索尼 (SONY) 2017 Q2 法說會逐字稿

Ladies and gentlemen, it's time to start the earnings announcement session for Sony Corporation for the second quarter of fiscal year 2017, and thank you very much for attending this session despite your very busy schedules.

And I'd like to introduce our speakers: first of all, Executive Deputy President and CFO, Kenichiro Yoshida; Corporate Executive in charge of Corporate Planning and Control and Accounting, Kazuhiko Takeda; Senior General Manager, Corporate Communications and CSR -- sorry, Finance and Corporate Development Corporate Executive, Atsuko Murakami.

Mr. Yoshida will make the presentation and -- to be followed by questions-and-answers, and we'll spend a total of 45 minutes for the presentation and questions and answers.

Thank you.

I'm CFO, Kenichiro Yoshida.

Today, I would like to explain 2 topics in the next 15 minutes.

Consolidated sales in the second quarter of fiscal '17 increased 22% year-on-year to JPY 2,062,500,000,000.

Consolidated operating income was JPY 204.2 billion, approximately 4.4x the same quarter of the previous fiscal year.

Net income attributable to Sony Corporation stockholders was JPY 130.9 billion.

As is shown in this slide, operating income in the same quarter of the previous fiscal year included certain onetime items.

Excluding those onetime items, operating income would have increased JPY 115.6 billion.

This chart shows the cumulative results for the first half of the fiscal year.

Excluding onetime items, operating income would have increased JPY 127 billion, or 64%.

This chart shows the results by segment for the second quarter.

The significant improvement in the All Other segment was due to the recording of a JPY 32.8 billion impairment related to the transfer of the battery business in the same quarter over the previous fiscal year.

And this slide shows the results by the segment for the first half of the fiscal year.

Next is the consolidated results forecast for fiscal '17.

We have upwardly revised our consolidated sales forecast by JPY 200 billion from the August forecast to JPY 8,500,000,000,000, primarily due to the impact of ForEx.

We have upwardly revised our operating income forecast by JPY 130 billion to JPY 630 billion, and we have also upwardly revised our forecast for net income to JPY 380 billion.

We have revised our foreign exchange rate assumption rate to JPY 112 to the U.S. dollars and JPY 130 to the euro.

We expect to issue a 2 -- JPY 12.5 year-end dividend, which combined with the interim dividend we have officially approved, will make our expected annual dividend JPY 25 per share.

And this fiscal year results forecast for each segment are shown in this slide.

As you can see, we have upwardly revised our operating income forecasts by -- in the Semiconductors, Music, Home Entertainment & Sound segments.

The year-on-year positive impact on the annual operating results of our foreign exchange rate assumptions, combined with the impact of foreign exchange rates already recorded in the result of the first half of the fiscal year, is expected to approximate -- to be approximately JPY 55 billion in the 5 Electronic segment in total.

Moreover, we have incorporated a loss of JPY 50 billion in Corporate and elimination as contingency for business risks.

I will now turn to the situation in each of our businesses.

I will first talk about the Mobile Communications segment.

During the second quarter, sales increased 2% year-on-year primarily due to the impact of foreign exchange rates despite decrease in smartphone unit sales.

Operating result deteriorated JPY 6.2 billion, and a JPY 2.5 billion operating loss was recorded.

This deterioration was primarily due to a change in the geographic mix of smartphone sales and an increase in the price of key components, primarily offset by reductions in operating costs.

We recorded JPY 1.2 billion in operating income for the first half of the fiscal year.

For fiscal '17, we have decreased our annual smartphone unit sales forecast by 1 million units compared with August forecast to 15.5 million units.

As a result, we have reduced our sales forecast by JPY 40 billion to JPY 780 billion.

We have maintained our JPY 5 billion forecast for operating income, because we expect to offset the negative impact of the sales decrease and the increase in the key income price component primarily by reducing operating costs.

Next about Network Services segment.

Sales for the quarter increased 35% year-on-year, primarily due to an increase in PS4 software sales, and impact of foreign exchange rates, and an increase in PS4 hardware sales.

Operating income increased JPY 35.8 billion from last year to JPY 54.8 billion primarily due to the increase in sales.

As I will explain later, operating income for the quarter includes the positive impact of an adjustment of the accounting for internal royalties between subsidiaries in the segment.

We upwardly revised our PS4 unit sales forecast compared with the August forecast by 1 million units to now 19 million units.

As a result, our sales forecast has been upwardly revised to JPY 2 trillion.

However, because we expect to strengthen sales promotion activities for the holiday sale season, we have not changed our operating income forecast.

On October 3, we announced that for Sony Interactive Entertainment, John Kodera has been appointed President and CEO.

SIE, which operates the business in this segment, and Kodera has led the Network Services business for many years and has been leading the overall product and business strategy of SIE as Deputy President since April of 2016.

Now I would like to explain about the adjustment of the accounting method for internal royalties, which I mentioned before.

And as is shown here, overseas subsidiaries in this segment pay an internal royalty to the Japanese subsidiary, which is primarily responsible for developing the game console platform.

And we discovered that, when accounting for the payment and receipt of this internal royalty within the segment, there was a discrepancy in the timing when the royalty was recognized at the subsidiaries, as is shown on the right side on this slide.

Consequently, we have changed the accounting process, so that the timing is now consistent.

And this chart shows what quarterly operating income would have been if the recognition timing has been consistent since the beginning of the fiscal year ended March 31 of 2017.

And there's no impact on sales, including on a quarterly basis, nor on annual operating income for the fiscal year ended March 31, 2017.

Next I will explain the Imaging Products & Solutions segment.

The second quarter sales increased 16% year-on-year, and operating income grew to 4 -- grew by JPY 4 billion to JPY 18.9 billion.

This increase in sales and operating income was mainly due to the impact of foreign exchange rates and the absence in the current quarter of the impact from the Kumamoto Earthquake in the same quarter of the previous year, but the -- there's no change in our forecast for the full year.

And I would like to say a few words about the medical business.

Though our collaboration with Olympus -- through the collaboration with Olympus, the 2 products shown on this slide have been launched and development of technology and products is progressing smoothly.

On the other hand, we recognize that it will take a significant amount of time before the medical devices business achieves the desired results since the medical device industry has constraints that are quite different from our legacy electronics business.

In 2012, we announced that we were aiming to achieve JPY 200 billion of sales from the medical business in the fiscal year ending March 31, 2021.

However, at this point in time, we think that achieving that amount will be difficult, and we are reassessing the target in conjunction with our discussions of the next mid-range plan.

And there's no change to our commitment to the medical business over the long term.

Next about Home Entertainment & Sound segment.

In the second quarter, sales increased 28% year-on-year, and operating income increased JPY 6.8 billion to JPY 24.4 billion.

This increase in sales and operating income was primarily due to an improvement in product mix, reflecting the shift to high value-added models, mainly 4K televisions, and the positive impact of the exchange rates.

As for the fiscal year forecast, we increased our unit sales forecast for televisions by 500,000 units, and upwardly revised the sales forecast by JPY 30 billion to JPY 1,200,000,000,000.

We have also upwardly revised our operating income forecast for the fiscal year by JPY 18 billion to JPY 76 billion, mainly due to decline in the price of television panels, which is a key component, and the increase in unit sales.

Next I will talk about the Semiconductor segment.

In the second quarter, sales increased 18% year-on-year, and operating results improved JPY 53.6 billion to JPY 49.4 billion.

The increase in sales was mainly due to an increase in unit sales of image sensors for mobile products.

If we exclude onetime items, operating income would have increased JPY 47.3 billion.

We have upwardly revised our sales forecast by JPY 20 billion due to an increase in our forecast for unit sales for image sensors for mobile products compared with the August forecast for full year.

Primarily due to this increase in sales, we have upwardly revised our forecast for operating income by JPY 20 billion to JPY 150 billion.

Last week, on October 23, we announced the commercialization of an image sensor for front facing cameras used in Advanced Driver Assistance Systems or ADAS.

This sensor is expected to be capable of being connected to the EyeQ4 and EyeQ5 processors being developed by Mobileye.

Next I will talk about the Pictures segment.

Sales increased 27% year-on-year, and operating income increased JPY 4.5 billion to JPY 7.7 billion.

The increase in both sales and operating income was primarily due to the strong worldwide theatrical performance of Spider-Man: Homecoming in Motion Pictures.

There's no change to our forecast for the fiscal year.

We have already decided to make the 4 movies shown here, which are all related to Spider-Man.

Going forward, we will work to expand the franchise of our Spider-Man-related IP.

In addition, we announced the appointment of Mike Hopkins as the Chairman of Sony Pictures Television.

Mike will have responsibility for both the Television Productions and Media Network businesses.

His career has spanned both businesses, and he has knowledge and experience in the OTT space as well, recently serving as the CEO of Hulu.

Next I will talk about the Music segment.

Second quarter sales increased 38% year-on-year, and operating income increased JPY 16 billion to JPY 32.5 billion.

The mobile game application Fate/Grand Order continued to make a significant contribution to financial performance.

In addition, sales of recorded Music and Music Publishing increased year-on-year due to an increase in streaming revenue.

We have upwardly revised our forecast for the operating income of this segment by JPY 19 billion to JPY 94 billion for the full year to reflect the strong performance in the first half.

In addition, Aniplex, which operates the mobile game application business, started to distribute a new title in August called Magia Record.

Finally, I will explain the Financial Services segment.

Second quarter sales increased 7% year-on-year, and operating income increased JPY 3 billion to JPY 36.6 billion.

This increase in operating income is primarily due to a decline in the loss ratio for automobile insurance at Sony Assurance and increase in insurance premiums at Sony Life.

There's no change to the forecast for the fiscal year.

That is the end of my explanation.

Now the floor is open to your questions.

Those of you with questions, please wait for the microphone and please identify yourself by stating your name and affiliation before asking the questions.

When the questions are asked in English, there will be consecutive interpretation into Japanese and answers will be given in Japanese.

Please confine the number of questions per person to 2. Now any questions, please?

Sugiyama of Goldman Sachs.

Two questions, if I may.

First, concerning the Music segment.

When we look at the segment breakdown, no change in fiscal in download Q-over-Q, but the streaming grew very much over the previous quarter.

Is it because of the change in payment schemes or any onetime items?

What are the reason behind this growth of streaming?

And the second point, again, on Music.

About the business strategy of Aniplex, please give us your comment.

And [anime] recording is released, and there will be another 2 titles.

But what is the production capacity of Aniplex for the mobile game application, and what's your policy going forward?

The first question concerning the Music business and the second question concerns the Aniplex of the Music segment.

So I will answer the question first and then supplement it by Takeda.

The breakdown, streaming.

Indeed, streaming has grown substantially.

Basically, it is a matter of market trend.

Of course, we are reviewing the rates and charges, but rather -- more so than that, as a major trend there has been a major growth of the streaming market.

And about the Aniplex, as you have pointed out, going forward, we have a plan of continuing with such, and to maximize the value of animation IP and the Fate/Grand Order.

Before the great success of Fate/Grand Order, there were many animation IP distribution and -- like 16 titles, and various trials were made.

And for each one, it would incur some costs, but not as costly as a console, a game software IP.

And so in order to maximize the animation IP value, we would like to continue with this kind of policy.

Again, concerning streaming.

Outside the Japan, centered on the U.S. market, there has been major increase, and along with the Fate/Grand Order, streaming is another profit drivers.

Next question please.

Okazaki, Nomura Securities.

On Semiconductors and Television, I have questions.

First of all, image sensor unit sales forecast has been revised up.

What's the background situation for this?

And also production capacity has been increased so far.

So can you give us an update on the current status?

And on TV business, again, the forecast for the unit sales is being revised upward, and toward the unit sale season, well, the competitive landscape, the panel costs are down, so that operating income, thankfully, is higher, but the same situation applies to other competitive players.

Is there another risk of price cuts by the competitors?

So thank you.

The first question is semiconductors, and another one on TV.

The first question will be answered by myself, and second one, addressed by Mr. Takeda.

First of all, on the first question, in the previous meeting, when we were preparing for the forecast in August, the product mix was changed by Asian players.

So we reviewed our product mix very carefully, but the sales are not as down as we had expected at that time, when we were cautious.

And also the improvement in the model mix has contributed to the improvement in profitability also on the capacity side.

The master production, we've increased monthly capacity from up to 88,000 slices every month.

Going forward, we plan to increase our capacity further up to 100,000 slices.

And for the second quarter, on average, we produced 85,000 in the third quarter, 88k on a monthly basis.

And your question that was on TV will be answered by Takeda.

You're correct.

The reduction in panel cost is a situation that applies to all the competitors.

And given that situation, our profit forecast for the second half, we take the -- a cautious view.

We're not going to follow volume, but we'll make sure that we are profitable.

That policy remains unchanged.

And so a shift in favor of premium models, that has been continuing since last year, 4Ks and the larger screens, larger than the 55-inch.

In that case, the proportion of 4K in our business is higher than the market.

So our policy of not pursuing volume for volume's sake has been maintained, and we are very cautious about the price -- the setting of the price.

Next question please.

From Merrill Lynch, my name is Hirakawa.

I have a question about Network and Mobile Communications.

One question for each -- games, actually.

Games Network.

Because I came late, maybe I missed some of the discussions.

PS Plus subscriptions members -- the number of members, how many are they?

And the price increase has taken effect at this moment.

When it subsides, what would happen to the margin?

And then after that, how much contribution the margin would contribute to the network?

And next question, Mobile Communication business.

On the IR day, the building up of the recurring businesses, that's the main theme.

But for ROIC, R-O-I-C, it remains low.

So going forward, are you going to use ROIC as a metric?

Or do you have any idea of using a different metric for next fiscal year onwards?

That's my second question.

Thank you.

Your first question, allow me to answer, followed by Ms. Murakami.

For the second question, I will start answering first.

As you rightly said, the ROIC remains low for mobile, and then this business, as Hirai says, last inch hardware -- last 1-inch hardware and the state-of-the-art technologies are concentrating this mobile business, so we will do our best.

But of course we need to have the returns, and we need to make the products more attractive, and then the fixed cost has come down.

Therefore, the major point going forward would be utilizing our image sensor capabilities to increase the attractiveness and appeal of the products.

We haven't achieved the full results yet, but we will take a long-term view to strengthen in this area.

For games, PS Plus numbers, Murakami -- Ms. Murakami, would you like to answer?

At the end of the fiscal 2016, 26.4 million was the announcement, and the participation rate on a worldwide basis, PS4 users -- 40% of the PS4 users are the members of PS Plus, and going forward, inclusive of the light user's, PS4 spreads more rightly into the base.

And then this participation beta is going to slow down a bit, and the existing members -- for existing members, we would like to make our services more attractive, so that the retention rate remains high.

That's going to be more important.

PS Plus -- there's the contract of 1 month, 3 months or 1 year.

It is not easy to retain them for a long time, but we will implement -- where we have been implementing measures to retain them.

Next question?

Nakane of Mizuho.

Two questions.

First point, about Music, and also, the JPY 50 billion risk buffers.

About the upward revision of Music segment, it reflects the first half results, but you have not review the second half.

Is it the case?

And also, streaming and image media, what -- which made a greater contribution to upward revision?

And you talked about risk buffer of JPY 50 billion.

What's the contents of it?

And the second question, about the cash flow on Page 23, and the JPY 70 billion of the operating cash flow, but by segment, if you could tell us, to the extent it's possible.

And in addition to increasing profit and reducing investment, what are these major points for improving the cash flow?

About the Music segment, where, in a nutshell, the -- in terms of the contribution to the beta results, the games' contribution is larger, and about the contents of the risk buffers and the cash flow, the -- for the first -- the former part, Takeda, and the latter part, Murakami will respond.

First, about the risk buffers.

The way of approaching the risk buffer, we look at the results of each business of the second quarter, and based on the outlook of the second half.

And at the time of August, the forecast, we had JPY 110 billion risk buffers.

But we view risk and opportunity for each business, and came up with the number of JPY 50 billion.

It's not that any of the risks have surfaced, but the third quarter is the biggest sales season for us, and so we cannot be too optimistic about what may happen.

And also, the market environment changed, such as the cost of the key components and the competitive landscape and the exchange rate fluctuation and the risk of business condition slowing down.

So in the past, we were affected by the change in the business environment, and so we remain cautious about this.

At this point in time, we do not foresee any major restructuring.

Let me talk about the cash flow.

By segment, you talked about -- so let me talk about the cash flow by segment, and with the growth of the profit, semiconductors and gaming are the 2 services.

And Music, there has been no growth.

And a negative growth was Mobile and HE&S.

With this increasing sales, there was increase for the operating capital demand.

So the cash flow -- in terms of cash flow is negative, but it is the ordinary cycle.

And if I may talk about the overall picture of the cash flow and the second quarter cash flow of 2017, and 6 months cash flow and the cash flow at the bottom -- or the bottom on Page 22.

The cash flow for the current fiscal year compared to the previous year shows a major improvement.

For instance, net debt balance outstanding and for the current fiscal year, from negative JPY 22.4 billion to negative JPY 69.1 billion.

On the small amount and the onetime items, cash flow from profit is about JPY 100 billion, but the operating capital improved by JPY 38 billion.

And account receivables and inventory have increased as usual, but account payable has increased in Game and Network Services.

So the result was improvement.

And Pictures -- for the deferred Picture expense, increased amount, then decline.

Compared to previous year, the Picture result is better.

So the improvement of JPY 25 billion.

And therefore the current fiscal year compared to the previous year we've seen the rapid improvement of the results.

And so there was an unpaid corporate tax of JPY 40 billion.

And also, the unreceived -- the insurance is JPY 20 billion of equity, that were the earthquake.

So this is about picture of cash flow.

And you asked where would be the possibility of improvement?

About the profit, we can foresee the improvement, but other than that, in Game, with increasing Network Services, the direct payment by customers would come through us.

Compared to the business model through dealers, we have a higher efficiency of the cash flow operation, and that is another example of the improvement in cash flow not seen in this chart.

And the investment cash flow for the current fiscal year, for the full year, we will see the same amount of investment cash flow, but compared to the previous year, on the first half comparison basis, the results appears to be better this year because, mainly in the Semiconductor segment, there has been a lag in payment of CapEx to the tune of JPY 86 billion.

And also, the transfer of our equity portion of HES, and that is the positive of JPY 20 billion in terms of cash flow.

Because of such onetime items, when we compare the first half year-on-year, that will not directly reflect that decision during the second half.

But during the first half, with the increasing profit.

And also -- partially it may be offset by the increased demand for the operating capital, but the outcome will be better than that of last year and the investment would be about the same as last year.

Next question please?

Katsura, SMBC Nikko.

I would like to ask 2 questions.

Continuing with the cash flow question, and also one related to Semiconductors.

You're increasing your dividend according to your announcement.

Going forward, you're positive in cash flow, and you have a portion of allocation of cash flow.

I don't think you have any policy to announce, but you can give us a clue about the cash flow management and dividend.

If any information can be shared with us, we'll appreciate.

And the second point is about semiconductors.

I think, if my memory is correct, operating margin, over 20% is sort of a passing remark.

You wanted to exceed that.

Unless you are there, you will think about further growth of the company through investment.

But in the current situation, such that you are in full operation, so what's your thinking -- thoughts about the growth of this particular segment and the investment required for semiconductors.

The third quarter will be full operation at 88k slices, I think, but let's talk -- please talk about the inventory and also future demand.

What's your [cost FX] going forward about the rate of operations, their capacity, going forward?

Thank you.

And your first question about the -- our thoughts on the cash flow management, and how they will be distributed.

On a normalized basis, cash flow is linked to profits, so at the corporate strategy meeting, as Mr. Hirai said, unless we reach a certain level of profitability, then the key thing is to maintain, because in the past, we reached certain point always, only to see reduction in the profitability afterwards.

But we would like to maintain that high level.

And in terms of the return to the shareholders, over the long term, yes, we are to increase our dividend.

The JPY 25, which we're paying this year, is not a cap on our dividend policy.

But one point to consider is the investment opportunity and also financial strength of the company.

Stabilizing the financial structure of the company is important, related to the investment opportunity.

One idea that we discussed between myself and the Murakami-san is that the commercial paper issuance in the United States to raise fund.

Once we are able to raise such funds in a -- on a stable and an agile basis, then we will think about investments.

But to increase the rating of the company, we have to have a strong capital base and a financial structure of the company.

So we are to increase the capital -- equity capital, excluding the financial services.

And also to do investments for growth, we have to have a strong financial basis.

And your second question concerning Semiconductors, our view on future investment.

For this year, we see the level of operations and the capacity.

So for this year, I don't think there's high risk with these numbers, but it depends on the customers' trend.

There could be some change for the next year.

And I talked about automotive application.

The automotive application will come later, not sooner.

So if drones and also the monitoring users, some of the applications, but smartphone is by far the biggest user.

So audio than automotive applications, and the car sensing.

Also dual cameras and higher pixels for the cameras, and also the fact has increasing the demand for the AR and also certification purposes.

These are other types of application, basically for the sensing purpose in that area.

The question is whether it can really provide added value with our technology, and depending on the success there, we'll have to revisit our policy on production, or production capacity, contemplating these different options depending on those factors.

Next question please.

From Daiwa Securities, my name is Ayada.

I have a question about semiconductor and games, one each.

In a more abstract way maybe, but first, let me ask you about the Semiconductor business.

This fiscal year, as has been mentioned earlier, the profit margin is going to be increased, and at the IR, you explained to us what kind of measures you are going to take.

What was the achievement?

I would imagine that there will be more than 20% improvements in the margin.

So among various business opportunities, is there any further room for improving the margin?

Or do you have such will to do that?

That's my first question.

Second question, about games.

In the second quarter, in terms of yen, network sales has increased by 50% or so.

Most likely, this trend is likely to continue in the third and the fourth quarter.

And the third and the fourth quarter, do you think there's a high probability of increasing the profit, so earnings?

From next year onwards, what kind of risks or metrics you have to be aware of for next years onward?

And there was some cautious view for the businesses for next year -- fiscal year onward.

Would you elaborate more?

Thank you.

First, your question about semiconductor.

Margin, is there any room for improvement of the margin?

Oh well, we have both, yes.

There is room to improve, and we have a will to do it.

If we look back on the 3 years’ time frame, applications for mobile product, sensing, dual lens and front facing cameras or multiple lenses for front facing cameras, those are the possibilities.

How can we secure the manufacturing capacity is one point we have to be mindful of, and also how to secure the human resources, that's a challenge as well.

In any case, in the past, certain risks emerged.

So it used to be high risk on the high return, and this is the area of high risk, high return.

We have to be mindful of the risks when we try to pursue the return -- higher return.

For games, as I said earlier, PlayStation is a console.

That's the main thing, a foundation.

With the cycle of the console, the performance, business results, may vary along the axis of the console.

JPY 2 trillion is the sales for this fiscal year, and more than half, most likely, will be coming from network.

And for this fiscal year, the unit sales is approaching the level of last year.

There -- because there are mitigating factors to mitigate the console cycles so far, I may be repeating for myself, but for one thing, business model used to be B2B royalty model, but now, it has shift to a direct-to-consumer model.

And business main access, hardware is important, but rather than hardware, the number of users is getting more important, monthly average users, PS Plus subscribers numbers.

And also, how much time are they putting in using this console that's ARPU?

So the axis seems to be shifting from hardware to user base.

Thirdly, there's a change of revenue cycle.

Clearly, in game sales, for example, after the customers purchase that disc or after they download the software, then they can purchase items or upgrades, so the in game sales proportion is increasing.

With all these, the console cycle is being mitigated by these factors.

In view of the limited time, this is going to be the last question.

Ono of Morgan Stanley.

Two questions.

First, not directly related to the earnings announcement, but in the entertainment area or the game, the -- Mr. Andy House is leaving, and in the Pictures, they talk about of TV business changed.

Over a short period of time, there have been such changes.

Now looking ahead, half a year or 1 year, are there any action points we should be taking in the organization?

You mentioned that Mr. Kodera will be heading the TV and for -- over the game and for TV, the new CEO has been appointed.

Do you think there will be a smooth transfer in the operation of the organization?

Or will there be something new in managing with the change -- the management or the leadership?

The second question, as Mr. Yoshida mentioned earlier, in the segment of Game, you talked about in-game sales, for instance, Activision or other overseas third party companies, generate a very high profitability in game.

So for Sony, as business opportunities when you adopt the third party contents for in-game sales, do you have any plans or ideas at the moment?

First, about the management change.

There has been changes, but that happened based on the individual decision.

But what's important here is that in the area of Game, there would be further expansion of network business, because Kodera was the one who launched the network businesses and under his leadership, we can strengthen the direction of increasing the recurring business, and that's an important aspect.

And in the Pictures business, this time Mike Hopkins is heading the TV business, which remained vacant for some time.

So we will be strengthening the management structure of TV sector.

[Antony Vesquira] established that very expeditiously.

Concerning the in-game trend of our game business, it is significant for us as well.

And for the third party, the increase in their sales would mean very significant for us also.

And for the first party, in our case, compared to other companies, the in-game proportion is still relatively low.

But under the leadership of Kodera, there will be an appropriate exploration and decision taken in the future.

Thank you very much.

This concludes our earnings announcement session.

Thank you for your attendance.