being responsive to the needs of others. Sony's People Philosophy, "Special You, Diverse Sony," expresses Sony's approach to employees, which is deeply rooted in its culture and has been passed down to today. It conveys the wish that each unique individual who shares Sony's Purpose, and Sony, which embraces diverse individuals, will continue to grow together.
The Group-wide People Strategy is based on Sony's People Philosophy and the themes of "Attract talented individuals," "Develop talented individuals," and "Engage talented individuals."
Sony conducts strategic recruitment campaigns across the Group globally to acquire diverse talent with advanced skills, valuable expertise, and growth ambition. Examples of Sony's flagship HR initiatives include its career development programs (including an internal job-posting program, the Free Agent program and the Career Plus program), which support employees in building careers beyond business boundaries. In 2024, Sony launched a personnel exchange pilot program with third parties with the aim of developing employees' careers through cross-company experience.
Shape your own career with the spirit of freedom and openmindedness. Feel the emotion of opening up your future.
Sony has a culture that values diversity. It is a place where people inspire each other to create new value.
Sony looks deeply at the individual potential of its people and offers independent-minded employees motivation and opportunities to grow. Sony University, designed to foster topmanagement candidates, is attended by Sony Group employees worldwide as a program for exchange and interaction among diverse people and grows more active every year. The Sony Cross-Mentoring Program strategically links management teams from various businesses with next-generation leadership candidates across organizations. This initiative aims to build Group synergy and help employees expand their scope and perspective. As of 2024, there are eleven Technology Strategy Committees specific to technological fields. These committees offer members a place to share cutting-edge technical information beyond business boundaries to enhance the Group's technological strength.
It is also important to create work environments and systems that allow employees with diverse characteristics and styles of life and work to passionately embrace a broad range of challenges. Sony maintains flexible work systems and environments, taking the customs and laws of each country or region into consideration. Sony believes the effects of its HR initiatives are eventually reflected in employee engagement. Employee engagement survey results*1, which have remained high in recent years, factor into senior executive evaluations, while also quantitatively capturing the correlation between opportunities for growth and learning available to employees and employee engagement.
Sony aims to be an organization where diverse personalities, opinions, views and values coexist. To help further the advance of diversity in the Sony Group, Sony has set new numeric targets and is working to raise the percentage of women and non-Japanese nationals as a proportion of Sony Group Corporation executives*2 to more than 30%, respectively, by 2030.
It recently revised the Diversity, Equity and Inclusion (DE&I) Statement for the first time in ten years to showcase its attitude to diversity.
Sony works to globally promote greater opportunities for women as part of its efforts to ensure inclusive work environments. As of March 31, 2024, the percentage of women in Sony's workforce was 34.0%, and that of management positions held by women was 30.7% across the Sony Group. Sony will continue to advance joint initiatives with academic and other organizations to pursue gender diversity as an area of focus for Japan, where the ratio of management positions held by women is generally low and the number of women majoring in sciences and engineering is limited.
Hours Sony Group executives spent as a commitment to fostering next-generation leaders through Sony University, Sony Cross-Mentoring
Program and round-table dialogues with top management (FY2023)
The Career Plus program allows employees to spend up to two days a week on a job or project aside from their regular post. The number of employees in the program, which encourages an internal `side job,' has been increasing recently as more employees work to build careers in their own ways.
Through industry-academia collaboration, Sony has been helping foster next-generation talent from science and engineering backgrounds. Sony works to expand interest in technology among women, through such initiatives as the SONY STEAM GIRLS EXPERIENCE, which started in FY2024, scholarships for women studying science and engineering in universities in Japan, and the STEAM GIRLS Baton program, designed to spark interest in science and engineering among girls of junior high- and high-school years.
Established in 2000, Sony University provides educational programs to train top-management candidates and has seen a cumulative total of 1,500 participants to date. It focuses on improving the value it offers by involving executives in giving employees growth assistance and partnering with leading outside managerial training organizations.
Through lectures and group discussions, I was able to experience the process of creating synergies across businesses with diverse members. I will leverage the network expanded through this program and continue exploring business opportunities and collaborating across different groups.
I was able to learn more deeply and broadly about leadership, vision, and strategic planning through dialogue with Senior Executives. This program gives you the chance to learn, challenge yourself and grow as a person and leader.
This is a Group-wide leadership mentorship program for the next generation of top-management candidates (mentees). In this program, management-team members (mentors) from diverse businesses and regions share their wealth of knowledge and connections, while working closely with mentees to help them hone their leadership skills and work toward individual goals. Since its launch in FY2022, 44 mentormentee pairs have completed the program.
I learned a lot about organizational management and leadership. I had a chance to shadow my mentor, Jason, in person at work, and gained firsthand knowledge of the kind of values that drive the music industry, as well as how jobs are done. I developed a passion for becoming a specialist capable of skillfully bridging AI and the music industry.
Based on my mentor's experience, I gained valuable insights into team management and leadership amidst market fluctuations. This deepened my commitment to Sony Group's vision and future contributions.
The Technology Strategy Committee represents a Group-wide initiative to encourage the sharing of cutting-edge technical information beyond business boundaries, to enhance the Group's technological strength and train young employees. Every year over 1,700 people take part, and the UX/HCD Strategy Committee was added from FY2024.
The committee focuses on technologies with the potential to resolve issues and promote advancement in the entertainment segments. People from the entertainment segments and technology providers come together, form working groups to refine practical technologies, and discuss new kinds of experience value to offer customers.
Proof-of-concept short film produced with the Pictures segment assets to test real-time image-production technology using a game engine
Managing a Group-wide technology-exchange event to help nurture creative community within the Group
Sony manages diverse businesses with people at the core, and aims for sustainable value creation based on such diversity and medium- to long-term growth in the Sony Group's corporate value under its Purpose to "fill the world with emotion, through the power of creativity and technology," and its Corporate Direction of "getting closer to people."
In order to have people connected to each other through emotion, it is necessary to create a society in which everyone can live with peace of mind in a healthy global environment. Sony acts with due consideration of the impact of its business activities on stakeholders, including shareholders, customers, employees, suppliers, business partners, local communities, and other organizations as well as the global environment, and focuses on building trust with stakeholders through dialogue.
Through innovation and sound business practice, Sony endeavors to enhance its corporate value and contribute to the development of a sustainable society.
Based on the basic policy outlined above, Sony designates sustainability as a management priority and has established the Sustainability Department, under the supervision of the Senior Executive in charge of Sustainability, to promote a range of initiatives for the entire Group, in coordination with business units and all related divisions within the head office.
The Senior Executive in charge of Sustainability regularly reviews and assesses risks and engages in detection, communication, evaluation, and response pertaining to the risk of loss related to sustainability. The Sustainability Department reports to the Board of Directors at least once every quarter on sustainability-related initiatives and their progress. In addition, as part of reporting on each business unit's mid-range plan, the Board of Directors receives reports from the relevant unit on the sustainability challenges and opportunities relevant to its respective business operations and efforts.
The Sustainability Department strives to spread the basic policy on sustainability across Sony's business operations and, through dialogue with stakeholders and materiality analysis, identifies sustainability issues to be addressed by the entire Group, sets guidelines, and promotes initiatives. Through materials such as the Sustainability Report, Sony discloses information related to its sustainability efforts.
Each business unit considers sustainability issues and opportunities for its respective businesses, and implements sustainability-related initiatives that align with its business characteristics.
To ensure that the Group's sustainability work is compatible with changes in the social environment and the expectations of stakeholders, Sony regularly identifies and analyzes material topics related to sustainability with a medium- to long-term perspective.
In its FY2022 materiality analysis, Sony defined materiality as "material topics that are related to sustainability, impact Sony's value creation, and are determined with longer-term social change and diverse stakeholder needs in mind." From the perspectives of both the company and stakeholders, it then assessed the importance of various sustainability issues relevant to Sony.
As a result of this analysis, climate change, DE&I (diversity, equity, and inclusion), respect for human rights, and technology for sustainability were identified as the most important material topics.
Sony manages diverse businesses and works for sustainable value creation and long-term growth in corporate value under its Purpose to "fill the world with emotion, through the power of creativity and technology." The entire Sony Group endeavors to address sustainability issues, with each business leveraging its unique characteristics in taking action for sustainability.
To address a variety of sustainability issues, Sony recently established a new Sustainability Vision to more clearly articulate the direction in which the Sony Group aims to proceed, with the goal to "inspire a world filled with emotion for this generation and beyond." This vision expresses Sony's resolve to take action to create, and fill the world with, Kando through sustainability initiatives, defining the direction of its activities from the standpoints of People, Society and the Earth. Sony strives to celebrate individual differences and enrich hearts and minds so that people can share Kando with one another. It pledges to work to foster a society in which everyone can lead healthy, fair and equitable lives with peace of mind so that Kando is amplified, while ensuring that Kando is sustained by protecting and preserving the Earth, the foundation of all life.
Since its founding, Sony has worked to be a corporation that is valuable to society. The principles of its founders are deeply rooted in its corporate culture and carried forward in Sony's Sustainability Vision.
Our Purpose demands that Sony put high priority on long-term value creation focused on Kando and people. In recent years one of those initiatives has been to integrate sustainability with management strategy, which means making sustainability integral to each business operation. To that end, each business unit considers sustainability issues and opportunities for its respective businesses, and, with its own unique perspective, works to implement sustainability-related initiatives that align with its business characteristics.
More than ever corporations are expected to help address sustainability issues and disclose related information. We think it is important to deepen our understanding about the sustainability issues that Sony should address through continuing dialogue with our stakeholders and reflect this insight in our initiatives and systems to carry them forward.
Under the newly-established "Sony's Sustainability Vision," we are working to advance, and deepen, our sustainability initiatives.
Climate Change / DE&I / Respect for Human Rights / Technology for Sustainability
Celebrate individual differences and enrich hearts and minds
Sony is dedicated to supporting artists and creators, who are the source of generating Kando, and continuously strives to create environments in which they can immerse themselves in their work in a healthy manner, both mentally and physically, to make the most of their talents.
In the Music segment, the Sony Music Group (SMG) introduced its industry-leading Artists and Songwriters Forward programs in 2021 to provide our talent with support for their wellbeing, including global access to free confidential counseling with licensed therapists, and in the US, free advocacy services that assist our music creators with finding healthcare coverage and navigating issues related to their care needs. SMG also provides its artists and songwriters with a suite of tools providing earnings data and commercial insights in real time, as well as best-in-class payment solutions. Additionally, SMG is creating more financial opportunities for its long-standing talent through its Legacy Unrecouped Balance program, which pays through earnings going forward to qualifying artists and songwriters.
In Japan, SMEJ launched its B-side project in 2021 to support the mental and physical health of its artists, creators and staff. Its primary activity is to provide free counseling by certified professionals. SMEJ also provides 24/7 online healthcare consultation services, as well as a mental health checkup as part of its annual health assessments. Additionally, workshops are held regularly to raise awareness of mental health and self-care among employees.
The Sony Group is driving initiatives to enhance accessibility in its products, services, and entertainment, regardless of individual characteristics such as age, disability, capability, or circumstances. To pursue greater accessibility it works with individuals with diverse needs and implements inclusive design features that incorporate their perspectives into its productdevelopment processes.
The G&NS segment endeavors to reflect the perspectives of accessibility organizations and experts in its initiatives to create a future in which all people can enjoy games. SIE conducted weeks-long playtests with dozens of gamers within SIE and its game studios, as well as with players from the accessibility community during the development process of the AccessTM controller for PS5TM, and created a highly customizable accessibility controller kit that enables gamers with disabilities to play more comfortably and for longer periods.
Sony endeavors to celebrate individual differences and enrich hearts and minds, enabling people to better share Kando with one another.
Foster a society in which everyone can live with peace of mind
Goals for AI Ethics at Sony
Through the utilization of AI (artificial intelligence), Sony aims to contribute to the development of a peaceful and sustainable society while delivering Kando to the world. At the same time, Sony understands that the influence of AI on society is multifaceted and could have unintended consequences. Sony established the Sony Group AI Ethics Guidelines in September 2018 to guide all Sony officers and employees in utilizing AI and conducting AI-related R&D in a manner that conforms with the company's values and emerging social norms. In December 2019, Sony established the Sony Group AI Ethics Committee, and since that time has been working to strengthen its initiatives and framework for AI ethics. In 2021, the AI Ethics Office was established to provide subject matter expertise on AI ethics to all Sony business units.
Furthermore, Sony has established a liaison system to share information on AI ethics risks with regard to AI utilization in products, services and internal operations in each of the Sony Group's business units. In March 2021, in accordance with the Sony Group AI Ethics Guidelines, Sony established an internal document stipulating requirements to be complied with in the commercialization process of electronic products and services. In July that same year, Sony started conducting AI ethics assessments in the product development life cycle and has since assessed over 100 instances. Sony uses e-learning tools to promote an understanding of AI ethics among its employees and invites speakers from outside the company to discuss related issues at lectures and symposia. Responding to the current trend in generative AI, Sony Group Corporation instituted internal guidelines for its use of generative AI in FY2023.
Addressing the issue of fabricated images and AI-generated fake images spreading worldwide is a grave challenge, especially on the journalistic frontline in terms of transparency and credibility. To address such issues, the ET&S segment complies with C2PA* specifications and provides its Camera Authenticity Solution to verify image authenticity for media professionals, made possible using Sony's in-camera digital signature technology. This technology will be introduced to a few select news agencies first, then incrementally expanded to all of them.
To amplify Kando, Sony is working to foster a society where healthy, equitable and fair life is possible, in which everyone can live with peace of mind.
Protect and preserve the Earth, which is the foundation of life
Sony has been undertaking environmental initiatives since the 1970s. It instituted the Road to Zero environmental plan in 2010, which has the aim of reducing its environmental footprint to zero by 2050, and has been working to achieve the related targets from four perspectives: curbing climate change, conserving resources, controlling chemical substances, and promoting biodiversity. Recognizing the growing threat of climate change worldwide as an urgent issue, in 2022 Sony announced that it would bring forward its net-zero targets for GHG emissions (Scopes 1-3) throughout its value chain by ten years, moving the target year from 2050 to 2040.
Approximately 5% of the total GHG emissions from Sony Group operations falls under Scopes 1 and 2 emissions, while 95% is in the remaining Scope 3 emissions. More than half the Scope 3 emissions are from the electricity consumed in using Sony products. Sony works continuously to reduce the energy demand of its products. For example, a BRAVIA™ 4K LCD TV sold in FY2023 consumes roughly 59% less electricity per year than did a TV sold in FY2013. The 2023 model is equipped with an Eco Dashboard, which allows for a variety of energyconservation settings in one place. This is designed to assist users in visually understanding how they are helping reduce environmental impact. For the Crystal LED VERONA, which boasts a high-quality LED display used for virtual production and other professional applications, high luminosity-efficient LEDs and Sony's proprietary power supply design were combined to improve energy efficiency by approximately 32%＊ over conventional LED models.
Sony also endeavors to reduce GHG emissions from its supply chain, the largest Scope 3 energy consumer after its products in use. Sony insists that its major suppliers of materials and parts as well as its manufacturing partners reduce GHG emissions from their use of purchased energy to net-zero by 2030, and helps them in achieving that goal. Specifically, Sony provides them with energy-conservation expertise that the company has been building since FY2022 at Sony Group sites worldwide, as well as suggestions to help introduce or increase the use of renewable energy.
Through its environmental initiatives Sony works to help protect and preserve the Earth, the foundation of all life, to sustain Kando.
Consolidated sales and financial services revenue for FY2023 totaled 13,020.8 billion yen, up 19% compared to the previous fiscal year ("year-on-year") and is a new record. Operating income was down 7% year-on-year, and stood at 1,208.8 billion yen, marking the third consecutive year for which it was over 1 trillion yen. This increase in sales can be attributed mainly to the effects of market fluctuations in the Financial Services segment, an increase in sales of non-first-party titles (G&NS), higher revenues from streaming services (Music), and an increase in sales of image sensors for mobile products (I&SS). Despite the positive impact of increase in sales, operating income was down year-on-year due to the effect of market fluctuations for variable life insurance and other products (Financial Services), as well as higher depreciation and amortization expenses along with costs associated with the launch of mass production of a new image sensor (I&SS). Excluding the Financial Services segment, consolidated operating cash flow totaled 1,177.8 billion yen.
Net income was 970.6 billion yen, a decrease of 34.7 billion yen compared to the previous fiscal year.
(Billion yen)
| FY2022*1 | FY2023*1 | Year-on-yar Change (+/-) | |
|---|---|---|---|
| Consolidated | |||
| Sales and Financial Services revenue | 10,974.4 | 13,020.8 | +2,046.4 (+19%) |
| Operating incom | 1,302.4 | 1,208.8 | -93.6 (-7%) |
| Net income attributable to Sony Group Corporation's stockholders |
1,005.3 | 970.6 | -34.7 (-3%) |
| Sony excluding Financial Services*2 | |||
| Sales | 10,102.0 | 11,265.0 | +1,163.1 (+12%) |
| Operating income | 983.3 | 1,035.3 | +52.0 (+5%) |
| Operating cash flow | 415.5 | 1,177.8 | +762.4 |
| Investing cash flow | (1,032.0) | (794.2) | +237.8 |
(Billion yen)
| Sales/Financial Services Revenue | Operating Income | Main Factors Impacting Operating Income Change | |||
|---|---|---|---|---|---|
| FY2022 | FY2023 | FY2022 | FY2023 | ||
| G&NS | 3,644.6 | 4,267.7 | 250.0 | 290.2 | (+) Impact of increase in sales of non-first-party titles including add-on content (+) Positive impact of foreign exchange rates (-) Increase in losses from hardware mainly due to promotions (-) Impact of decrease in sales of first-party titles |
| Music | 1,380.6 | 1,619.0 | 263.1 | 301.7 | (+) Impact of higher sales for Recorded Music and Music Publishing from streaming services (+) Positive impact of foreign exchange rates (-) Increase in selling, general, and administrative expenses |
| Pictures | 1,369.4 | 1,493.1 | 119.3 | 117.7 | (-) Impact of higher marketing costs in support of greater number of theatrical releases (+) Larger number of theatrical releases and higher revenues from Crunchyroll due to growth in paid subscriptions |
| ET&S | 2,476.0 | 2,453.7 | 179.5 | 187.4 | (+) Positive impact of foreign exchange rates (+) Reductions in operating expenses (-) Impact of lower unit sales of televisions |
| I&SS | 1,402.2 | 1,602.7 | 212.2 | 193.5 | (-) Increase in depreciation and amortization expenses (-) Increase in costs associated with launch of mass production of new image sensors for mobile products (+) Impact of increase in sales of image sensors for mobile products (+) Positive impact of foreign exchange rates |
| Financial Services | 889.1 | 1,770.0 | 318.1 | 173.6 | (-) Decrease in net gains in Sony Life related to market fluctuations for variable life insurance and other products, as well as gains on real-estate sales recorded in previous fiscal year (-) Recovery of an unauthorized withdrawal of funds at a subsidiary of Sony Life in previous fiscal year (+) Recording of realized and remeasurement gains resulting from transfer of a portion of shares of Sony Payment Services |
For more financial details, please refer to earning releases, Supplemental Information, and other materials on Sony's website.
Accounts for roughly one-third of Sony’s consolidated sales. Established one of the world’s leading game ecosystems
(FY2023 operating CF: 138.5 billion yen; investing CF: -149.2 billion yen)*1
The G&NS segment is expecting to see a gradual decline in sales volume of the PS5™ as it enters the second half of the console cycle. However, in the earnings structure of the past few years, recurring business via the PlayStation™ Network through the growth of network services and add-on content has become an important revenue source in addition to software sales. This trend is based on user engagement, measured by the number of monthly active users of the entire line of PlayStation® consoles and the total gameplay time, with both metrics increasing over the long term.
From FY2023, the G&NS segment has decided to partially capitalize software development costs, considering factors such as the development process for live service games. However, the segment expenses most development costs for consoles and software, and outsources most hardware production. The segment invests in M&A and strategic partnerships, mainly with game title developers, as well as in R&D to strengthen content IP.
Forerunner of Sony’s entertainment business. Ranks first*4 globally in Music Publishing and second*5 in Recorded Music
(FY2023 operating CF: 247.1 billion yen; investing CF: -214.0 billion yen)*1
Recorded music is a relatively capital-efficient business, as revenues from digital distribution and package sales are shared with artists and other related parties. Music publishing, with its immense music catalog, has a business structure that allows for the generation of stable revenue from royalties and other sources over the long term. The music market has continued to expand since 2015 with the growth of streaming services. Currently, emerging countries are an important growth driver for this market. The Visual Media & Platform business category has multiple earnings opportunities through the extension of developed and acquired IP content, and is capturing revenue over the medium term.
The Music segment is actively engaged in discovering and cultivating new talent. It is also enhancing its support for independent and local artists, particularly as such artists account for a growing part of the market. The segment is continuously working to increase its presence in growth markets and promote expansion of contact points with the music community through The Orchard and AWAL, while expanding its business centered on music. The segment is also continuously enriching its music catalog, which is a portfolio of content IP with a high level of liquidity as an asset. Further, it is enhancing investment in anime content IP, which can be deployed and utilized across a wide variety of media.
Established unique status as an independent studio. Owner of excellent content IP, including blockbuster film franchises
(FY2023 operating CF: 175.7 billion yen; investing CF: 30.0 billion yen)*1
The Pictures segment continues working to maximize the value of content IP in motion pictures and TV productions. Motion pictures generate medium- to long-term revenue from distribution and licensing in addition to box office revenue. In FY2023, film release schedules were changed and TV program deliveries were delayed by the effects of the strikes in Hollywood. These impacts are expected to continue in FY2024. Media Networks has two stable revenue sources, namely subscription fees and advertising fees. Moreover, the dedicated anime DTC service Crunchyroll aims for growth with profitability. The segment is working to maximize long-term IP value and stabilize revenue.
The Pictures segment has made significant investments in content production and acquisition. Since these are capitalized as deferred film production costs and TV broadcasting rights, the assets tend to be large. Investments include content production in motion pictures and TV productions, as well as acquisition of TV broadcasting rights and digital distribution rights for content in Media Networks.
Sony's founding business. High added-value made possible by technologies that differentiate Sony in images, sound, and communication
(FY2023 operating CF: 322.8 billion yen; investing CF: -105.6 billion yen)*1
The ET&S segment has established a two-axis business structure, comprising a Profit Axis and a Growth Axis, and is shifting its business portfolio. In the Profit Axis businesses, earnings are being driven by products with high added- value, such as mirrorless interchangeable-lens cameras and headphones. The segment has handled fluctuations in supply and demand accordingly and secured stable earnings on the strength of its comprehensive cross-group operations, from development to production, distribution, and sales. As for the Growth Axis businesses, the segment also aims to increase the proportion of solution and recurring businesses which are more resilient to external changes to further stabilize revenue.
The ET&S segment's R&D investment is focused on the development of technologies that emphasize growth in real-time value and fusion of the real and virtual worlds, in addition to high-value-added products. Especially in recent years, the segment has invested capital in growth areas such as sports and life sciences, where it can leverage its technologies that have been long cultivated in the electronics area. Capital expenditures mainly consist of recurring investments within the scope of depreciation, and no major expenditures are planned at present.
Built on the strength of CMOS image sensor technologies. Achieved high market share from expansion of high-value-added products
(FY2023 operating CF: 278.3 billion yen; investing CF: -369.0 billion yen)*1
The core products of the I&SS segment are image sensors. Image sensors have shown continuous growth since the 2010s, mostly for mobile products. The segment aims to continue leading the trend in adopting larger mobile sensors with higher image quality and performance, to ultimately expand its market share by revenue. The segment is also exploring broader applications for sensors in the automotive and industrial spaces, as well as products with AI-processing capabilities for the retail and logistics industries.
The I&SS segment is investing to increase the production of image sensors; however, the amount of capital investments during the fifth mid-range plan period is expected to be around 70% of the investment amount during the fourth mid-range plan period, due to the optimization of new investments. Moreover, R&D efforts are progressing in the areas of automotive business as well as the development of both software and new products that apply edge AI processing technologies. The segment continues to exercise strategic inventory management, utilizing its current production capacity and optimizing the timing of future capital investments while carefully examining demand projections.
Established solid status in Japan with services tailored to each individual customer
Sony Life earns stable revenue by providing support for long-term asset building and reasonable coverage through promoting total life planning services tailored to helping each individual customer achieve their goals. Sony Assurance earns revenue primarily from direct sales of a variety of insurance products (mainly automobile insurance and fire insurance) to individual customers. Sony Bank earns revenue primarily through offering mortgage loans and foreign currency deposits to customers via online services.
While focusing on remaining operationally sound as a financial institution, the SFG invests in initiatives designed to accelerate the growth of its financial services' operating companies, such as expanding products, services, and sales channels. To realize growth strategies, SFG plans to continue investing in IT, for building digital platforms, and in human resource development.
To Be "The Best Place to Play"
SIE aims to continue to make PlayStation® “The Best Place to Play” with investments into services, devices, and content, and to continue to broaden our reach, our audience, and the value we create for players and creators.
Hideaki Nishino
CEO of Platform Business Group
Sony Interactive Entertainment LLC
PlayStation Studios is a world-class network of creative teams that has delighted gamers by delivering beloved titles and characters on console, PC, mobile, and beyond with IP adaptations in film and TV.
Hermen Hulst
CEO of Studio Business Group
Sony Interactive Entertainment LLC
SIE has grown PlayStation® into a community connecting players and creators to fun experiences and exciting adventures. Cherished content, innovative hardware, and superb services makes PlayStation® "The Best Place to Play." SIE's brand power, supportive services, and sophisticated monetization methods attract creators as "The Best Place to Publish."
These two virtuous cycles continue to deliver excellence with the Platform Business ensuring a firm foundation for the Studio Business to further evolve upon. SIE has successfully grown the user base and maintains strong momentum for PS5™ while extending support beyond the console. PlayStation Studios continues to devote efforts into offering interactive experiences on PS5™. Spearheading investments beyond console, SIE is working to bring its world-class IP to more players on more devices, is broadening access to the PlayStation® experience to share its inspiring stories, reach wider audiences, and earn a place in more players' hearts.
Looking ahead, SIE plans to make phased investments in content and technology while maintaining discipline over development processes and driving returns on investments and acquisitions made over the past several years.
PlayStation® has continued to grow rapidly, with combined PS4™and PS5™ users reaching 116 million monthly active users*1, and PS5™ sales reaching 61.7 million cumulative units*2. As SIE grows its diverse content portfolio, PS5™ gamers tend to have higher gameplay hours and stronger spending habits. SIE has built Playstation®Plus into a profitable and reliable service where over half of PlayStation® players are now subscribers. The subscriber base for the Extra and Premium plans have grown asbetter content value, features, and services are offered. Peripherals are a major part of PlayStation®, promoting engagement, building loyalty, and enhancing the player experience. Notable releases in FY2023 include PlayStation Portal™, which increases the number of ways players can enjoy their favorite games, and the latest PULSE Explore™ wireless earbuds to immerse players further. SIE continues its efforts to extend PlayStation® beyond the console with PlayStation DualSense® controller support now available in PC releases.
Looking forward, SIE aims to continue to strengthen the solid foundation of PlayStation® and drive profitability and margins by capitalizing on exceptional engineering and our expertise in gaming, while developing new products that leverage innovative technology to level-up the PlayStation® Experience.
Studio Business Group (SBG) and PlayStation Studios have fortified SIE's position as the industry leaders in single-player narratives while expanding efforts into live-services and beyond the console.
SBG proves itself as an IP powerhouse year after year with beloved IP such as The Last of Us, Ghost of Tsushima, and Horizon. Our IP's stature was further bolstered this year with the release of the highly-praised Marvel's Spider-Man 2, which has sold 11 million units*3 and with the critical acclaim for Destiny. Destiny
also exemplifies SIE's live services initiative and expertise, aimed to reach new audiences, unlock new monetization models,
and evolve for the future. In addition to live services, SBG sees opportunities in non-console formats and is pushing the boundaries with PlayStation Productions. Prior investments to extend the PlayStation Experience beyond the console came to fruition with the cinematic release of Gran Turismo and the
launch of HELLDIVERS 2 on PC and PS5™, which were met with resounding success.
Amid rapid and transformative growth, SBG balances profitability with reliable development cycles, and is focused on creating efficiencies and sustainable development. Leveraging its expansive resources and knowledge across the portfolio, SBG continues to push the limits of play as an IP Powerhouse.
Collaborating with Group companies is part of SIE's DNA. SIE aims to maximize the value of game IP through initiatives such as media adaptations, and also undertakes new engagements to connect with new customer segments and markets by collaborating with other Group companies such as Crunchyroll.
Further, SIE supports core sustainability themes such as accessibility, environmentalism, and DE&I as a part of the Sony Group. SIE is a leader in in-game accessibility functions with the development of the Access™ controller, and PS5™ incorporation of efficient controller charging along with new energy-efficient download methods to help further reduce PlayStation®'s climate impact.
PS5™ User Engagement compared with PS4™
©Solo Leveling Animation Partners
© TYPE-MOON / FGO PROJECT
Sony Music is proudly positioned at the crossroads of music, entertainment, and technology. Putting our artists and songwriters first, we aim to continue to aid their development with our teams adopting new technologies, entrepreneurial creative vision and innovative data interpretation. All this is expected to be achieved in a spirit of integrity, fairness and transparency.
Rob Stringer
Officer in charge of Music Business (Global)
Chairman, Sony Music Group; CEO, Sony Music Entertainment
As a comprehensive entertainment enterprise, we focus on creating new IP with music, anime, and games as the core content, which we combine with our diverse solution functions to realize various business ideas.
Shunsuke Muramatsu
Officer in charge of Music Business (Japan)
President and Representative Director of the Board,
CEO, Sony Music Entertainment (Japan) Inc.
From its position at the intersection of music, entertainment, and technology, SMG supports its artists and songwriters as they stay on the cutting edge of creativity.
In the business environment, the music market overall is growing vigorously, mainly in the area of streaming, with the recorded music industry having expanded continuously for nine consecutive years*1, and the music publishing industry for eleven consecutive years*2. Over the medium term going forward, the market is expected to continue to grow at an average annual growth rate in the mid-to-high single digits.
Against this backdrop, SMG will accelerate the growth momentum of the Music segment through aggressive investment. In FY2023, SMG's outstanding artists and songwriters, as well as its expansive catalog, delivered excellent results on various hit charts. Looking ahead, SMG will continue aiming to outgrow the market by driving the evolution of the music ecosystem through multiple partnerships.
Status of Market Share and Hit Charts in 2023*3
In addition to offering its artists and songwriters a full set of progressive services, SMG continually grows its company and the opportunities it offers its creators, including independent labels and artists through acquisitions such as The Orchard and AWAL. These initiatives have been building a robust music ecosystem for SMG overall while creating a foundation for future growth. In 2023, Miley Cyrus' "Flowers" became the top-selling song in the world, and
this year albums by Future and Beyoncé captured the global No. 1 spot as well. SMG is also focused on business expansion in growth markets through acquisitions in regions like Latin America, India, the Middle East and Africa. While nurturing its growth foundation through hit creation and catalog expansion, SMG will also meticulously connect these to earnings opportunities across a wide array of digital platforms and drive expanded fan engagement.
SMG has also expanded services for creators through investments in areas such as merchandising, which is seeing notable growth from its Ceremony of Roses company, as well as in its live experience offerings. To date, more than 70,000 artists and songwriters have taken advantage of the data reporting, commercial insights, and payment solutions SMG offers through the Artists and Songwriters Forward programs, promoting transparency, remuneration, and wellness.
AI represents a generational inflection point for music and content. SMG aims to take an active role in helping to establish a sustainable business rights model within the industry. AI could be a multi-dimensional tool for creativity and efficiency. SMG aims to follow our artists and songwriters creatively in the AI space while seeking to protect their rights at every step.
Moreover, SMG continues to further strengthen links among businesses in the Sony Group. It will look to create further synergies, including collaborating on brand partnerships, unscripted films and documentaries as well as soundtracks. For example, Peso Pluma recently participated in a Sony Electronics' "For the Music" audio hardware campaign.
Based in and operating from Japan, SMEJ's management policy is to "maximize hits by strengthening creativity and business exploitation." SMEJ will promote continuous hit creation by strengthening marketing, development and nurturing of fandom artists who create highly passionate fan communities, expansion of solutions for enhancing fan engagement, and further overseas expansion of artists in collaboration with SMG. Furthermore, on the topic of overseas expansion, YOASOBI's "Idol" became the first Japanese-language song to top the U.S. Billboard Global Chart "Global Excl. U.S.," and enjoyed a total number of streams exceeding 700 million plays as of April 2024. The song went on to receive an enthusiastic reaction from fans not only in Japan, but around the world.
SMEJ has been working to diversify its revenues in areas including anime and games over the past decade. Its focus now will be to continue its efforts in the production of quality IP/content and accelerate mutual development of anime, music, games, and solutions centered on IP, maximizing its IP economic zone and growing by maintaining a healthy business portfolio. In anime,
it will focus on overseas development, including accelerating collaboration with Crunchyroll, as well as on enhancement of the commercialization business. For games, SMEJ will look to deploy a wide range of IP, such as Fate/Grand Order, on optimal devices.
SMG works alongside its peers, suppliers, artists, and fans to raise the bar as an industry on environmental standards and expectations. SMG has a commitment to DE&I with a focus on attracting and supporting the careers of employees globally. In addition, SMG actively promotes initiatives in philanthropic areas such as social justice and humanitarian support.
Produce and distribute world-class movie, television, and video content to consumers globally around Sony IP and/or serve specific communities of interest
Despite ongoing industry turbulence and transformation, with a strong leadership team and a clearly defined strategy in place, SPE posted another year of solid results. These results reflect the strength of SPE's market position overall and the recognition of the studio as a stable partner to talent and platforms across all our lines of business. SPE will build on these strengths through continued investment in key areas of growth.
Anthony Vinciquerra
Officer in charge of Pictures Business Chairman and CEO,
Sony Pictures Entertainment Inc.
Given the studio's efforts to streamline and strengthen the company over the last few years, combined with its strategic decision not to jump into the crowded general entertainment streaming space, SPE believes it is well-positioned to meet the unprecedented challenges in the industry head on. SPE's strength has been driven by its position as one of the leading independent studios globally, its stability in the industry to talent, and its role as a supplier of world-class, platform-defining content. SPE will continue to aim for business growth by promoting the following strategies.
The use of valuable IP is key to SPE’s content strategy. SPE has developed strong franchises such as Jumanji and Ghostbusters. To maximize the value of its IP, SPE is also pursuing earning opportunities in LBE, and in January 2024 opened its first immersive entertainment destination, Wonderverse, just outside Chicago.
In film production, SPE has distinguished itself from the increasing competition among streaming providers by establishing its core strength in content production. SPE continues to maintain its commitment to theatrical distribution, which has earned the company both box office success and a strong reputation amongst talent and filmmakers. Most recently SPE's Bad Boys Ride or Die kickstarted the summer box office. The film is the fourth film in the now billion-dollar franchise. Meanwhile, in television production, SPE continues to hold a strong position, providing content to all partners and negotiating first-rate deals. Recently, Sony Pictures Television’s The Night Agent was the most-watched TV series on Netflix in 2023, and Dark Matter premiered on Apple TV+ as the top show on the platform worldwide.
SPE produces and distributes a variety of content, including IP franchises as well as popular films, TV drama series, game shows, non-fiction series, and content for children, and is expanding its content library. The company is home to popular film franchises including Spider-Man and Ghostbusters, and the beloved US game shows, Wheel of Fortune and Jeopardy!, which are the first and second most-watched entertainment programs on linear TV*1.
Cross-company collaboration within the Sony Group provides SPE with a powerful competitive advantage. Video adaptations of game IP continued to deliver outstanding results in FY2023 with the successful film adaptation of Gran Turismo and the TV drama series The Last of Us, and several more projects are currently
in production. In the music domain, SPE is jointly developing multiple films and TV programs, such as artist documentaries. On the technology front, in January 2024 SPE established Torchlight, an advanced visualization facility that allows creators the opportunity to explore, play and develop their visions in realtime prior to going into production. Going forward, Torchlight is designed to be used to realize the creative vision of content creators for upcoming projects.
SPE offers the DTC service Sony LIV in India as well as the dedicated anime video-streaming service Crunchyroll, both services that focus on specific communities. The number of paid subscribers to Crunchyroll exceeded 15 million as of July 2024, and the service continues to deliver exciting anime productions to hardcore anime fans. SPE is currently working with outside partners and delivering services in growth markets while also expanding theatrical distribution of anime films, e-commerce, and other areas in a focused effort to drive deeper engagement.
SPE recently acquired Alamo Drafthouse Cinema, the unique and growing theatrical exhibitor currently operating in 25 metro areas in the U.S. Joining forces with Alamo Drafthouse further reinforces SPE's long-held commitment to theatrical exhibition and continued initiatives in experiential entertainment.
SPE promotes expansion and diversification of its talent pipeline through innovative programs, including the Diverse Directors/ Writers Programs, and Creative Diversity Fund. In environmental efforts, SPE is also guided by the Sony Group's environmental plan, Road to Zero, and is working to reduce GHG emissions and use of disposable plastics.
$1.9B
$965M
$856M
$407M
$403M
$242M
$220M
$202M
Create the future of entertainment through the power of technology together with creators
We aim to leverage our creation technologies for the pursuit of new entertainment and a future full of Kando together with creators.
Kimio Maki
Officer in charge of Entertainment, Technology & Services Business
Representative Director, President and CEO,
Sony Corporation
The mission of the ET&S segment is to create the future of entertainment through the power of technology together with creators. The segment creates new entertainment with creators around the world, utilizing Sony's distinctive technologies centered on the fields of imaging and sound.
While the business environment is expected to continue changing rapidly, ET&S employees are working in unison to establish a business structure with two axes, a Profit Axis and a Growth Axis. The segment has structured its business portfolio from the perspectives of profitability and growth potential, and it aims to evolve further based on the strategies defined for each of the three themes below. The segment's numerical target for FY2026, the final year of the fifth mid-range plan, assuming net sales at around the same level as FY2023, is to improve the operating income margin from the FY2023 level to around 9%, mainly by improving the profitability of Profit Axis businesses and promoting a portfolio shift to Growth Axis businesses.
Furthermore, the segment will aim for over one-third of its operating income to be generated from Growth Axis businesses.
The TV and smartphone businesses plan to control risk by increasing profit levels and reducing volatility. In operations,the segment plans to implement structural reforms in sales, manufacturing, and product design. The TV business plans to develop displays with the goal of realizing creators’ production intentions, while the smartphone business is aiming to strengthen its positioning in data communication devices and accelerate business transformation.
As the core of the Profit Axis businesses, the segment aims to pursue further growth by strengthening its stable revenue and profit base while expanding its business area. The imaging business plans to contribute to unleashing the creativity of diverse creators through the development of real-time creation technology and, through collaboration with the I&SS segment, proprietary sensors. Moreover, the imaging business is aiming to strengthen the imaging ecosystem by applying software value to strong hardware, and expanding its highly profitable solution business in remote, 3D content, live streaming, and other areas.
The sound business will work to expand its field by strengthening branding through creating with artists in the headphones market and with pro e-sports gamers and teams, as well as by developing the pro audio market, such as studios.
The segment plans to accelerate its business expansion by expanding investments, including in human resources, and evolving its business models. The sports business, already boasting high market share in officiating services with Hawk- Eye, aims for further growth by helping various sports leagues to expand their fanbases, through enhancing the entertainment potential of sports through visualization technology. The visual solutions business, with its virtual production technologies as a core, plans to strengthen content creation and services as well as promote the development of new markets. The life science business is aiming to contribute to the elucidation of cancer and immune mechanisms through expanding its customer base by leveraging its flow cytometer with world-leading analysis capabilities and cloud solutions. The network service business, meanwhile, aims to strengthen the subscriber base for the NURO optical fiber broadband service and plans to also increase ARPU by promoting the shift to 10G and enhancing optional services. The segment plans to also strengthen incubation, co-creation, and R&D as initiatives to create business opportunities for further growth.
Regarding the environment, in FY2023 the segment achieved full operation of its major offices and manufacturing sites with 100% renewable energy. Going forward, the segment expects to continue to focus on reducing energy consumption when using its products, mainly focusing on TVs, and on further reducing the use of virgin plastic, including through expanded use of recycled materials developed by Sony. Meanwhile, for accessibility, the segment aims to incorporate inclusive design into nearly all product development processes by FY2025 and reflect in product development the needs of those who require accessibility features. The segment plans to address DE&I by accelerating initiatives to resolve the gender gap in Japan, which is an emerging social issue, and creating an environment in which diverse employees can flourish.
ET&S Business Portfolio
Spark people's imaginations and enrich society, by providing inspiring, intelligent, and reassuring solutions that push the boundaries of image quality and cognition with transcendent imaging and sensing technologies
Under our corporate slogan, "Sense the Wonder," we aim to work with various stakeholders to co-create new value and achieve growth with the aim of sparking people's imaginations and enriching society.
Terushi Shimizu
Officer in charge of Imaging & Sensing Solutions Business Representative Director,
President and CEO, Sony Semiconductor Solutions Corporation
Under the fourth mid-range plan (FY2021-FY2023), the I&SS segment made capital investments, equity investments, and R&D investments in order to seize growth opportunities in a business environment that was highly uncertain and opaque. As a result, the segment's growth has outpaced the market, mainly in image sensors, further consolidating its number one position by revenue. On the other hand, issues remain to be addressed going forward, namely deteriorating investment efficiency (including yield issue), and improving profitability.
Considering this situation, under the fifth mid-range plan (FY2024- FY2026), the segment's basic strategy is to restructure the business foundation for growth with profitability. The segment's business strategy clarifies its direction in each of the three business areas outlined below, aiming to achieve growth with profitability through balanced business operations and capital investments. The target for image sensor shares by revenue has been set at 60% for 2025, as before, and the segment will look to further increase its share after that, with expectations for medium- to long-term market growth.
Hence, the segment will continue to make essential capital investments for growth, but by carefully selecting investments and making maximum use of existing assets. In this way, it plans to reduce capital investments to around 70% of the amount under the fourth mid-range plan. While increasing the amount of investment,the segment will also work to improve R&D investment efficiency by examining themes and reducing the ratio of investment to net sales from the previous 15% level. Continuing to focus on ROIC as a profitability indicator, the segment will aim for a range of 10-13% under the fifth mid-range plan. In its long-term focus point for the next mid-range plan onward, I&SS will aim to achieve ROIC of 20% or more, based on factors such as improving profitability, and expanding use of existing assets.
Target for Image Sensor Share by Revenue*1
The segment will continue to invest in mobile image sensors, which are expected to drive growth of the overall I&SS segment over the medium to long term. Notably, video is expected to see growth associated with increasing usage for creative work and communication, necessitating greater real-time capabilities than does work with still images. Among the multiple cameras mounted on devices, there is significant potential for technological evolution in the area of sub-camera (telephoto and ultra-wide-angle) sensor characteristics in particular. Riding the trend toward larger sensors for sub-cameras as well as main cameras, the segment aims to leverage its technological advantage to further strengthen its position in the market.
Sensor Size Increase in Mobile Image Sensor Market*2 (only in high-end models)
The segment will work to maintain and strengthen its competitiveness in image sensors for cameras as well in industrial and social infrastructure while maximizing its earnings.
Furthermore, it plans to make strategic investments in automotive image sensors, system solutions, OLED Microdisplays, semiconductor lasers, and other areas as strategic business areas that it plans to develop into future business pillars. In the automotive area, the segment is aiming to promote development of differentiating technologies to capture technology trends, such as the use of increasing numbers of automotive cameras, smaller pixel sizes, and larger pixel counts. The segment is aiming to achieve a 43% share of the automotive image sensor market on a revenue basis by FY2026. Moreover, the segment has focused on Heat-Assisted Magnetic Recording (HAMR), which dramatically improves the recording density of hard disk drives (HDDs). It has become the first in the world to begin mass production of semiconductor lasers, a key device for realizing HAMR, in collaboration with Seagate Technology. In the system solutions area, the segment is steadily advancing with demonstrating the value of AITRIOS™, an edge AI sensing platform, in its primary target markets of retail, logistics, and factories.
The segment requires a significant amount of natural resources and energy. Recognizing that it therefore holds a particularly large responsibility for the natural environment and society, it has formulated the "Sustainability Compass" as its proprietary ESG policy and is strengthening its initiatives to realize its "Social Vision Seven" by 2030. Among these seven principles, the segment is focusing on accessibility, to help realize "a society where the world is full of active people with vital roles." The segment is also working to develop new value propositions that deliver visual information to non-visual sensory organs through multimodal integration of imaging and sensing technologies with ring-shaped cameras, AR glasses and others.
With the ability to stay close to people and the power of technology, we will continue to be a supportive presence for our customers
Utilizing a wide variety of information, SFG provides advice tailored to each and every customer's life plan. Providing products and services suited for a society of longevity, SFG offers safety and peace of mind by facilitating wealth-building and contributing to economic security. SFG employs technology to create new insurance products and services to increase safety and peace of mind in society.
Additionally, it aims to make life more convenient by improving access to financial services and promoting innovation.
As a comprehensive financial group with businesses including life and non- life insurance, banking, and nursing care, we are committed to making every effort to continue supporting our customers in living true to themselves by staying close to people and using the power of technology.
Toshihide Endo
President and CEO, Representative Director, Sony Financial Group Inc.
SFG has always pursued a different business model than conventional financial institutions, providing products and services with high added-value by meeting the needs of each and every customer through differentiation. Under the fourth mid-range plan (FY2021-FY2023), SFG steadily expanded its earnings by promoting measures based on the theme of self-transformation, such as strengthening its competitive advantages and altering its profit structure. However, considering future growth, it is essential for it to both expand investment in aspects such as IT systems and human resources, and maintain a sound financial position. Hence, SFG will enhance its financial flexibility as well as propose and implement its own unique growth strategy through the execution of a partial spin-off from Sony Group Corporation, and listing of shares of Sony Financial Group Inc., planned for October 2025.
As it embarks on this new growth journey, SFG has defined its new objective as "With the ability to stay close to people and the power of technology, we will continue to be a supportive presence for our customers." This objective clarifies SFG's commitment to being a supporting presence by staying close to people through three "For Life" concepts: "Health for Life," to live with energy and vibrance, "Asset for Life," to live with financial well-being, and "Kando for Life," to live a life filled with emotion. Based on this objective, SFG has started a mid-range plan (FY2024-FY2026) aiming for growth through both exploitation and exploration ahead of its listing on the stock market.
In addition to growth in the Lifeplanner channel, which boasts peerless customer contacts, Sony Life has seen significant growth in its Agency channel. Going forward, Sony Life will focus on DX, business process reform, and other initiatives to create an environment in which top-tier Lifeplanner sales specialists and Agency supporters can dedicate themselves to higher value-added activities. At the same time, Sony Life will aim to enhance products and services not only for families, its core customer segment, but also for corporate customers, which have made a significant
contribution to performance in the previous mid-range plan, as well as the affluent and senior segments. It will also continue to expand capital-light savings-type and protection-type products and build a more profitable product mix.
Sony Assurance, in addition to building on its strong brand recognition and customer satisfaction, will promote development of potential customers by enhancing its products and services.
Sony Bank will strengthen its response to customer needs and environmental changes including interest rates, with a primary focus on the mortgage loan and foreign currency businesses, which are its growth engines.
Under the new mid-range plan, SFG will accelerate growth by expanding its customer segments beyond the mainstay family segment. It will build touchpoints with younger generations, who are the potential customer base for the future, through using non-financial and entertainment services. For the mass affluent market, it will develop comprehensive services through new experience-based branches called Hoken Seisakusho, while strengthening its response to the needs of pre-seniors and seniors through senior life-planning and other services.
After the spin-off, SFG will further reinforce business collaboration centered on entertainment, while exploring the development of
AI-based assistant Lifeplanner sales specialists, in addition to a digital bank, looking to create a seamless customer experience from non- financial to financial services.
In its Sustainability Committee, SFG conducts deliberations on issues and risks regarding its overall sustainability, including climate change response, ESG investment promotion, and the creation of workplace environments that consider DE&I. Looking ahead, SFG will advance its sustainability initiatives according to its own material topics, which have been newly formulated with a focus on the three "For Life" concepts.
SFG Core Concept
SFG Objective
Yoshihiko Hatanaka
Outside Director
In FY2023, Sony recorded its highest net sales ever and maintained a high profit level.
The Board of Directors conducted lively discussions with the management team regarding growth strategies and issues to be addressed in the six main segments, synergies between businesses, our business portfolio, strategic investments, and capital allocation policies, including shareholder returns. Based on these discussions, the Board passed a resolution on the fifth mid-range plan, starting from FY2024. We also received timely reports from the management team on various issues, including issues associated with the evolution of AI, which is to have a major impact on Sony's business, geopolitical risks, and cybersecurity. These issues were discussed and confirmed by the Board. Furthermore, we also continuously confirmed progress on Sony's sustainability initiatives, compliance activities, and so forth.
On the topic of sustainability, I myself had the opportunity to exchange dialogue with companies providing advisory services for institutional investors in October 2023. They are increasingly focused on understanding the track record and approach of the companies they invest in regarding areas such as the environment, human rights, and governance. I reaffirmed that their expectations for Sony in these areas are highly significant.
Regarding the composition of our Board of Directors, in FY2023 we welcomed the addition of two U.S.-based Directors who hold deep knowledge of the entertainment, digital, and network businesses, which has enhanced the quality of the Board's discussions in these areas. On the operational side of the Board, we have continued using online meetings that connect Japan, the U.S., and Europe while maintaining meeting quality. At the same time, we als value opportunities to have all Directors meet in person. At the strategy workshop in December, the Directors convened in a common space with the management teams of corporate and each major business over two days, during which they engaged in rich discussions about strategy and challenges from a medium- to long-termperspective. In September, we visited the head office of the Pictures business and the game development studio, as well as a studio where Sony's camera division works together with picture production professionals, all located in greater Los Angeles, U.S. On this visit, we observed creative production on the front line and exchanged views with management in the Pictures business. Opportunities such as these enable outside Directors to learn about Sony's diverse global businesses and human resources. Moreover, they are also meaningful for maintaining a healthy level of tension in the relationships amongst the Directors, as well as between the Directors and the managementteam. As such, I would like to continue these opportunities in the future.
Appointing human resources to steer Sony's management is one of our most important tasks, and I feel that the role of the Nominating Committee has become increasingly crucial. Since FY2023, the Chairs of each committee have become members of the Nominating Committee. This facilitates the process of including the input of each committee in the evaluation and discussion of our succession plans for Directors and managements. I believe that this has improved our structure to facilitate decision-making through multifaceted discussions. Under this structure, in FY2023, we received progress reports on the succession plans for Senior Executives who are responsible for head office functions and importan management roles in each business, such as G&NS. We discussed and evaluated the plans from perspectives such as strengthening organizational capabilities and enhancing the competitive advantages of each business. For the selection of outside Directors this year, we nominated Shingo Konomoto as a candidate for a new Director under the policy of nominating individuals with experience as CEOs, and this nomination was approved at the General Shareholders' Meeting. We will engage in even deeper discussion of the management succession plan in FY2024, aiming to further advance this function, and discuss Director candidates with a view to ensuring a wide range of experience, expertise, and diversity on the Board of Directors.
In FY2024, the environment surrounding Sony is expected to change significantly. The Board of Directors will be even more attuned to changes in technology and the business environment, supervising and supporting the management team from the viewpoint of shareholders and other stakeholders. Simultaneously, we will contribute to the steady execution of the fifth mid-range plan, and the continuous increase in corporate value of the Sony Group with a longerterm perspective.
Wendy Becker
Outside Director
In FY2023, the utilization of new technologies such as generative AI and virtual production has been further advancing, and in turn impacting the Sony Group, including our core philosophy and how we and our creator partners generate value. Emerging countries, including India, referred to as the "global south," have been increasingly gaining prominence, and geopolitical risks continue to exist. However, Sony did not view these issues simply as risks, but also as opportunities for its growth and transformation, and has undertaken proactive initiatives. In the Board of Directors, we have spent a significant amount of time on discussions about the future and growth of the Sony Group, including new business fields, the mobility business, leveraging technologies and capturing growth markets. In FY2024, the Board of Directors aims to contribute to the enhancement of the Sony Group's corporate value through effective oversight of the management, and through continuing discussions among Directors and between Directors and the management team. With its diverse businesses, Sony's executive remuneration is, in principle, comprised of a fixed remuneration, a remuneration linked to business results ("bonus"), and stock-based compensation. This is designed to incentivize the short-, medium-, and long-term growth of the Sony Group by aligning our efforts with the expectations of our shareholders and various other stakeholders, including our communities and employees. In FY2023, the Compensation Committee introduced the "Group Sustainability Evaluation" to determine a bonus structure that focuses more on the evaluation of efforts by executives to enhance sustainable growth of the Sony Group. This includes management succession planning, investment in human capital, and sustainability initiatives related to social value creation. The Committee also introduced a clawback policy to strengthen each executive's commitment to governance. In FY2024, we will determine evaluation measures for the bonus structure based on the fifth midrange plan, as well as consider the programs of stock-based compensation not limited to the use of existing plans. By doing so, we aim to further link compensation to short-, medium-, and long-term business performance and shareholder value, ultimately to support the further growth of the Sony Group.
Joseph A. Kraft Jr.
Outside Director
In FY2023, the Audit Committee's key themes were non-financial information disclosure, risk management, and subsidiary management. The committee conducted its audit activities by receiving reports from, and exchanging opinions with, the internal control department of the executive side, the internal audit departments of headquarters and each business domain, and the independent auditor. Regarding financial information, the committee received regular reports about the impact of the new IFRS 17 accounting standard adopted by the life insurance business from the executive side and the independent auditor regarding checking the financial statements. In FY2024, the committee will receive reports from, and exchange opinions with, the executive side and the independent auditor regarding the aforementioned key themes. The committee will focus further on dialogue with the management team and conduct effective auditing over Sony's wideranging businesses. We will also strive to improve the quality of our audit activities by deepening our understanding of the financial services business, which is scheduled to be partially spun off, and the entertainment and semiconductor businesses, which are growing in importance to management year by year.
Threats in cyberspace increase each year and have become one of the biggest risk factors companies face throughout the world today. Advances in AI and computing technology will enrich the business environment, but can increase risks when used for purposes such as sophisticated cyberattacks and fraud. As a Director in charge of information security, I coordinate with organizations responsible for information security on the executive side to increase awareness of the crisis regarding cyber risks in the Board of Directors and the management team, and support the enhancement of the information security management system across the Sony Group. Sony's Purpose is to "fill the world with emotion, through the power of creativity and technology," and it is vital that Sony remains a trusted presence in the digital space. We will continue contributing to the maintenance and enhancement of an effective information security system to uphold the trust placed in us by diverse stakeholders.
The Board determines Sony's fundamental management policies, and oversees the management of Sony's business operations. As part of this role, the Board has the authority to (i) appoint and dismiss statutory committee members, and (ii) appoint/dismiss and/or conduct oversight of appointment/ dismissal of Senior Executives. In addition, in order to improve Directors' understanding of Sony businesses so that the Board, a majority of which is comprised of independent outside Directors, can effectively perform its oversight role, the Board has conducted events such as two-day workshops and site visits. The Board also periodically receives reports on and discusses sustainability and Information Security matters, which are more focused on recently, and oversees such matters.
The Nominating Committee determines the content of proposals regarding the appointment/dismissal of Directors to be submitted for approval at the General Meeting of Shareholders, and evaluates management succession plans for the CEO and other executives. The Compensation Committee sets policy on the content of compensation for Directors, Corporate Executive Officers and other officers, and also determines or oversees the determination of their individual compensation in accordance with such policy. The Audit Committee monitors the performance of duties by Directors and Corporate Executive Officers, and oversees the independent auditor.
| Committee Membership/Assignment | Experience and Expertise, Etc | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name | Position/Principal Activities Outside Sony | Years as Director | Audit Committee Member | Nominating Committee Member | Compensation Committee Member | Director in Charge of Information Security | CEO or Equivalent Position of Business Enterprise | Global Business | Diversity (Gender/ Nationality) | Engineering/IT/ Technology | Sony Group Business Segment/ Relevant Industry | Finance/ Accounting | Risk Management/ Government Relations |
| 1. Kenichiro Yoshida | Representative Corporate Executive Officer, Chairman and Chief Executive Officer | 10 | - | - | - | - | ● | ● | ● | ●*2 | ● | ● | |
| 2. Hiroki Totoki | Representative Corporate Executive Officer, President, Chief Operating Officer and Chief Financial Officer | 5 | - | - | - | - | ● | ● | ● | ●*2 | ● | ● | |
| 3. Yoshihiko Hatanaka*1 (Chair of the Board) |
Outside Director, Shiseido Company, Limited Former Representative Director, Chairman of the Board, Astellas Pharma Inc. | 5 | Chair | ● | ● | ● (Healthcare) |
● | ● | |||||
| 4. Wendy Becker*1 (Vice Chair of the Board) |
Chairperson of the Board, Logitech International S.A. Independent Non-Executive Director, Chair of Remuneration Committee, GSK plc | 5 | Chair | ● | ● | ● | ● (Telecommunication Service/ConsumerGoods)) |
● | |||||
| 5. Sakie Akiyama*1 | Founder, Saki Corporation | 5 | ● | ● | ● | ● | ● (IT/Devices) |
||||||
| 6. Keiko Kishigami*1 | Certified Public Accountant in Japan Board Member, WWF Japan | 4 | ● | ● | ● | ● | |||||||
| 7. Joseph A. Kraft Jr.*1 | CEO, Rorschach Advisory Inc. | 4 | Chair | ● | ● | ● (Financials) |
● | ● | |||||
| 8. Neil Hunt*1 | Non-Executive Director, Roku, Inc. Former Chief Product Officer, Netflix, Inc. | 1 | ● | ● | ● | ● (Entertainment/IT/Software) |
● | ||||||
| 9. William Morrow*1 | CEO, DIRECTV Entertainment Holdings LLC | 1 | ● | ● | ● | ● | ● (Telecommunication Service/Entertainment) |
● | ● | ||||
| 10. Shingo Konomoto*1 | Chairman, Member of the Board, Nomura Research Institute, Ltd. | Newly appointed | ● | ● | ● | ● (IT) |
● | ● | |||||
With a view toward securing effective oversight by the Board, the Nominating Committee reviews and selects candidates for the Board with the aim of ensuring that a substantial part of the Board is comprised of qualified outside Directors that satisfy the independence requirements established by Sony and by law. The Nominating Committee selects candidates that it views as well-suited to be Directors in light of the Board's purpose of enhancing Sony's corporate value. The Nominating Committee broadly considers various relevant factors, including a candidate's capabilities (such as work and other experience, achievements and expertise), availability, and independence, as well as diversity (including gender and internationality) in the boardroom, the appropriate size of the Board, and the knowledge, experience and talent the role requires. Under the Board Charter, Sony Group Corporation also requires that the Board consist of at least 8, but no more than 14, Directors. In addition, since 2005 the majority of the members of the Board have been outside Directors. As of July 31, 2024, the Chair and the Vice Chair of the Board and all members of the Audit Committee, the Nominating Committee and the Compensation Committee are outside Directors.
| Experience and Expertise, Etc. | Reason for Specification |
|---|---|
| CEO or Equivalent Position of Business Enterprise | As the Board is required to comprehensively oversee the management of the Sony Group, the Corporation believes that experience and knowledge in corporate leadership as a top executive are important, and therefore specified this criterion. |
| Global Business | As the Sony Group has developed all its businesses globally and has headquartered half of its six main business segments in the U.S., the Corporation believes that management experience and insight developed in companies with global operations are important, and therefore specified this criterion. |
| Diversity (Gender/Nationality) | As the Sony Group operates diverse businesses, the Corporation believes that it is important to appoint Directors with various backgrounds, including gender and nationality, to oversee the management from multiple perspectives, and therefore specified this criterion. |
| Engineering/IT/Technology | As the Corporation brands itself “A Creative Entertainment Company with a Solid Foundation of Technology,” the Corporation believes that experience and knowledge in technological research and development, as well as in the development of products and services using IT/digital technologies, are important, and therefore specified this criterion. |
| Sony Group Business Segment/ Relevant Industry | As the Board is required to evaluate the restructuring of the Corporation’s business portfolio, as well as supervise the Sony Group’s six main businesses segments, the Corporation believes that experience and knowledge related to its businesses or its relevant industries are important, and therefore specified this criterion. |
| Finance/Accounting | As the Board is required to supervise the Sony Group’s financial strategies and accounting practices effectively, the Corporation believes that experience and knowledge in finance and accounting are important, and therefore specified this criterion. |
| Risk Management/Government Relations | As the Board is required to oversee responses to major changes in the environment surrounding the Sony Group including geopolitical risks, information security, and the rise of new technologies such as AI, global environmental challenges and social division, the Corporation believes that experience and knowledge in risk evaluation and management, and experience and knowledge in government agencies/NGOs/specialized institutions are important, and therefore specified this criterion. |
Historically, Sony has consistently focused on effective group management by evolving its governance while diversifying its businesses, the regions it serves and its capital procurement methods. Sony therefore sees corporate governance as the basis for management that improves corporate value over the medium- to long-term as highly important, not simply as a response to legal requirements or social trends.
To realize Sony’s Purpose and achieve sustainable corporate growth, Sony continuously strives to operate the Sony Group effectively by maintaining objective, transparent and sound management and realizing timely and efficient decision-making. Sony clearly separates its management and oversight functions, and enhances the independence of the Board of Directors (“the Board”) and its functions as an oversight organization to ensure objective, transparent and sound management. In addition, Sony enables timely and efficient decision-making by largely delegating authority for conducting Sony’s business operations from the Board to the management team.
An outstanding governance system is becoming more important than ever for earning greater trust from stakeholders. Sony will therefore work to further enhance its governance system.
Sony emphasizes healthy tension between the Board and the management team to ensure highly effective governance, and accordingly, it clearly separates the oversight function of the Board and the management function of the management team.
The Board is responsible for oversight. While utilizing each Committee, the Board primarily reviews and approves Sony's basic management policies, confirms their progress, and encourages the management team to take corrective action as necessary, including through the exercise of its authority over personnel matters. At the same time, the management team is responsible for outcomes of business operations and assumes accountability to the Board. To ensure that these systems operate effectively, Sony believes that a majority of the Board should be comprised of independent outside Directors, including the Chair and the Vice Chair of the Board.
The Board has the authority to determine basic management policy, and ensures timely decision-making by largely delegating its authority for business operations to the management team.
Sony's governance is a continuously evolving managemen system. Sony has conducted evaluations of the effectiveness of the Board and each Committee ("Evaluation") annually since 2015. An outside counsel conducted the Evaluation in respect of the Board and Committee activities in the fiscal year ended March 31, 2024, and reported that the Board is established and operated in a manner sufficient to be highly appreciated, based on various points, including the self-evaluation results of the Directors and comparison with benchmarked companies in Japan and the United States. Following discussion and analysis based on the Evaluation, the Board affirmed that the Board and each Committee were functioning effectively.
Major efforts to improve effectiveness of Sony's Board of Directors and Committees for the fiscal year ended March 31, 2024 and operation policy and priority matters of Sony's Board of Directors and Committees for the fiscal year ending March 31, 2025 based on the result of the Evaluation are as follows. Sony will continuously take appropriate actions to further enhance functions of the Board and the Committees in response to the results of the Evaluation, as well as various comments and opinions given by Directors and the outside counsel during the Evaluation process.
Sony places priority on CEO succession to realize sustainable value creation throughout the Sony Group. In the CEO succession planning process, the Nominating Committee, composed entirely of independent outside Directors, vets potential successors based on the Sony CEO‘s qualifications. It does so in frequent consultation with executives, including the CEO, and reports its recommendations to the Board of Directors. In addition to CEO succession planning, the Nominating Committee assesses succession plans for Senior Executives with key management responsibilities for individual business units and headquarters functions, based on reports from management side, including the CEO.
CEO succession planning involves defining the qualifications that Sony seeks in CEOs able to manage its diverse businesses as a unified Group, screening both internal and external candidates, and comparing the two groups, so as to ensure the thoroughly objective evaluation of successor candidates. Sony looks for candidates both internally and externally on a yearround basis. The Nominating Committee narrows down the pool of candidates by vetting them in light of their potential to fulfill the CEO role, and then reviews both near-term and longer-term CEO successor candidates based on their anticipated timelines toward becoming CEO.
To foster trust with shareholders and investors as well as maximize corporate value, under the leadership of the CFO, Sony promotes constructive dialogue with shareholders and investors, primarily conducted by the SVP and the department in charge of investor relations.
In fiscal year 2023, Sony held individual interviews and group meetings conducted by the SVP and the department in charge of investor relations. Sony also held investor briefings such as the Corporate Strategy Meeting, the Business Segment Meeting, and the Sustainability Meeting, all conducted by the management team including the CEO, COO/CFO, and the heads of headquarter functions and each business segment, in addition to an image sensor manufacturing site tour. After such events, Sony conducted individual interviews and group meetings and had dialogues with a wide range of Japanese and non-Japanese institutional investors. There were also opportunities for individual dialogues between an outside Director and a company which provides advisory services to institutional investors.
In addition to an overview of financial results, the interests of investors at these dialogues included the business environment, competitive advantages and growth potential of the entertainment businesses, mainly the gaming business, and the image sensor business; progress in creating synergies among businesses within the group; business opportunities and risks resulting from generative AI; initiatives in new areas such as mobility; Sony's policy regarding the business portfolio and M&A, including the partial spin-off of the Financial Services business; a review of the fourth mid-range plan; the detail of the fifth mid-range plan; the policy regarding shareholder returns; and sustainability initiatives, including the environment. The department in charge of investor relations reports the interests and opinions of investors obtained through such dialogues as feedback to the Board and management team in a timely manner to enhance Sony's future dialogues, including by expanding disclosure.
In addition to dialogues with institutional investors, Sony held multiple briefings for individual investors conducted by the department in charge of investor relations in order to encourage active dialogue with individual investors.
Sony established the Sony Group Code of Conduct in 2003 an has been continuously working to foster an ethical corporate culture. Sony revised the Code of Conduct on April 1, 2024, reflecting the Sony Group's changed business portfolio as well as recent social and technology trends. The new Code of Conduct explains concisely and clearly what executives and employees should do in their day-to-day work in alignment with Sony's Purpose & Values. It also provides guidance on how to respond to emerging risks as society and Sony's business change. For example, a section was added entitled "Use Technology Responsibly." While it is important for Sony to use innovative technologies to expand creativity, such technologies sometimes bring related risks that must be properly managed. Sony has introduced individual policies and guidelines to address these issues, and now the new Code of Conduct states Sony's commitment to the responsible use of technology. Sony is updating its global Code of Conduct training programs to align with the new Code and is ensuring that the new Code of Conduct is distributed throughout the Group, through such training as well as via senior management messaging to further strengthen the Company's ethics and compliance program.
Trust in Sony by a wide range of stakeholders, including shareholders, investors, customers, business partners, society and employees, is essential for its sustainable growth. Sony will continue to build a foundation of trust that supports its value creation through responsible conduct by all Sony executives and employees in line with the principles of the Code.
Kaori Takezawa
Senior Vice President,
in charge of Legal,
Compliance and Privacy
Since our foundation, Sony has been focusing on fostering an ethical corporate culture and earning the trust of stakeholders. Amid the rapid evolution of technology and changes in geopolitical situations, in order to continue to "fill the world with emotion, through the power of creativity and technology," it is vital for us to act responsibly, with due consideration of increasingly complex laws and regulations in various countries and regions.
For example, we see national and regional laws and regulations relating to privacy and personal information being strengthened day by day in response to advances in technologies like AI. Sony is committed to protecting and handling personal information in an ethical manner, and has set policies to do so, as explicitly stated in the revised Code of Conduct.
Based on the principles set forth in our new Code of Conduct, Sony will continue to enhance our ethics and compliance programs and continue to pursue responsible behavior in line with changes in Sony's business environment and business portfolio, so that we can further gain our stakeholders' continued trust.
Sony's Compensation Committee sets the policy on the content of individual compensation for Directors, Senior Executives and other officers, and determines, or supervises the determination of, the amount and content of individual compensation of Directors and Senior Executives in accordance with the policy.
The basic policy for Director remuneration is to improve the supervisory function for business operations based on research regarding remuneration of Directors of other companies. Based on this policy, Director remuneration consists of (1) Fixed remuneration and (2) Stock-based compensation (restricted stocks or restricted stock units). Director remuneration does not include remuneration linked to business results on a short-term basis.
Senior Executives are key members of management responsible for executing operations of Sony or its businesses, and Senior Executive remuneration provides effective incentives to improve business results on a short-, medium-, and long-term basis in order to further improve corporate performance as a whole. The amount of each component and its percentage of total compensation are determined in accordance with the individual's level of responsibility, emphasizing linking the remuneration to business results and shareholder values*. Based on this policy, Senior Executive remuneration consists of (1) Fixed remuneration, (2) Remuneration linked to business results, (3) Stock-based compensation (Stock acquisition rights, and restricted stocks or restricted stock units), and (4) Phantom restricted stock plan. In order to ensure that remuneration linked to business results effectively incentivizes Senior Executives to achieve financial targets for the medium- to long-term and financial targets for the fiscal year for which compensation will be paid, the amount of such remuneration shall be determined based on the level of achievement of the two metrics below and can fluctuate, in principle, from 0% to 200% of the standard payment amount in FY2024.
Group Sustainability is an evaluation of efforts by executives to enhance the medium- to long-term corporate value and sustainable growth of the Sony Group as a whole, not being limited to their respective businesses and organizations, including management succession and investment in human capital, sustainability initiatives related to social value creation and ESG, value creation through collaborations among businesses of Sony, and engagement indicators based on employee surveys. Stock acquisition rights, and restricted stocks or restricted
stock units are granted as stock-based compensation to increase the willingness of executives/employees to contribute to the enhancement of Sony's corporate value, and thereby to increase business results of Sony.
To strengthen governance, Sony has adopted a clawback policy, with an effective date of October 2, 2023, in compliance with the new rules adopted by the Securities and Exchange Commission in October 2022.
The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation received by any Executive Officer during the three-fiscal-year period prior to the date Sony Group Corporation is required to prepare an Accounting Restatement, in accordance with the above rules. The amount of erroneously awarded incentive compensation that the Executive Officer(s) would be required to repay is the amount of incentive-based compensation paid to the Executive Officer(s) that exceeds the amount the Executive Officer(s) would have received had it been determined based on the restated amounts, computed without regard to any taxes paid. The recovery of such compensation applies regardless of whether an Executive Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement.
Integrated report covering financial and non-financial information, such as business strategy and management policies for medium- to long-term value creation
A business overview, with financial and non-financial information, particularly relevant to investors and shareholders
Meetings for Investors
Financial Reports
Corporate Governance and Internal Controls
Covers non-financial information, such as activities related to sustainability and CSR, relevant to a wide range of stakeholders
FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Sony Group Corporation has been independently assessed according to the criteria of the FTSE4Good and FTSE Blossom Index Series and has satisfied the requirements to become a constituent of those index series. Created by the global index provider FTSE Russell, those index series are designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices and used by a wide variety of market participants to create and assess responsible investment funds and other products.
THE INCLUSION OF SONY GROUP CORPORATION IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF SONY GROUP CORPORATION BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
Statements made in this report with respect to Sony's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forwardlooking statements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "aim," "intend," "seek," "may," "might," "could" or "should," and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management's assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Sony adopted International Financial Reporting Standards (IFRS) starting in the three-month period ended June 30, 2021, in lieu of the previously applied generally accepted accounting principles in the United States (U.S. GAAP). The results for the fiscal year ended March 31, 2021 are also presented in accordance with IFRS. Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:
Risks and uncertainties also include the impact of any future events with material adverse impact. The continued impact of developments relating to the situation in Ukraine and Russia and in the Middle East could heighten many of the risks and uncertainties noted above. Important information regarding risks and uncertainties is also set forth in Sony's most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.
Financial information excluding Financial Services presented in this report is not in accordance with International Financial Reporting Standards (IFRS), which is used by Sony to prepare its consolidated financial statements. However, because the Financial Services segment is different in nature from Sony's other segments, Sony utilizes this information to analyze its results excluding the Financial Services segment and believes that a comparative presentation may be useful in understanding and analyzing Sony's consolidated financial statements.
Sony's Corporate Report 2024 is an integrated report that covers the worldwide business activities of Sony Group on a consolidated basis. The report's purpose is to comprehensively communicate financial information, including business results, policies for medium- to long-term value creation and business strategies, and non-financial information to Sony's stakeholders.
Integrated Reporting, International Integrated Reporting Council Guidance for Collaborative Value Creation, Ministry of Economy,
Trade and Industry, Government of Japan
Environmental Reporting Guidelines 2018, Ministry of the Environment, Government of Japan GRI Standards, Global Reporting Initiative
Sony Group Corporation
1-7-1 Konan, Minato-ku, Tokyo 108-0075, Japan
Tel.: +81 (0)3-6748-2111
