[Key Information](index=6&type=section&id=Item%203.%20Key%20Information) This section provides an overview of Sony's key risk factors across various business and operational domains [Risk Factors](index=6&type=section&id=D.%20Risk%20Factors) Sony faces a multitude of risks across its diverse business segments, including intense competition, strategic execution, operational vulnerabilities, financial market exposures, and cybersecurity threats [Competition and Market Risks](index=6&type=section&id=Competition%20and%20Market%20Risks) Sony operates in highly competitive markets across all its segments, facing rivals with potentially greater resources, and must counter price erosion and maintain technological edge - Sony competes with a wide range of companies, from large multinationals to specialized entities, across its diverse business segments. Key competitive factors include price and function in electronics, and the ability to secure talent and content in the Music and Pictures segments[18](index=18&type=chunk)[19](index=19&type=chunk) - The company faces intense pricing pressure from competitors, retailer consolidation, and shorter product cycles. In the Pictures segment, a crowded theatrical release schedule following the 2023 Hollywood strikes could increase competition and affect operating results[19](index=19&type=chunk) - Even in areas of strong competitive advantage like image sensors, there is a risk that competitors' technological advancements could erode Sony's market position[19](index=19&type=chunk)[21](index=21&type=chunk) [Strategic and R&D Risks](index=7&type=section&id=Strategic%20and%20R%26D%20Risks) Sony's success depends on continuous R&D investment and effective management of strategic initiatives, including acquisitions and spin-offs, which carry significant execution risks - Sony must continually invest in R&D to remain competitive, particularly in the G&NS and I&SS segments. Failure to identify growth trends or commercialize innovations could adversely impact its market position[22](index=22&type=chunk)[23](index=23&type=chunk) - Strategic acquisitions (e.g., Bungie), joint ventures (e.g., with Honda), and investments (e.g., Epic Games) are key to growth but come with risks such as integration failure, loss of key personnel, and not achieving expected synergies[25](index=25&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - Sony is preparing for a partial spin-off and listing of its Financial Services business (SFGI) in October 2025. The execution is subject to regulatory approvals and there is no guarantee of tax-free treatment in all countries[31](index=31&type=chunk) - The company has made significant capital expenditures, primarily to increase image sensor production capacity, totaling **339.6 billion yen** in FY2023. Recovery of these investments is subject to market demand and competition[30](index=30&type=chunk) [Operational and Supply Chain Risks](index=8&type=section&id=Operational%20and%20Supply%20Chain%20Risks) Sony's operations are vulnerable to supply chain disruptions, inaccurate demand forecasting, and catastrophic events, particularly given its reliance on third-party suppliers and key manufacturing facilities in Japan - Sony depends on third-party suppliers for key components such as semiconductors and LCD panels. Supply shortages, price fluctuations, or quality issues from these partners can adversely affect operating results[40](index=40&type=chunk) - Inaccurate consumer demand forecasting can lead to inventory shortages or excess, resulting in lost sales or write-downs. Sony wrote down inventory for a specific Chinese customer in FY2020 due to U.S. export restrictions[37](index=37&type=chunk)[41](index=41&type=chunk) - Catastrophic events pose a significant risk. A major earthquake in Japan could damage key facilities, such as those for image sensor manufacturing. The 2016 Kumamoto earthquake interrupted production at a Kyushu site[65](index=65&type=chunk) - A resurgence of pandemics like COVID-19 could again disrupt supply chains, factory operations, and consumer demand across all segments, from hardware production in G&NS to theatrical revenues in Pictures[66](index=66&type=chunk) [Financial and Economic Risks](index=10&type=section&id=Financial%20and%20Economic%20Risks) Sony is exposed to global economic conditions, foreign exchange fluctuations, credit rating impacts, and financial market volatility, particularly affecting its Financial Services segment - Sony's sales are sensitive to economic conditions in its major markets, which accounted for **23.3%** (Japan), **28.8%** (U.S.), and **20.2%** (Europe) of total revenue in FY2023[42](index=42&type=chunk) - Foreign exchange fluctuations pose a significant risk. A strengthening yen against the euro negatively impacts results, while a weakening yen against the U.S. dollar can also have adverse effects due to cost structures. Sony uses hedging to mitigate some short-term risk[45](index=45&type=chunk)[46](index=46&type=chunk) - The Financial Services segment is subject to comprehensive regulation and its results are affected by changes in interest rates, foreign exchange rates, and the value of its investment portfolio, which includes Japanese government bonds and U.S. treasury bonds[61](index=61&type=chunk)[62](index=62&type=chunk) [Legal, Regulatory, and Geopolitical Risks](index=9&type=section&id=Legal%2C%20Regulatory%2C%20and%20Geopolitical%20Risks) Sony is subject to extensive global laws and regulations, geopolitical instability, and litigation risks, which can increase costs and disrupt business operations - Sony is subject to numerous global laws and regulations concerning trade, antitrust, data privacy, AI, and environmental standards. Changes in these regulations can increase compliance costs and impact business practices[36](index=36&type=chunk) - Geopolitical instability, such as the situations in Ukraine and Russia, can disrupt business operations. Sony has suspended its business in Russia in response to the conflict[43](index=43&type=chunk) - U.S. export restrictions announced in August 2020 led Sony to suspend image sensor shipments to a specific Chinese customer, impacting sales, although some shipments later resumed under a license[37](index=37&type=chunk) - Foreign investors seeking to acquire **1%** or more of Sony's shares are subject to prior notification requirements under Japan's Foreign Exchange and Foreign Trade Act (FEFTA) due to Sony's engagement in designated business sectors[88](index=88&type=chunk)[89](index=89&type=chunk) [Cybersecurity and Technology Risks](index=12&type=section&id=Cybersecurity%20and%20Technology%20Risks) Sony faces significant cybersecurity threats and challenges from evolving digital technologies and new distribution platforms, which could lead to data loss, business disruption, and reputational harm - Sony is a target for sophisticated cyber-attacks. A breach of its information security could result in significant remediation costs, lost revenues, and reputational damage[69](index=69&type=chunk)[70](index=70&type=chunk) - The increasing sophistication of internet-connected products exposes Sony to risks of misappropriated customer information or impaired product functionality. There is no guarantee that security measures can prevent all compromises[74](index=74&type=chunk) - In the Music and Pictures segments, the growth of digital streaming and the trend of distributors creating their own content (potentially using generative AI) could reduce demand for Sony's content and negatively affect pricing[57](index=57&type=chunk)[59](index=59&type=chunk) [Human Capital and Intellectual Property Risks](index=11&type=section&id=Human%20Capital%20and%20Intellectual%20Property%20Risks) Sony's success relies on attracting and retaining key talent, protecting its intellectual property from theft, and managing labor disputes and third-party licensing requirements - Attracting and retaining key personnel, including creative talent and engineers, is crucial. Work stoppages, like the 2023 WGA and SAG-AFTRA strikes, have previously led to production delays and changes to theatrical release schedules[51](index=51&type=chunk) - Protecting intellectual property from unauthorized duplication and digital theft is a major challenge, especially for copyrighted content in the digital era. Sony incurs significant expenses to protect its IP rights[53](index=53&type=chunk) - Many products, such as those with Blu-ray Disc™ functionality, rely on licenses for third-party patents. The inability to renew or obtain necessary licenses could force redesigns or discontinuation of products[54](index=54&type=chunk)[165](index=165&type=chunk) [Information on the Company](index=18&type=section&id=Item%204.%20Information%20on%20the%20Company) This section details Sony's corporate history, business segments, global operations, sustainability initiatives, organizational structure, and key assets [History and Development of the Company](index=18&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Sony, founded in 1946, has evolved into a global conglomerate through strategic acquisitions, product launches, and recent ventures, including the planned spin-off of its Financial Services business - Established in May 1946, the company changed its name to Sony Group Corporation in April 2021 to reflect its role as the headquarters of the Sony Group[92](index=92&type=chunk) - Key strategic acquisitions include CBS Records Inc. in 1988 (now Sony Music Entertainment) and Columbia Pictures Entertainment, Inc. in 1989 (now Sony Pictures Entertainment Inc.)[98](index=98&type=chunk) - In July 2022, Sony Interactive Entertainment acquired Bungie, an independent videogame developer. In September 2022, Sony established a 50-50 joint venture with Honda Motor Co., Ltd. in the mobility field[114](index=114&type=chunk) - Sony is preparing for a partial spin-off of its financial services business, Sony Financial Group Inc. (SFGI), with a planned listing in October 2025[104](index=104&type=chunk) [Business Overview](index=20&type=section&id=B.%20Business%20Overview) Sony operates through six main business segments: Game & Network Services, Music, Pictures, ET&S, I&SS, and Financial Services, with diverse global sales and intense competition Sales to External Customers by Geographic Area (FY2022-2024) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | | | | Restated | 2024 | | | (Yen in millions) | | | Japan | 2,126,508 | 3,027,526 | | United States | 3,401,402 | 3,751,239 | | Europe | 2,190,311 | 2,632,963 | | China | 855,437 | 1,000,907 | | Asia-Pacific | 1,563,414 | 1,659,776 | | Other Areas | 837,301 | 948,357 | | **Total** | **10,974,373** | **13,020,768** | [Products and Services by Segment](index=21&type=section&id=Products%20and%20Services%20by%20Segment) Sony's diverse portfolio includes PlayStation, recorded music, motion pictures, consumer electronics, image sensors, and financial services, categorized into six distinct business segments - **G&NS:** Includes PlayStation® hardware, digital software, add-on content, and network services[121](index=121&type=chunk)[122](index=122&type=chunk) - **Music:** Comprises Recorded Music (SME, SMEJ), Music Publishing (SMP), and Visual Media & Platform (animation, game apps)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - **Pictures:** Involves Motion Pictures (Columbia Pictures, Sony Pictures Animation), Television Productions, and Media Networks (including Crunchyroll)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - **ET&S:** Covers TVs, Audio & Video, Still and Video Cameras, and Mobile Communications[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - **I&SS:** Primarily focuses on the development and manufacturing of CMOS image sensors for smartphones and other applications[133](index=133&type=chunk) - **Financial Services:** Offers life insurance (Sony Life), non-life insurance (Sony Assurance), and internet banking (Sony Bank) in Japan[134](index=134&type=chunk) [Sales, Distribution, and Competition](index=22&type=section&id=Sales%2C%20Distribution%2C%20and%20Competition) Sony utilizes a global sales network with seasonal demand, facing intense competition across all segments based on innovation, content, and financial strength - Sony markets its products globally through regional sales subsidiaries, which then sell to local distributors, dealers, or directly to consumers via the internet[137](index=137&type=chunk) - Sales are seasonal, with the third quarter ending December 31 generally being the highest, driven by holiday demand in the G&NS and ET&S segments[138](index=138&type=chunk) - Competition is intense across all segments. Key differentiators are product innovation and quality in electronics, attractive software and content in G&NS, and the ability to attract top creative talent in Music and Pictures[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - The Financial Services segment faces strong competition in Japan from traditional insurers, online companies, and other financial groups, competing on financial resources, brand, network, and pricing[170](index=170&type=chunk)[173](index=173&type=chunk) [Sustainability and Human Capital](index=29&type=section&id=Sustainability%20and%20Human%20Capital) Sony's sustainability strategy targets net-zero emissions by 2040 and 100% renewable electricity by 2030, while its human capital strategy focuses on attracting and developing a diverse global workforce - Sony aims to achieve a net-zero environmental footprint throughout its entire value chain by 2040, accelerating its previous 2050 target. This goal has been approved by the Science Based Targets initiative (SBTi)[199](index=199&type=chunk) - The company targets **100%** renewable electricity use at its own business sites by 2030[201](index=201&type=chunk) - Sony's People Philosophy is "Special You, Diverse Sony." The company has approximately **113,000** employees worldwide as of March 31, 2024[211](index=211&type=chunk)[210](index=210&type=chunk) - As of March 31, 2024, women comprised **34.0%** of the total workforce and **30.7%** of management positions for the entire Sony Group[221](index=221&type=chunk) - Sony has set a target to increase the percentage of women and foreign nationals among its executives to more than **30%** each by 2030[218](index=218&type=chunk) [Organizational Structure](index=36&type=section&id=C.%20Organizational%20Structure) Sony Group Corporation operates through a global network of wholly-owned subsidiaries, with key entities located in Japan, the U.S., and Europe Significant Subsidiaries (as of March 31, 2024) | Name of company | Country of incorporation/residence | Percentage owned | | :--- | :--- | :--- | | Sony Interactive Entertainment Inc. | Japan | 100.0 | | Sony Music Entertainment (Japan) Inc. | Japan | 100.0 | | Sony Corporation | Japan | 100.0 | | Sony Semiconductor Solutions Corporation | Japan | 100.0 | | Sony Financial Group Inc. | Japan | 100.0 | | Sony Corporation of America | U.S.A. | 100.0 | | Sony Interactive Entertainment LLC | U.S.A. | 100.0 | | Sony Music Entertainment | U.S.A. | 100.0 | | Sony Pictures Entertainment Inc. | U.S.A. | 100.0 | | Sony Interactive Entertainment Europe Ltd. | U.K. | 100.0 | [Property, Plant and Equipment](index=36&type=section&id=D.%20Property%20%2C%20Plant%20and%20Equipment) Sony owns and leases extensive global facilities, with significant investments in image sensor production facilities, particularly within its I&SS segment - As of March 31, 2024, Sony Semiconductor Manufacturing Corporation holds the most significant property, plant, and equipment, with a carrying amount of **172.1 billion yen** in buildings and **607.5 billion yen** in machinery and other assets for image sensor production[234](index=234&type=chunk) - Sony Corporation of America's assets include significant intangible assets, with **1.14 trillion yen** in music catalogs and **788 billion yen** in production facilities and assets for motion pictures and television[234](index=234&type=chunk) [Operating and Financial Review and Prospects](index=39&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section reviews Sony's financial performance, liquidity, capital resources, R&D efforts, strategic outlook, and critical accounting estimates [Operating Results](index=39&type=section&id=A.%20Operating%20Results) Sony's FY2023 sales increased significantly, driven by Financial Services and G&NS, while operating income decreased due to a drop in Financial Services and I&SS segments FY2023 Operating Performance | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | | | | Restated | 2024 | | | (Yen in billions) | | | Sales and financial services revenue | 10,974.4 | 13,020.8 | | Operating income | 1,302.4 | 1,208.8 | | Income before income taxes | 1,274.5 | 1,268.7 | | Net income attributable to Sony Group Corporation's stockholders | 1,005.3 | 970.6 | - Sales for FY2023 increased by **2.046 trillion yen** (**+18.7%**) year-on-year, primarily due to significant increases in the Financial Services, G&NS, Music, and I&SS segments[241](index=241&type=chunk) - Operating income decreased by **93.6 billion yen** (**-7.2%**) year-on-year, mainly due to a significant decrease in the Financial Services segment and a smaller decrease in the I&SS segment[247](index=247&type=chunk) - Basic net income per share decreased to **788.29 yen** from **813.53 yen** in the previous fiscal year[253](index=253&type=chunk) [Game & Network Services (G&NS)](index=41&type=section&id=Game%20%26%20Network%20Services%20%28G%26NS%29) The G&NS segment saw significant sales and operating income growth driven by non-first-party titles and favorable exchange rates, despite hardware promotion losses G&NS Segment Financials (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | 2024 | | **G&NS segment total sales** | **3,644,598** | **4,267,734** | | **G&NS segment operating income** | **250,006** | **290,184** | - Sales increased significantly due to higher sales of non-first-party titles, including add-on content, and the impact of foreign exchange rates[256](index=256&type=chunk) - Operating income increased due to higher software sales, despite being partially offset by losses from hardware promotions and a decrease in first-party title sales[257](index=257&type=chunk) [Music](index=42&type=section&id=Music) The Music segment experienced sales and operating income growth, primarily from increased streaming revenues and favorable exchange rates, alongside a one-time remeasurement gain Music Segment Financials (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | 2024 | | **Music segment total sales** | **1,380,632** | **1,618,958** | | **Music segment operating income** | **263,107** | **301,662** | - Sales growth was driven by higher streaming revenues, increased merchandise and live sales, and the positive impact of foreign exchange rates[262](index=262&type=chunk) - Operating income rose due to higher sales and a **6.0 billion yen** remeasurement gain from consolidating a company previously accounted for via the equity method[263](index=263&type=chunk) [Pictures](index=43&type=section&id=Pictures) The Pictures segment's sales increased due to more theatrical releases and Crunchyroll growth, but operating income remained flat due to higher marketing costs and strike-related delays Pictures Segment Financials (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | 2024 | | **Pictures segment total sales** | **1,369,422** | **1,493,050** | | **Pictures segment operating income** | **119,255** | **117,702** | - Sales increased due to more theatrical releases and higher revenues from Crunchyroll, but were negatively impacted by the Hollywood strikes which caused delays in TV series deliveries[267](index=267&type=chunk) - Operating income on a U.S. dollar basis decreased by **10%** primarily due to higher marketing costs supporting a greater number of theatrical releases[268](index=268&type=chunk) [Entertainment, Technology & Services (ET&S)](index=44&type=section&id=Entertainment%2C%20Technology%20%26%20Services%20%28ET%26S%29) The ET&S segment's sales were flat, with lower TV unit sales offset by favorable exchange rates, while operating income slightly increased due to currency effects and reduced expenses ET&S Segment Financials (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | 2024 | | **ET&S segment total sales** | **2,476,025** | **2,453,718** | | **ET&S segment operating income** | **179,461** | **187,399** | - Sales were essentially flat as a decrease in television sales from lower unit sales was offset by the impact of foreign exchange rates[271](index=271&type=chunk) - Operating income increased due to positive foreign exchange impacts and reduced operating expenses, despite the lower TV sales[272](index=272&type=chunk) [Imaging & Sensing Solutions (I&SS)](index=45&type=section&id=Imaging%20%26%20Sensing%20Solutions%20%28I%26SS%29) The I&SS segment achieved significant sales growth from image sensors for mobile products, but operating income decreased due to higher depreciation and new product launch costs I&SS Segment Financials (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | 2024 | | **I&SS segment total sales** | **1,402,187** | **1,602,738** | | **I&SS segment operating income** | **212,214** | **193,541** | - Sales increased significantly due to higher sales of image sensors for mobile products and favorable foreign exchange rates[276](index=276&type=chunk) - Operating income decreased due to higher depreciation and amortization, increased costs for new product mass production, and higher manufacturing costs, which were partially offset by the sales increase[277](index=277&type=chunk) [Financial Services](index=46&type=section&id=Financial%20Services) The Financial Services segment reported a massive revenue increase from investment gains, but operating income plummeted due to lower gains on variable insurance products and the absence of prior year's real estate sale Financial Services Segment Financials (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 | | | | Restated | 2024 | | **Financial services revenue** | **889,082** | **1,769,954** | | **Financial Services segment operating income** | **318,118** | **173,576** | - Financial services revenue nearly doubled, mainly due to a significant increase in revenue at Sony Life from net gains on investments in separate accounts[282](index=282&type=chunk) - Operating income decreased significantly, mainly due to a **143.5 billion yen** drop at Sony Life, which was affected by lower net gains on variable insurance products and a gain from a real estate sale in the prior year[283](index=283&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Sony maintains strong liquidity with substantial cash and credit lines, funding operations and investments through internal cash flow and capital markets, with separate liquidity management for Financial Services - As of March 31, 2024, Sony had **766.4 billion yen** in unused committed lines of credit and CP programs with borrowing limits totaling **1.257 trillion yen**[332](index=332&type=chunk)[333](index=333&type=chunk) - The Financial Services segment manages its liquidity independently to meet regulatory requirements, such as the solvency margin ratio for insurance and capital adequacy for banking[336](index=336&type=chunk)[338](index=338&type=chunk) Consolidated Cash Flows (FY2023) | Cash Flow Category | Amount (Yen in billions) | | :--- | :--- | | Net cash provided by operating activities | 1,373.2 | | Net cash used in investing activities | (818.9) | | Net cash (used in) financing activities | (210.7) | | **Total Cash and cash equivalents at end of year** | **1,907.1** | - For all segments excluding Financial Services, net cash inflow from operating activities increased significantly to **1.18 trillion yen**, mainly due to a decrease in inventories compared to an increase in the prior year[319](index=319&type=chunk) [Research and Development](index=57&type=section&id=C.%20Research%20and%20Development) Sony's R&D focuses on sensing, AI, and digital virtual worlds to become an AI/Data-driven company, with G&NS leading the increased R&D spending in FY2023 - Sony's R&D focuses on three core domains: sensing, AI, and the digital virtual world, with the goal of becoming an AI/Data-driven company[343](index=343&type=chunk) R&D Costs by Segment (Yen in billions) | Segment | FY 2023 | FY 2024 | | :--- | :--- | :--- | | G&NS | 271.1 | 281.6 | | ET&S | 155.7 | 154.8 | | I&SS | 223.7 | 219.2 | | Corporate R&D | 46.4 | 45.4 | | **Total** | **735.7** | **742.8** | [Trend Information](index=58&type=section&id=D.%20Trend%20Information) Sony's strategy, guided by a 'Creative Entertainment Vision' and a new mid-range plan, targets significant operating income growth and allocates substantial capital for expenditures and strategic investments - Management has outlined a "Creative Entertainment Vision" for the next 10 years, focusing on unleashing creativity, transcending boundaries, and spreading narratives everywhere[354](index=354&type=chunk)[360](index=360&type=chunk) - The company is accelerating group synergies, noting that the three entertainment businesses (G&NS, Music, Pictures) accounted for approximately **60%** of consolidated sales in FY2023[356](index=356&type=chunk) - For the fifth mid-range plan (FY24-FY26), Sony targets an average annual growth rate of consolidated operating income of **10%** or more[378](index=378&type=chunk) - Capital allocation for the fifth mid-range plan includes **1.7 trillion yen** for capital expenditures and **1.8 trillion yen** for strategic investments, funded by an expected **4.5 trillion yen** in operating cash flow (excluding Financial Services)[379](index=379&type=chunk) [Critical Accounting Estimates](index=63&type=section&id=E.%20Critical%20Accounting%20Estimates) Sony's financial statements rely on critical accounting estimates for financial instrument valuation, asset impairment, business combinations, film revenue, deferred taxes, and complex insurance contract liabilities under IFRS 17 - Key estimates include fair value of financial instruments, impairment of non-financial assets, business combinations, and valuation of deferred tax assets[381](index=381&type=chunk) - For goodwill impairment testing in FY2023, the recoverable amount for each significant CGU exceeded its carrying value by at least **10.0%**. Post-tax discount rates used ranged from **4.2%** to **13.5%**[386](index=386&type=chunk)[391](index=391&type=chunk) - Estimating a film's ultimate revenue in the Pictures segment is a critical judgment, impacting the amortization of film costs and participation liabilities. Estimates are based on factors like genre performance, star power, and anticipated market performance[393](index=393&type=chunk)[395](index=395&type=chunk) - The measurement of insurance contract liabilities under IFRS 17 is a critical estimate, relying on significant assumptions for mortality, morbidity, lapse rates, and discount rates[398](index=398&type=chunk) [Directors, Senior Management and Employees](index=66&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) This section details Sony's executive compensation, corporate governance structure, and employee demographics, including workforce size and labor relations [Compensation](index=72&type=section&id=B.%20Compensation) Sony's executive compensation links performance to fixed, cash, and stock-based components, with FY2023 results exceeding targets and a new clawback policy in place Remuneration for Key Executives (FY2023) | Name | Position | Total Remuneration (Yen in millions) | | :--- | :--- | :--- | | Kenichiro Yoshida | Chairman, CEO | 593 | | Hiroki Totoki | President, COO, CFO | 538 | | Toshimoto Mitomo | Executive Deputy President, CSO | 111 | | Hiroaki Kitano | Executive Deputy President, CTO | 96 | | Shiro Kambe | Senior Executive Vice President | 94 | | Kazushi Ambe | Senior Executive Vice President | 93 | - The compensation package for senior executives emphasizes a link to business results and shareholder value, with a higher proportion of stock-based compensation for those with greater responsibility. For the CEO, stock-based compensation made up **78%** of the target package[431](index=431&type=chunk)[435](index=435&type=chunk)[436](index=436&type=chunk) - Performance-linked remuneration for FY2023 was based on achieving targets for Adjusted EBITDA (target: **1,750.0 billion yen**, result: **1,818.0 billion yen**) and Adjusted EPS (target: **669.5 yen**, result: **763.52 yen**)[449](index=449&type=chunk)[450](index=450&type=chunk) - Sony adopted a clawback policy effective October 2, 2023, allowing for the recovery of erroneously awarded incentive-based compensation in the event of an accounting restatement[441](index=441&type=chunk) [Board Practices](index=79&type=section&id=C.%20Board%20Practices) Sony operates with a 'Company with Three Committees' governance system, featuring a majority of independent outside directors and annual board effectiveness evaluations - Sony uses a "Company with Three Committees" structure, separating management oversight (Board) from execution (Senior Executives)[456](index=456&type=chunk) - As of June 25, 2024, the Board has **10** Directors, with a majority of **8** being outside Directors. The Chair and Vice Chair are both outside Directors[459](index=459&type=chunk)[466](index=466&type=chunk) - The Nominating, Audit, and Compensation committees are composed entirely of outside Directors, ensuring independent oversight of director appointments, audits, and executive pay[472](index=472&type=chunk)[479](index=479&type=chunk)[485](index=485&type=chunk) - The Board's annual effectiveness evaluation, supported by a third-party, concluded in May 2024 that the Board and its committees are functioning effectively[501](index=501&type=chunk)[503](index=503&type=chunk) [Employees](index=91&type=section&id=D.%20Employees) Sony's global workforce of approximately 113,000 employees is distributed across segments, with generally good labor relations despite recent Hollywood strikes Number of Employees by Segment (as of March 31) | Segment | 2022 | 2023 | 2024 | | :--- | :--- | :--- | :--- | | G&NS | 10,200 | 12,700 | 12,700 | | Music | 10,800 | 11,100 | 11,300 | | Pictures | 8,100 | 9,100 | 9,500 | | ET&S | 40,200 | 38,400 | 38,700 | | I&SS | 18,100 | 20,300 | 19,700 | | Financial Services | 13,200 | 13,500 | 13,600 | | **Total** | **108,900** | **113,000** | **113,000** | - As of March 31, 2024, Sony's employee count was approximately **113,000**, with **57,200** in Japan and **55,800** outside of Japan[532](index=532&type=chunk)[536](index=536&type=chunk) - In the Pictures segment, new three-year agreements were successfully concluded with the WGA and SAG-AFTRA following strikes in 2023[541](index=541&type=chunk) [Major Shareholders and Related Party Transactions](index=93&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section identifies Sony's major institutional shareholders and details the outstanding shares of common stock and ADRs [Major Shareholders](index=93&type=section&id=A.%20Major%20Shareholders) Sony's major shareholders include BlackRock, Sumitomo Mitsui Trust, and Nomura Asset Management, with 1.26 billion shares outstanding as of March 31, 2024 Major Shareholders (from Bulk Shareholding Reports) | Date of Report | Reported entities | Reported percentage of ownership | | :--- | :--- | :--- | | May 18, 2023 | BlackRock Japan Co., Ltd. and 9 Joint Holders | 7.43% | | June 6, 2022 | Sumitomo Mitsui Trust Asset Management Co., Ltd. and 1 Joint Holder | 6.52% | | October 6, 2020 | Nomura Asset Management Co., Ltd. and 3 Joint Holders | 5.01% | - As of March 31, 2024, there were **1,261,231,889** shares of Common Stock outstanding, of which **108,397,166** were in the form of American Depositary Receipts (ADRs)[547](index=547&type=chunk) [Financial Information](index=94&type=section&id=Item%208.%20Financial%20Information) This section outlines Sony's dividend policy, balancing stable shareholder returns with investments for future growth [Dividend Policy](index=94&type=section&id=Dividend%20Policy) Sony's dividend policy aims for stable payments while retaining earnings for future growth, with a total annual dividend of 85 yen per share for FY2023 - Sony's policy is to balance stable dividend payments with retaining earnings for growth investments[557](index=557&type=chunk) - The total annual dividend for the fiscal year ended March 31, 2024, is **85 yen per share** (**40 yen** interim + **45 yen** year-end)[558](index=558&type=chunk) [Additional Information](index=95&type=section&id=Item%2010.%20Additional%20Information) This section provides additional corporate information, including details on Sony's upcoming stock split and changes to its authorized share capital [Share Capital](index=95&type=section&id=A.%20Share%20Capital) Sony announced a five-for-one stock split effective October 1, 2024, to enhance share accessibility, increasing authorized shares from 3.6 billion to 18.0 billion - Sony will conduct a five-for-one stock split effective October 1, 2024, with a record date of September 30, 2024[562](index=562&type=chunk) - The total number of authorized shares will increase from **3.6 billion** to **18.0 billion** to accommodate the stock split[563](index=563&type=chunk) [Corporate Governance and Other Matters](index=114&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Matters) This section covers Sony's principal accountant fees, equity security repurchases, and comprehensive cybersecurity management practices [Principal Accountant Fees and Services](index=114&type=section&id=Item%2016C.%20Principal%20Accountant%20Fees%20and%20Services) Sony paid PricewaterhouseCoopers 6.013 billion yen in FY2023, primarily for audit services, with all services subject to Audit Committee pre-approval Accountant Fees (Yen in millions) | Fee Type | FY 2023 | FY 2024 | | :--- | :--- | :--- | | Audit Fees | 4,901 | 5,693 | | Audit-Related Fees | 334 | 254 | | Tax Fees | 28 | 19 | | All Other Fees | 9 | 47 | | **Total** | **5,272** | **6,013** | - The Audit Committee is responsible for appointing, setting compensation for, and overseeing the work of the independent auditor, and has a formal policy for pre-approving all services[684](index=684&type=chunk) [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=115&type=section&id=Item%2016E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Af%20iliated%20Purchasers) Sony repurchased 15.7 million shares in FY2023 at an average price of 12,927.33 yen per share, completing two publicly announced programs - In FY2023, Sony purchased a total of **15,701,169 shares** at an average price of **12,927.33 yen per share**[687](index=687&type=chunk) - The share repurchase program approved in May 2023, with a maximum budget of **200 billion yen**, was completed, with **15.44 million shares** repurchased[691](index=691&type=chunk) [Cybersecurity](index=122&type=section&id=Item%2016K.%20Cybersecurity) Sony maintains a comprehensive, board-overseen cybersecurity program, and while it experienced cyberattacks in FY2023, none were deemed material - Sony has a group-wide information security program to manage cybersecurity risks, overseen by a CISO who reports to the CDO[705](index=705&type=chunk)[709](index=709&type=chunk) - The Board of Directors oversees cybersecurity efforts, with two outside directors specifically in charge of information security who receive monthly reports from the CISO[706](index=706&type=chunk)[713](index=713&type=chunk) - In the fiscal year ended March 31, 2024, Sony was the victim of several cyberattacks, but none were assessed to be material or to have had a material impact on the company's business or financial condition[707](index=707&type=chunk) [Financial Statements](index=126&type=section&id=Financial%20Statements) This section presents Sony's consolidated financial statements, including the statements of financial position, income, cash flows, and detailed accounting notes [Consolidated Statements of Financial Position](index=129&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) As of March 31, 2024, Sony's total assets increased to 34.11 trillion yen, driven by cash and investments, while liabilities and equity also rose Consolidated Statement of Financial Position (Yen in millions) | | March 31, 2023 (Restated) | March 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | 5,722,532 | 6,776,806 | | **Total non-current assets** | 25,431,563 | 27,330,684 | | **Total assets** | **31,154,095** | **34,107,490** | | **Total current liabilities** | 9,318,409 | 10,192,045 | | **Total non-current liabilities** | 15,178,536 | 16,159,340 | | **Total liabilities** | **24,496,945** | **26,351,385** | | **Total equity** | **6,657,150** | **7,756,105** | | **Total liabilities and equity** | **31,154,095** | **34,107,490** | [Consolidated Statements of Income](index=131&type=section&id=Consolidated%20Statements%20of%20Income) For FY2023, Sony's total sales and financial services revenue increased to 13.02 trillion yen, though operating income and net income attributable to stockholders decreased Consolidated Statement of Income (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 Restated | 2024 | | **Total sales and financial services revenue** | **10,974,373** | **13,020,768** | | **Operating income** | **1,302,389** | **1,208,831** | | **Income before income taxes** | **1,274,496** | **1,268,662** | | **Net income attributable to Sony Group Corporation's stockholders** | **1,005,277** | **970,573** | [Consolidated Statements of Cash Flows](index=135&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) In FY2023, net cash from operating activities significantly increased to 1.37 trillion yen, while investing cash outflow decreased and financing activities shifted to an outflow Consolidated Statement of Cash Flows (Yen in millions) | | Fiscal year ended March 31 | | | :--- | :--- | :--- | | | 2023 Restated | 2024 | | **Net cash provided by operating activities** | **314,691** | **1,373,213** | | **Net cash used in investing activities** | **(1,052,664)** | **(818,886)** | | **Net cash provided by (used in) financing activities** | **84,300** | **(210,709)** | | **Net increase (decrease) in cash and cash equivalents** | **(568,736)** | **426,213** | | **Cash and cash equivalents at end of the fiscal year** | **1,480,900** | **1,907,113** | [Notes to Consolidated Financial Statements](index=138&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including the adoption of IFRS 17, financial instrument valuations, goodwill, and subsequent events like the upcoming stock split - Sony adopted IFRS 17 "Insurance Contracts" effective April 1, 2023, with retrospective application. This significantly changed the accounting for insurance contracts, resulting in a **1.49 trillion yen** decrease to total equity as of the transition date (April 1, 2022)[770](index=770&type=chunk)[771](index=771&type=chunk) - The acquisition of Bungie, Inc. was completed on July 15, 2022, for a total consideration of **510.5 billion yen**. This resulted in the recording of **193.8 billion yen** in goodwill in the G&NS segment[1340](index=1340&type=chunk)[1341](index=1341&type=chunk)[1347](index=1347&type=chunk) - Subsequent to the fiscal year-end, Sony's Board approved a five-for-one stock split effective October 1, 2024, and a new share repurchase program for up to **30 million shares** or **250 billion yen**[1373](index=1373&type=chunk)[1377](index=1377&type=chunk)

It's been more than 20 years since Sony's last stock split. The company's long-term performance since its last split doesn't leave much to be desired, and it's in the middle of some complex restructuring initiatives that are weighing on profits. As a result, there's a potential catalyst in sight that could be what Sony needs to ignite its business to the next level. Sony is one of the latest tech giants to announce a stock split. Last month, Japanese conglomerate Sony Group (SONY -0.37%) announced a 5-for-1 ...

Shares of the electronics and media company have appreciated by 0.04% over the course of the past month, underperforming the Consumer Discretionary sector's gain of 0.56% and the S&P 500's gain of 3.15%. For the full year, the Zacks Consensus Estimates are projecting earnings of $5.60 per share and revenue of $80.11 billion, which would represent changes of +2.94% and -5.03%, respectively, from the prior year. Research indicates that these estimate revisions are directly correlated with near-term share pric ...

Over the past month, shares of this electronics and media company have returned +0.6%, compared to the Zacks S&P 500 composite's +4% change. During this period, the Zacks Audio Video Production industry, which Sony falls in, has gained 9.8%. The key question now is: What could be the stock's future direction? Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a compa ...

Sony Pictures announced Wednesday it purchased dine-in movie theater chain Alamo Drafthouse for an undisclosed amount, more than three years after Alamo filed for bankruptcy during the thick of the COVID-19 pandemic, which crushed theatrical revenue and delayed scores of major movies. Timeline Alamo's founder, Tim League, steps down as the chain's CEO to transition to its executive chairman and is replaced by former Disney executive Shelli Taylor. Topline GC Images The COVID-19 pandemic shutters theaters gl ...

During periods of heightened volatility and uncertainty, it's not uncommon for professional and retail investors to gravitate to time-tested businesses that have handily outperformed Wall Street's benchmark index, the S&P 500, over the long run. It's why the collective FAANG stocks have been so popular over the last decade. More than a half-dozen top-notch businesses became stock-split stocks in 2024 Stock splits come in two forms: forward and reverse. A forward-stock split's purpose is to make shares more ...

Sony is the latest consumer goods company to announce a stock split. Over the last few years, many large technology companies have chosen to split their stock. Notable examples include Amazon, Alphabet, Tesla, and Nvidia. However, more recently, a number of consumer goods businesses have also engaged in stock splits following sharp rises in share prices. Energy beverage maker Celsius and big-box retailer Walmart both did so within the last year. Fast-casual restaurant chain Chipotle Mexican Grill is on the ...

Deadline hears David Ellison's Skydance is still very much in the mix and trying to create offer acceptable and attractive to Paramount. A Skydance combination is very much the favorite in Hollywood but hated by Paramount shareholders. Some sources are saying there could be some movement rather soon. Par is holding its annual meeting of shareholders next Tuesday morning. That's not a venue for big corporate announcements but some shareholders may ask about it. Par is in a bit of delicate moment having pushe ...

Wirestock/iStock Editorial via Getty Images Above: Sony Pictures, massive potential to expand IP blending its TV and film base with scale up matching close to Disney. If you look at the present candidates and would be contenders in the Paramount (PARA) free for all dead end, it is not hard to conclude that logic must bring you to a close for Sony (NYSE:SONY). As we have noted, the price might need a bit sweetening above the $26 on the table to put a smile button on everyone's chest, including Shari, and all ...

This article has been reviewed according to Science X's editorial process and policies . Editors have highlighted the following attributes while ensuring the content's credibility: A logo of Sony is seen at the headquarters of Sony Corp. on May 10, 2022, in Tokyo. Japanese electronics and entertainment company Sony says it's focusing on creativity in movies, animation and video games, rather than old- fashioned gadgetry. Credit: AP Photo/Eugene Hoshiko, File Japanese electronics and entertainment company So ...