Ladies and gentlemen, we'll now begin FY 2021 Q2 earnings announcement of Sony Group Corporation. I am Okada from Corporate Communications. I'll be serving as master of ceremonies today. This session is for media, analysts, and institutional investors to whom we have sent out an invitation in advance. This session is webcast live on our investor relations website. First, Mr. Hiroki Totoki, Executive Deputy President and Chief Financial Officer, will explain the consolidated results for FY 2021 Q2 and the consolidated results forecast for FY 2021, followed by Q&A. Duration is 70 minutes. Mr. Totoki, the floor is yours.
Today, I will discuss the following topics. The consolidated results for second quarter ended September 30, 2021, increased 13% compared to the same quarter of the previous fiscal year to JPY 2,369.4 billion. Consolidated operating income increased JPY 3.2 billion year-on-year to JPY 318.5 billion, both record highs for the second quarter. Income before income taxes decreased JPY 20.6 billion year-on-year to JPY 283.1 billion, primarily due to a deterioration of valuation gains and losses on securities investment.
Net income attributable to Sony Group Corporation's shareholder was JPY 213.1 billion, a decrease of JPY 245.5 billion compared to the same quarter of the previous fiscal year, which included a recording of a JPY 214.3 billion reversal of valuation allowances recorded against the deferred tax assets. Please see pages three to six of the presentation material for a depiction of each profit metrics. This slide shows the results by segment for FY 2021 Q2.
Next, I will show the consolidated results forecast for FY 2021. Consolidated sales are expected to increase JPY 200 billion compared to our previous forecast to JPY 9.9 trillion. Operating income is expected to increase JPY 60 billion to JPY 1.04 trillion. We have also upwardly revised our forecast for income before income taxes to JPY 990 billion and our forecast for net income attributable to Sony Group Corporation shareholders to JPY 730 billion. Our forecast for our consolidated operating cash flow, excluding the Financial Services segment, is unchanged at JPY 890 billion. This slide shows our forecast by segment for FY 2021. I will now explain the situation in each of our business segment. First is the Game & Network Services segment.
FY 2021 Q2 sales increased a significant 27% year-on-year to JPY 645.4 billion, primarily due to an increase in PlayStation 5 hardware sales and an increase in game software sales of third-party titles. Operating income decreased JPY 22.7 billion year-on-year to JPY 82.7 billion, primarily due to a deterioration in the profitability of hardware and peripheral devices. FY 2021 forecast remains unchanged from the previous forecast. Driven by an increase in add-on content sales, Q2 game software sales exceeded those in the same quarter of the previous fiscal year when stay-at-home demand was strong. Total gameplay time of PlayStation users decreased 17% year-on-year. The fact that add-on content sales exceeded those in the same quarter of the previous fiscal year is a positive sign that the quality of user engagement has increased.
In the second half of this fiscal year, the first-party software titles, Horizon Forbidden West and Gran Turismo 7, as well as major third-party software titles, are scheduled to be released. As more game fans play these exciting titles, we expect user engagement to increase even more. At this time, there is no change to our FY 2021 unit sales target for PS5 hardware, but several factors are significantly impacting the supply of the product, such as the disruption of the global distribution supply chain and limitations on the supply of components, especially semiconductors. We are continuing to exert every effort to maintain the momentum of the PlayStation platform by meeting the expectations of the people who are waiting for PS5. To further strengthen our software development capability, we announced the acquisition of Firesprite in September and Bluepoint Games this month.
Both companies have excellent technical capabilities and superb track records, and they have heretofore contributed to the development of many of our game software titles. Going forward, we plan to leverage these studios to increase the development capability of the PlayStation Studios and diffuse the expertise necessary to deploy games to PCs and mobile devices. As a result of the acquisition announced since the beginning of this fiscal year, the number of PlayStation Studios will increase by four to 16, and the number of developers will increase by almost 20%. We plan to continue to aggressively invest in our development capability going forward.
Next is the Music segment. FY 2021 Q2 sales increased by a significant 18% year-on-year to JPY 271.6 billion, primarily due to an increase in streaming revenue. Despite the increase in sales, operating income decreased to JPY 50.6 billion, JPY 3.7 billion lower than the same quarter of the previous fiscal year, in which a JPY 5.9 billion one-time gain was recorded for the transfer of a business outside of Japan. The contribution to the operating income of that quarter from Visual Media & Platform, which includes mobile game application and anime, accounted for approximately one-fourth of the operating income of that segment. FY 2020 sales are expected to increase JPY 30 billion compared to our previous forecast to JPY 1,070 billion, and FY 2021 operating income is expected to increase JPY 10 billion to JPY 200 billion.
Streaming revenue in Q2 continued to grow at a high rate, 58%, 38% year-on-year in recorded music and 47% year-on-year in music publishing. Sony Music Group, which is responsible for our music business outside of Japan, where the growth of the streaming market is conspicuous, is expected to reach record high operating income this fiscal year for the fifth consecutive year. We continue to generate hits, thanks to enhanced efforts to discover and nurture artists. In Q2, the recorded music business has an average of 38 songs in Spotify's Global Top 100 Songs ranking.
Moreover, the new song Easy On Me which was released by world-renowned singer-songwriter Adele after a six-year abyss on October fourteenth, made history as the most-played song on Spotify in a single day. We have high expectations for Album 30, which will be released next month. Sony's competitive advantages in the music business lie in our global ecosystem that can meet the diverse needs of artists and the fact that because our business, music business is part of the Sony Group, we can offer artists opportunities to express their creativity in areas such as games and pictures. In addition, we are enhancing our many artist-friendly initiatives, such as offering them financial and other support, and we believe these initiatives underpin the strong financial performance of this segment. Next is the pictures segment.
FY 2021 Q2 sales increased a significant 40% year-on-year to JPY 260.7 billion, primarily due to an increase in sales of television productions and media networks. Despite the impact of the increase in sales, operating income decreased by JPY 1.2 billion year-on-year to JPY 31.6 billion, primarily due to an increase in marketing expenses related to the release of films in theaters. FY 2021 sales are expected to increase JPY 60 billion compared to our previous forecast to JPY 1,180 billion, and operating income is expected to increase JPY 18 billion compared to our previous forecast to JPY 108 billion.
Primarily in the U.S., we have begun to gradually release major films in theaters, and our film, Venom: Let There Be Carnage, which was released this month, generated box office revenue approximately JPY 10 billion in the first 3 days of its release in the U.S., which is the best opening performance of any film during the pandemic. We are planning to release our compelling IP from Sony to theaters going forward, such as Ghostbusters: Afterlife and Spider-Man: No Way Home. On the other hand, we plan to monetize our family-oriented films this fiscal year, such as Hotel Transylvania: Transformania, by directly licensing them to video streaming services, as we do not believe they will draw sufficient theatrical audiences during the pandemic.
Going forward, we plan to continue to respond appropriately to the changes in the environment through a flexible releasing strategy aimed at maximizing the long-term value of our films. Last month, we signed a non-binding term sheet to merge subsidiary of Sony Pictures Entertainment, SPE, and Zee Entertainment Enterprises, a media company in India. Under the proposed merger, SPE it would hold a majority stake in the resulting merged company. Under the term sheet, the two parties are conducting mutual due diligence, and Zee has agreed to negotiate exclusively with SPE for a period of 90 days with the goal of reaching definitive agreements. India has an economic base which is rapidly growing, primarily among the younger generation, and it is the largest linear TV market in the world that is still growing.
In addition, the opportunity for digital distribution services is beginning to grow rapidly due to improvements in India's communications infrastructure. SPE's Indian business, which includes the video distribution service Sony LIV, is a leading TV broadcasting business in India, and it accounts for slightly less than 40% of the sales of media networks in Q2. As a growth area in the pictures segment, we plan to continue to proactively seek opportunities to expand this business by using the profitability of the TV broadcasting business and our content assets to strengthen our digital distribution service. Now I will explain our anime business that spans the music and pictures segments. On August ninth of this year, we completed the acquisition of Crunchyroll by Funimation, a joint venture between SPE and Aniplex.
Crunchyroll is the world's largest anime and dedicated direct-to-consumer service, with more than 120 million registered users and more than 5 million paying subscribers in more than 200 countries and territories. The market for Japanese anime outside of Japan has grown significantly at a compound annual growth rate of 30% since 2014. We aim to create the most beloved video distribution platform for anime fans around the world by delivering compelling content through enhanced distribution service brought about by the integration of Funimation and Crunchyroll. Next is the Electronics Products and Solutions segment. Primarily, due to the impact of foreign exchange rates and an increase in the sales of smartphones, Q2 sales increased 9% year-on-year to JPY 581.9 billion.
Operating income increased significantly JPY 19.3 billion year-on-year to JPY 72.7 billion, primarily due to the benefit of the increase in sales and improvement in the product mix. FY 2021 sales are expected to decrease JPY 40 billion compared to our previous forecast to JPY 2,280 billion, while operating income is expected to increase JPY 20 billion compared to the previous forecast to JPY 190 billion to reflect the results of FY 2021 Q2. During Q2, we were unable to meet the demand for some products because the resurgence of the COVID-19 pandemic in Southeast Asia led to limitations on our factory operations and on the supply of content. However, we maintained a high level of profitability due to our ability to maintain prices and shift to higher value-added models.
In the TV business, although we were able to maintain market prices during Q2, a rapid decrease in panel prices going forward could impact the market prices of our products. We have incorporated that possibility in our forecast, and we'll closely monitor market trends in order to control inventory and margin. In addition, limitations on the supply of components, especially semiconductors, have recently become apparent, and we have incorporated the impact of these shortages in our forecast for the fiscal year. Prior to incorporating these risks, the forecasted operating income for the second half of the fiscal year was essentially flat compared to the second half of the previous fiscal year. Next is the Imaging and Sensing Solutions segment.
FY 2021 in Q2 sales decreased 9% year-on-year to JPY 278.3 billion, and operating income decreased JPY 1.0 billion year-on-year to JPY 49.7 billion. Our FY 2021 sales forecast remains unchanged from the previous forecast, but operating income is expected to increase JPY 10 billion compared to our previous forecast to JPY 150 billion.
Our FY 2021 sales forecast remains unchanged from the previous forecast. Operating income is expected to increase JPY 10 billion compared to our previous forecast, JPY 150 billion. Although the mobile sensor business was impacted by the recent weakness in the Chinese smartphone market, the tight supply and demand situation for semiconductors in general, and delays in the production of smartphone and components for smartphones in the Southeast, there is no major change to our FY 2021 forecast for the business, primarily due to the positive impact of foreign exchange rates and reduction in expenses. We are taking steps to minimize the impact on our financial performance this fiscal year of restriction on the quality and increase in the price of logic wafers procured from foundries. The efforts we have made to expand our customer base are also progressing steadily.
However, securing the logic wafers necessary to increase the quantity and enhance added value of our sensors from the next fiscal year has become a major issue. We are continuing to negotiate with our foundries, but the tight supply and demand situation is expected to continue next fiscal year. Despite these challenges, we upwardly revised our fiscal year forecast for image sensors sold to audiovisual and industrial equipment. The market for these sensors is growing faster than anticipated, primarily due to recovery in the market for digital cameras and increase in demand for factory automation. This market is more stable than the market for mobile application and has helped profitability. We expect that it will contribute to the stabilization profit of the entire image sensor business going forward.
Now I'd like to discuss the potential construction of a semiconductor factory in Japan by Taiwan Semiconductor Manufacturing Company, which was announced by TSMC the other day. Sony outsources almost all the production of logic wafers as part of the process of our manufacturing image sensors. Securing a stable supply of logic wafers is a critical business issue at the time when the global semiconductor shortage is expected to be prolonged. Building a factory of this nature could serve as a possible solution to this problem. In close collaboration with TSMC and the Ministry of Economy, Trade and Industry of Japan, we are studying the possibility of adding TSMC's Japan factory to our sources of logic wafers by leveraging our expertise managing our own semiconductor factories in Japan to assist TSMC in building the new factory.
We believe that further strengthening and deepening our partnership with TSMC, which has a world-leading semiconductor production technology, is extremely meaningful for Sony. However, this matter is subject to further study and discussion. Last is the Financial Services segment. FY 2021 Q2 Financial Services revenue was JPY 368.4 billion, essentially flat year-on-year, and operating income increased JPY 6 billion to JPY 43.1 billion, primarily due to an increase in profit at Sony Life Insurance Co., Ltd. New policy amount in force at Sony Life during Q2 exceeded that in the same quarter of the previous fiscal year, primarily due to the strength of our business selling to corporations. FY 2021 Financial Services revenue is expected to increase JPY 90 billion compared to our previous forecast to JPY 1.49 trillion. Our forecast for operating income remains unchanged from the previous forecast.
Lastly, I will discuss the strategic investments we are accelerating in order to grow over the medium to long term. Approximately JPY 1.4 trillion in strategic investment we made from April 1st, 2018 to March 31st, 2021 was used to acquire businesses, while the rest was used to obtain minority equity stakes and repurchase Sony's stock. We expect to generate operating cash flow of approximately JPY 180 billion from the acquired businesses over the three years from April 1st, 2021 to March 31, 2024. As a part of our resources for capital allocation, we intend to use this cash flow for further investment, accelerating the cycle, whereby returns generated from previous investments are used to invest in future growth.
Our ability to invest early in areas with high growth potential has increased, and opportunities to invest have also steadily increased, especially in the entertainment space. During the period of current Mid-Range Plan, we plan to make strategic investment more than JPY 2 trillion, including Sony stock repurchases. The total amount paid so far for companies and assets that have already been acquired, including Crunchyroll, is approximately JPY 280 billion. The total amount of investment already decided upon is approximately JPY 120 billion. Last week, we announced the sale of GSN Games, a casual mobile game business under SPE. We plan to reallocate the capital generated from the sale of businesses and assets like this, the strategic investment in growth area. This concludes my remarks.
Thank you very much. It was Hiroki Totoki, Executive Deputy President and Chief Financial Officer. From now in five minutes to 4:00, we'll have a Q&A by journalists, and from 4:20, Q&A for investors and analysts. We are scheduled to have 20 minutes each for Q&A. Those media, investors, analysts who have registered in advance, please connect to the number designated in advance. Also, those of you who have not registered in advance, you can continue to see the Q&A session on the webcast. Would you kindly wait until the Q&A session begins? We'll start Q&A from media shortly. Would you kindly wait for a few minutes? Thank you very much for waiting. Now we are going to entertain questions from the media. We have with us Hiroki Totoki, Executive Deputy President and Chief Financial Officer.
Naomi Matsuoka, Senior Vice President in charge of Corporate Planning, Control, Finance, and IR. If you have any question, press the asterisk followed by one. When your turn comes, we'll call your name. Please identify yourself, your name, and affiliation before asking a question. I would like to ask you to limit your questions to two questions. Also, in order to prevent audio feedback, when you ask a question, turn off the volume of the peripheral equipment. Your cooperation is appreciated. In the event, due to the communication environment, if the sound is disrupted, we may move to the next person because of the constraint of time. Also, if you'd like to cancel your requested question, press asterisk followed by two. Now we would like to start Q&A session. If you have any question, please, press asterisk followed by one. The first is Inomata-san from NHK.
Inomata-san, your question please.
Thank you very much. I'm Inomata from NHK. Can you hear me?
Yes we can.
Thank you. I have two questions. First question has to do with impact of COVID-19. The state of emergency was lifted, and economic activities are recovering gradually. The impact, how do you factor in the impact this time? And also, are there going to be changes in the stay-home demand, and what would be the possible impacts upon your business? That's my first question. Second question, the semiconductor production, TSMC of Taiwan, TSMC is going to establish their plant in Japan, and you are a candidate for working together with them, TSMC. To the extent that you can share with you, can you explain how you are going to collaborate with them?
Thank you for your questions. Two questions. I am going to respond to both of your questions. First, impact of COVID-19. Secondly, TSMC, construction of the plant of TSMC and our position stance to that. With regard to your first question, COVID-19, in the second quarter, the impact of the production and logistics is large, and we have difficulty and challenge in managing. Frontline people have worked well, and it was managed well as a business. Going forward, the pandemic might spread in the future, and it may subside, so we should be accumulating the know-how to respond to such pandemics and thus respond accordingly. Last year, in game business, impact or effect of the stay-home demand was large, and this was a tailwind for our business.
This year, this tailwind is less. We have less impact from stay-home demand. Your second question, TSMC's new factory. As I mentioned earlier, for us, image sensor logic wafer and the stable procurement of that is a very important thing for us. The stable supply of semiconductor is the key for the Japanese industry as a whole. Therefore, as much as possible, we'd like to collaborate on this front. As for the details, it is a matter, there are many things which are still under discussion. Of course, when decisions are made promptly, we are going to explain to you.
Thank you.
The next question. Asahi Shimbun, Suzuki-san, please.
Asahi Shimbun, Suzuki. Thank you for the presentation. Can you hear me?
Yes.
Please. Thank you. I have two questions. First, imaging and that imaging issue. As you explained, TSMC and Sony will be collaborating. I understand. More specifically, are you going to hold a stake in the company? Can I answer that? Also, you say that it will contribute to the Japanese industry on the whole, but automotive sectors. Excuse me. I believe that automotive sectors will also be involved in about gaming. The PS5 production is now picking up. The second quarter, again, it's 3.3 million units, so it's slow. I'm wondering if you can reach the 14 million that you are targeting. Is there a possibility that you'll be reducing your target? Can you elaborate on that? These are my two questions.
Thank you for your questions. I will respond to both questions. Well, first, about the TSMC and the factory of TSMC, whether we will hold a stake in the new factory. Well, we are targeting towards securing stable supply. That is the reason why we are going to support them in building and operating this new factory. So when it comes to investment and the amount of investment, those details, this is currently under study and being discussed. Therefore, once something is decided, we'd like to promptly inform you. About PlayStation 5. Well, this fiscal year's target. Well, of this fiscal year, in the second year of PS4, it was, to be more precise, 14.8 million units.
We were targeting to exceed this number, and we have not changed this target. Meanwhile, well, worldwide, there is a disruption in the logistics, and mainly semiconductor device supply are being constrained. This is having a larger impact. And as you know, the hardware sales in the first quarter was less unit-wise. So this is having an impact on us, and likewise for the second quarter. But I think that with our effort and putting in place different measures, the PS platform momentum can be maintained. Especially, the users are waiting for the PS5, we want to be able to supply as many PS5s as possible to our customers who are waiting. That is our thinking. Thank you.
The next question from Nikkei, Mr. Bam, please.
This is Bam from Nikkei. Can you hear me?
Yes.
The answer to Asahi Shimbun question, you have the comprehensive negotiation and consultation. Can we understand that includes equity investment, TSMC in their press conference for the joint venture. Normally, they didn't engage in that. But this time case by case, they study this possibility. Equity investment or the part of the factory is owned, and thus some funding is provided. Do you have that kind of equity investment?
Thank you very much for your question about this particular issue. Let me be redundant. Let me repeat myself. Currently, the discussion is underway, and consultation is underway. Therefore, I'm not able to make comments further. Once decisions are made, I would like to share that decision immediately with you.
Now we'd like to move on to the next question. If you have any question, press asterisk followed by number one. Mr. Matsuda from Nikkei Shimbun, please.
Matsuda from Nikkei. Can you hear me?
Yes, we can.
Thank you. I have two questions. Earlier, the semiconductor plant was stopped due to COVID-19, and you had difficulty managing the situation. In order to conduct a stable procurement, how are you managing this? Can you elaborate me that? Also, the impact of the shortage of semiconductors is seen in G&NS and EP&S. How much monetary impact is there? Can you explain? Second question, capital allocation. You have been conducting acquisitions, and cumulatively, JPY 180 billion operating cash flow is forecasted. More specifically, in what area are you going to do this? Are you going to do investment or return to the shareholders?
Thank you for your questions. I would like to respond to both of the questions. First, semiconductor shortage and other issues of the supply chain. In order to stably procure, what can we do? In various ways, we have been addressing this question.
We are making common standardization of the parts and components. We also ask the affiliated companies to produce for us. Where there's a forecast of a shortage, we will be increasing the level of inventory higher than usual, and also change the design so that other parts and components can be used. Various measures can be taken with a combination of these measures. So far, at least up until the first half of this fiscal year, we have been able to minimize the negative impact. As to the monetary amount, how much impact is there? I think it's difficult to tell how much, but rather I think that we are managing the situation rather well. In the second half, this situation is likely to continue.
As I touched upon in my presentation, we have factored in the risk in the EP&S segment. With regards to your second question, capital allocation going forward. Basically, from this fiscal year, for three years in the Mid-Range Plan, more than JPY 2 trillion is to be allocated for strategic investment. As we have stated, strategic investment for the growth of the business in the future, we will be making strategic investment. That is our topmost priority, followed by CapEx and return to the shareholders, a share buyback, repurchase of our shares. That is the order. Thank you.
Next question. Nishida-san, freelancer please.
Can you hear me?
Yes.
I have two questions. First, image sensor. About the image sensor. I think there is some instability for those for smartphones. What about the product mix changes? Can you explain about the changes in product mix? Are you going to shrink the smartphone portion, or are you going to add on more for the industrial application? Can you give me a total view? About PlayStation 5, the second question. Well, the production is not picking up. Therefore, I would like to know what is happening about the momentum. I do understand that there is a problem, but about unit sales and consumer momentum, are you not facing any adverse situation, or do you need to come up with measures in the mid to long term?
Can you talk about your future plans? Thank you.
I will try to respond to both of those questions. Well, about the image sensor, imaging sensor, those for smartphones and the other is for industrial equipment cameras, and for those applications. It's a mix of those, semiconductors or imaging sensors. We are planning to add on, but about the size, the scale, the smartphone market is much bigger and therefore I think we have to observe the trend in the smartphone market. We have to carefully monitor what is happening in the smartphone market. That's the first part. About PS5, w e as early as possible would like to release as many units, this is what we have in mind. So far overall in MAU, it's about 100 million people.
PS5 ratio-wise, it's less than 20%. When it comes to user engagement, PS5 sales does not immediately have impact on users' engagement. So it's hard to believe that there will be a direct impact. Now, add-on contents. Well, it is more than last second quarter year-on-year, because we think that the user engagement has improved. We want to try to positively take advantage of this momentum in PS5. Also, we have another release in the fourth quarter and therefore we would like to carefully monitor the trend. Thank you.
Time is getting short, and therefore the next question will be the last question. From Nikkan Kogyo Shimbun, Yasukawa-san, please.
Can you hear me?
Yes we can. Please.
Yasukawa from Nikkan Kogyo Shimbun. I have two questions. Regarding the yen depreciation and how much the business incorporates the impact of the cheap yen and the government. Regarding the quarterly disclosure, the government will begin the discussion about that. What is your view about this new initiative by the government?
Thank you very much for your question. The first question is about the impact of the yen depreciation on the business results. The second is regarding the review and the revision of the quarterly disclosure, what is our view on it. Regarding the first question, I would like to answer your question.
The second question will be answered by Matsuoka-san. Regarding the cheap yen, the currency. This time, compared to the previous forecast, the forecast this time is the currency assumption is the euro is the JPY 1 higher for yen, the JPY 131 to JPY 130 . There is a change assumption. For dollar, the exchange rate stays at the same level of 110 yen. This impact has not changed significantly as this indicates. This has been already disclosed, and 1 yen higher means what is impact on the consolidated results. For the Game & Network Services and EP&S and I&SS businesses, 1 yen higher means that in terms of dollar, it's positive.
In terms of euro, JPY 5.5 billion negative impact is recorded. That is a simulation that we include for our forecast. For music and pictures, the combined, JPY 1 higher, means that in terms of dollar, the JPY 2 billion negative impact. That is the impact on the operating profit, operating income. That is the sensitivity that we use for forecast. Excuse me, dollar is JPY 111 . That is our assumption. The JPY 1 lower. That is 111 yen versus against the dollar.
The second question. I will answer the question. I believe that there are many different opinions on this, but on our part, for the policy, the discussion is still underway. At this moment, I would like to refrain from making any comment.
That's the comment from myself.
Since time is up, that we would like to now bring to an end the questions from the media members in order to change the questioners. The question answer from the analysts will begin at 4:21 P.M.
We'll begin the Q&A session by analysts shortly. Could you kindly wait? Thank you very much for waiting, ladies and gentlemen. Now we are going to entertain questions from the investors and analysts. I will be serving as the MC. Hayakawa from Finance and IR. The respondents are Hiroki Totoki, Executive Deputy President and Chief Financial Officer, Naomi Matsuoka, Senior Vice President in charge of Corporate Planning and Control, Finance and IR, and Hirotoshi Korenaga, Senior Vice President in charge of Accounting. If you have any question, please press the asterisk followed by one. We'll be calling your names when your turn comes, so please speak when your name is called. I'd like to ask you to kindly limit your questions to two.
Also, in order to prevent the echoing, I would like to ask you to turn off the volume of your peripheral equipment when you ask a question. Your cooperation is appreciated. In the event the voice is disrupted due to the communication environment, we'll be moving on to the next person because of the paucity of time. If you'd like to cancel your request or question, press asterisk followed by two. We'd like to begin the Q&A session. If you have any question, please press asterisk followed by numeral one. Yes. The first question, JPMorgan, Ayada-san please.
Thank you very much. Ayada from JPMorgan. Game and Semiconductor, I have one question each. First is about games. User engagement.
In the supplementary material page nine, monthly active user and member of PlayStation Plus, and how you analyze the numbers. Monthly active users have been decreasing over the past quarters, but it has stopped the decline. PS Plus members on a quarter basis is increasing. Third quarter towards the Christmas period quarterly. Are you expecting that there will be a stop in the decline of MAU and PS Plus at this timing? We are not expecting that the number will increase. PS Plus collection contributed to increasing the number of members. If you have any ideas, please let us know. My second question. Image sensor. As usual, capacity and the record of wafer input and actual results.
In relation to that, Totoki-san earlier talked about the procurement of logic in the future, and this might become a point of concern in the future. Putting that aside for the time being, inquiries from the mobile customers, especially in this area, toward next year, a mix will increase with the size becoming larger. Is there any change? As you talk with the customers, what are the focus of the discussion with the customers? Can you share with us your ideas?
Thank you very much for your questions. Both questions, I am going to respond to both of the questions that you have asked. First point, MAU, monthly active users, and the PS Plus members, the trend of the membership. How do I look at this, was the question.
PS Plus. At the end of June, there was a decrease in the number of members, but it was a temporary phenomenon as we analyze. What triggered the temporary decline is difficult to pinpoint, but at any rate, it has already hit the bottom. Second quarter, especially including promotion activities, it was increased, taken measures to increase the membership. Promotion becoming effective is not wrong at all. The recent trend is such that, whether or not there is a stay-home demand, it fluctuates and difficult to analyze. After the second quarter has ended, and the factor of the stay-home demand has already disappeared as we move to the year-end holiday seasons, we look at the current situation as positive, and we would like to come up with a strong momentum. Then I&SS capacity.
The numbers, FY 2021 second quarter end, in total 140K per month, and the third quarter end 137K per month it is expected. This is due to the change in model mix. The number of wafers input in the second quarter result, three-month average is about 139K. As of first quarter, forecast was 138K. It is practically about the same level as forecasted at full capacity. In the third quarter, the number of wafers, a simple average of three months is 138K. We are expecting full utilization. The trend of a larger size as they change smoothly, the discussion with the customers, not only next year, but we are talking with, looking into the longer future.
As we have expected and forecast, the trend of larger size is likely to continue. Specific customer in China is going to drive larger size, and the vacuum created by their disappearance is not completely filled. So the pace might slow down slightly as compared to what I have explained last year.
Next question. SMBC Nikko, Katsura-san please.
Can you hear me? Thank you. Well, the supply chain issue, including the pandemic impact and page 22 cash allocation on your slide, that included, I would like to ask two questions. First, about the impact of COVID-19. Well, Totoki-san, in your presentation, you said that in second half of the year compared to last year, you think that there will be a risk of JPY 38 billion-JPY 40 billion. But other than that, G&NS or I&SS, the impact in those categories as well of the pandemic impact, how do you see it? If you could elaborate on the overall impact on different segments.
The second page 22 is capital allocation, and in the three years it was JPY 5.3 trillion, and CapEx are more than JPY 2 trillion. At TSMC talks once this comes up and once it's made public, which will be included in? It's just a hypothetical question, but the reason why I ask this is as an investment size, it's huge, and we're wondering if there is an add-on effect. I just want to understand the thinking behind this. Other than that, a strategic investment you said about JPY 120 billion has already been decided, and I believe that Sony LIV is included here. If it's not, please say so. More than JPY 2 trillion.
I think in terms of the implementation size, it's still limited, so can you elaborate?
Thank you for your questions. Well, first, your first question about the supply chain risk. Well, as you have rightly said, for EP&S, it is included, and the amount is close to what you are saying, so this is factored in, estimated. If there are other segments, well, I cannot say anything for sure now, but I think the Game & Network Services segment, which is also producing hardware, will be impacted. Unlike EP&S, I believe that the supply delay and impact on profit and loss will be totally different. In case of PS5,
Just because shipment is late, it will not aggravate this fiscal year's performance. It's not as direct an impact. I think that for this fiscal year, the risk is mainly factored in the EP&S. That is the current thinking behind what we have put together here for this fiscal year in the forecast. Now about capital allocation, the TSMC. If I talk about TSMC, I will have to go into the detail specifics, and it's very difficult for me to explain. Try to avoid that. In general terms, if we're going to hold a stake, it'll be a strategic investment. If it's CapEx, it'll be included under CapEx. Please understand that to be the case. This is still under discussion and there is nothing decided. Please understand that is the current situation.
About the contents about Zee, Matsuoka-san can explain that part.
You talked about whether Zee is included in the strategic investment, which has already been decided. No, it is not included, and we have to follow up on what happens from here and after. The ones that are included in those already decided, those are the ones where we have already made an official approval and made a decision. That is included in the ones that have been already decided. In order to get to that stage, Zee, as I explained, we are still doing due diligence and nothing is finalized and decided yet.
Now we would like to move on to the next question. Nakane-san from Mizuho Securities, please.
Thank you very much. My name is Nakane from Mizuho Securities. Can you hear me?
Yes.
I had two questions. They are not related to the consolidated results this time. The first question is, Mr. Yoshida mentioned in MRP connected to 1 billion people. For games, there are the figures disclosed, but Crunchyroll and Zee may be included, and many other new connections will be emerging. To the extent possible, the Crunchyroll 120 million, and that is what you mentioned. At the end of September, if there is anything that you can disclose, please share that with us. If possible, at the end of the term, the fiscal year, what is your prospect? How, you know, what way are you going to disclose those figures? The second question is related to the project in India.
At this moment, under the current Mid-Range Plan on a group basis, how clear the strategy about India is within the group? According to my understanding so far, in each business segment has its own the strategy. Currently, the synergy is emphasized, but still it looks like each business has its own. In India, media network and other pictures and films, pictures and the music, I think the situation is getting better. For instance, the collaboration between the different segments, like in America, and for the regional strategy, if you have any group-wide strategy, please let us know. Thank you.
Your questions, there are questions from you, and I will answer two questions and the Matsuoka-san will supplement my answer. The connection with 1 billion people, our challenge for that target. That is our long-term vision. That is also defined as our aspiration. That's the way I interpret. Every quarter or every fiscal year, it's not like something that we show like subscription. Connecting with 1 billion people, in order to fulfill that vision, we do need to make investments strategically, and that has been executed, and other measures are incorporated, and group synergy is also fully maximized. Personally, I believe that throughout a year, we engage in different kinds of activities, and there are the updates about the activities.
Following that cycle, I think, we are able to share that information with you. As for the policy of disclosure, we do not have any, the finalized one yet. What we do and, that announce it, whether we are able to connect with 1 billion, the people, I hope that you observe the trend and progress and give us your feedback. Second, the question, that is the group-wide strategy vis-à-vis India. In answering that question, there is Sony LIV.
Within the group in India, this business unit is a very important driver to promote the growth. That is the reason we engage in the deal in India. Information obtained through this other project and the opportunities for other business areas. Among the top executives within the group, the discussion is constantly held. Through those dialogue, group synergy will be manifested and realized in my view. Not just limiting this as a slogan, we would like to translate that into actions. Matsuoka-san, do you have any point to supplement?
In India, as you know, is a big area with the potential for great growth. Sony LIV has been increasing subscriber size at the end of September. JPY 470 million is the number. Therefore, going forward in India, as the Totoki-san mentioned now, for the video and music, the pictures and music, we would like to use the synergy between the two. Also going forward, the whole game potential does exist in India. That potential will be also taken into consideration and a lot of discussions and the dialogue has been going on.
Time is running short, so the next person will be the last person. Morgan Stanley MUFG Securities, Ono-san.
Thank you. I'm Ono from Morgan Stanley. I have a question and confirmation regarding CMOS. In the market, supply chain, CMOS sensors for mobile, Sony is lowering the price and the market, the inventory of mobile sensor is getting unhealthy, some people say. To the extent that you can share with us, what are the changes in the mobile? How do you look at the changes in the market? In relation to that, last time, at the time of the first quarter results, mobile wafer unit price has gone down by 10% year on year. Currently, on a monetary amount basis, for mobile and for AV, mainly camera, the ratio is about 70%-30%, according to my understanding.
Including the first question, as you think about the mix in the future, there's going to be a further focus upon AV or related to the question by Ayada-san, custom order will support next year and go back to mobile, which will result in improvement of profit. Can you please explain this? Sorry for the vague question. Thank you very much for your questions. The market of mobile sensor, how do I look at this market? If I'm to explain this, mobile market will continue to expand. Of course, for the industrial machine and for AV, stably, it's stable and the margin is high. But in terms of the size of the market, mobile market is much larger. You said 70 to 30, but the ratio of mobile is even higher than that.
Well, the inventory level of the sensor market, to the extent of my knowledge, by the kind of inventory which will have difficulty for negotiation with the customers, we do not hear such voices at all. Prices, it is in the course of negotiation and discussion with the customers, price is discussed. When it comes to specific prices, I would like to refrain from referring to specific prices. On our part, our policy remains unchanged. For high-end, a larger size, this market will grow and expand. This is where we can leverage the strength of our technology, higher quality and larger number of pixels and more minute. There is a move to pursue both.
Depending upon the needs of the customers, we have to grasp the needs of the customers, and we will be competing in the field where our strengths can be maximized. The big trend remains unchanged. The production capacity will be increased as demand increases and strengthen R&D. This policy remains unchanged.
That's all from me. Thank you very much.
It's time now for us to end today's Q2 earnings announcement meeting. Thank you for your participation.