Sony Group Corporation · TSE:6758
Sony — Investor Day (2024)
68 slides from Sony's investor day presentation, 2024
Slide 1: Corporate Strategy Meeting 2024
CORPORAT E WE STRAT E GY¥--— WMEETING > — 2024 he
Slide 2: Kenichiro Yoshida, Chairman and CEO
Kenichiro Yoshida Chairman and CEO, Sony Group Corporation ¢« Thank you all for gathering here today. * Today, | will talk about the direction of our management, and then President Totoki will talk about our mid- to long-term initiatives.
Slide 3: Fill the world with emotion, through creativity and technology
Pyro : Fill thé world with Emotion, — through the power of creativity andetechnology. The Sony Group’s Purpose is to “fill the world with emotion, through the power of creativity and technology.” In other words, our social significance is to create Kando and deliver it to the world together with our
Slide 4: Growth of Entertainment Businesses
Growth of Entertainment Businesses Approx 60. Gaming 30» — Music ——— ————— _ Pictures FYI4 FYIS FYI6 FYI7 FYI8 FYI9 FY20 FY21 FY22 FY23 In recent years, we have been focusing on our entertainment businesses that moves people’s hearts, such as games, music and pictures. Currently, these three enterta
Slide 5: Group structure reorganized in 2021
Financial Services Sony Group Imaging & Sensing Solutions Entertainment, Technology & Services We also reorganized our Group architecture in 2021. We believe that establishing a system in which each business is independent and equally connected has led to the acceleration of Group synergies.
Slide 6: Sony Financial Group
—) Sony Financial Group & Sony Bank § Sony Life S Sony Assurance —) Sony Lifecare ¢« We also reorganized our Group architecture in 2021. ¢ We believe that establishing a system in which each business is independent and equally connected has led to the acceleration of Group synergies. ¢ Additionally,
Slide 7: Creation Shift
¢ In addition to focusing on entertainment, another management direction is the “Creation Shift”.
Slide 8: Sony has three main business layers
Sony has three main business layers. Content, which is directly connected to Kando, products & services that create Kando, and semiconductors (CMOS image sensors) that support creation. We have shifted our focus to the creation side in each of these three business layers.
Slide 9: Gaming and Pictures content creation
Gaming INSOMNIAC HOUSEMARQUE g Firesprite mixxes Bluep( ))nt H8VEN ~~ BUNGIE |} FIREWALK & NEON Kol ALAMO RECORDS LASENGLE somethinelse Pictures Kier @ crunchyroll PRecune BADWOLF INDUSTRIAL P .e) a ¢ The starting point for the shift to creation was the acquisition of EMI Music Publishing in 2018. *
Slide 10: Crunchyroll acquisition
Best Action JUJUTSU KAISEN Season 2 The acquisition of Crunchyroll in 2021 was an investment in a distribution service that delivers Kando. Crunchyroll aims to contribute to the anime creator community by spreading Japanese anime to the world. 10
Slide 11: Operating Income of Entertainment, Technology & Services Segment
Operating Income of Entertainment, Technology & Services Segment (FY23) Creation Technology * In the products & services layer, we are alSo working hard to create entertainment together with creators. Currently, profits from creative-related businesses account for more than 80% of the operating inco
Slide 12: CMOS Image Sensor
CMOS Image Sensor « Inthe semiconductor layer, CMOS image sensors support creation by many people, from movie creators to smartphone users across the globe. ¢ We have implemented capital expenditures amounting to approximately 1.5 trillion yen in CMOS image sensors, over the past six years. * These
Slide 13: Creativity resides in people
* Creativity resides in people. And people live in the present. ¢ From here, | would like to touch on two creation technologies that we are focusing on, using “real-time” as a keyword. 13
Slide 14: Real-Time Creation
REAL-TIME CREATION CMOS Image Sensor Game Engine ¢ One is the CMOS image sensor technology that | just mentioned and the other is the game engine, which is a real- time computing technology. 14
Slide 15: Product lineup for creators
In recent years, Sony has been expanding its product lineup for creators. CMOS image sensors within these products help creators capture the Kando moment. The Alpha 9 Ill, a mirrorless interchangeable-lens camera released this year equipped with a full-size image sensor that uses a global shutter sy
Slide 16: Partner of World Athletics
Sony is a proud Partner of World Athletics and the World Athletics Series events, not of the individual athletes The Alpha 9 IIl was used by creators at the World Athletics Indoor Championships in Glasgow, United Kingdom in March of this year. By reading out all pixels simultaneously, even fast-movi
Slide 17: VENICE digital cinema camera
aa 3 |" We TTT we VENICE VENICE 2 In film production, the use of our digital cinema camera “VENICE" is expanding. Recently, it has been used in “Godzilla Minus One” and many other productions. In addition to filmmaking, it was used in the halftime show of the Super Bowl in February of this year. 17
Slide 18: Authenticity
Authenticity « We believe that it is of great significance for creators to capture the real world “as it is." 18
Slide 19: Advanced In-Camera Authenticity Technology
Advanced In-Camera Authenticity Technology e “As it is” means that the photograph was taken by a person or that a subject exists in reality. ¢ CMOS image sensors are also used to verify such authenticity. 19
Slide 20: Creation Technology: game engines
Creation Technology, In addition to CMOS image sensors, game engines play an important role in the creative field. Games are computer graphics that are generated in real time, in response to users’ actions. The game engine, which is at the core of real-time computer graphics, has evolved in recent y
Slide 21: Torchlight
TORCH LIGHT ¢ Sony Pictures Entertainment's Torchlight, makes it possible to simulate filming on set, by using a game engine. 21
Slide 22: Virtual production
e Virtual production utilizes the real-time technology of game engines linked with a camera to generate background images. ¢ This filming method allows both the director of photography and actors to check the footage on the spot. ¢ We believe that both Torchlight and Virtual Production are solutions
Slide 23: Immersive creation experience
* Game engines are also used to provide creators with an immersive creation experience. * This system enables creators to create and edit while virtually overlaying 3D content into the physical space. In this way, we are expanding the creative space for creators. 23
Slide 24: Sports athlete tracking to 3D animation
a * =. Additionally, in the “live” entertainment of sports, we are working to expand the fan base by tracking the movements of real-life athletes and converting those movements into 3D animation using a game engine. Currently, this technology is being used for games of the NFL, professional football
Slide 25: AI supports creativity
* Game engines are a real-time computing technology. Al, which has recently evolved significantly, has been used for creation. Al can also be considered a computing technology. « Alis not a substitute for human creativity. We position it as a technology that supports creativity. * Creativity resides
Slide 26: Kando Trip
KANDO TRIP * Creativity develops communities. ¢ Weare also working to create spaces where creator communities can gather and interact, as well as to nurture the next generation of creators, and we intend to continue to promote activities that contribute to communities as a Group. 26
Slide 27: Strengthening creation efforts
* Over the past six years, the Sony Group has been working to strengthen creation efforts. 27
Slide 28: Creation
E CREATION We also would like to continue to value the “real-time” concept of the “moment”, which | mentioned today. In addition to real-time technology, the Sony Group has another strength. 28
Slide 29: Diversity of people and businesses
« tis the diversity of its people and businesses. * From here, Totoki will talk about our mid- to long-term efforts to enhance our diversity. 29
Slide 30: Hiroki Totoki, President, COO and CFO
. __.. ———=_=_£_ Hiroki Totoki President, COO and CFO LE Sony Group Corporation a a a — e _|_ zz | CC * Hello. I'm Totoki. * In our recent earnings announcement, we presented our fifth Mid-Range Plan, covering the next three fiscal years starting from the fiscal year ending March 31, 2025. 30
Slide 31: 5th Mid-Range Plan Theme
5th Mid-Range Plan Theme Beyond the boundaries Maximize synergies across the Group ¢« The theme of this Mid-Range Plan is "Beyond the boundaries: Maximize synergies across the Group.” 31
Slide 32: Maximizing IP value
UNCHARTED a AA Thies Cae. ¢ The IP that we have created and acquired until now continues to increase in value as opportunities for its use in areas such as distribution platforms and various facilities expand, and we intend to maintain our focus on maximizing the value of our IP going forward. 32
Slide 33: Sony's vision for the future
e Today, | would like to explain Sony's vision for the future beyond our current Mid-Range Plan, and the initiatives we are currently implementing to realize this vision. Specifically, | would like to talk about the three points you see here. 33
Slide 34: Creative Entertainment Vision
¢ First of all, | would like to talk about our “Creative Entertainment Vision.” ¢ Based around our Purpose as a pillar, | wanted to plot out concrete, visualizable goals, together with a more specific timeframe, so for more than two years | engaged in discussions with our diverse colleagues across t
Slide 35: Creativity Unleashed, Boundaries Transcended, Narratives Everywhere
Creativity Unleashed i f Narratives Everywhere FF Transcend dimensions to Transcend boundaries to connect Expand exciting experiences rich «unleash the creativity of diverse people and values and in narrative beyond imagination creators around the world foster communities)» and across the world iP '
Slide 36: Creative Entertainment Vision
Creative Entertainment Vision • • • • 36
Slide 37: Towards Long-term Vision
wards Long-term Vision jes beyond the Boundaries ¢ Next, | will outline the initiatives that are advancing us towards the direction outlined in this long-term vision. 37
Slide 38: IP creation, cultivation and IP360
Pictures Gaming IP Avy Pad a , 2 Peston A ge Creation rate} incite IP Cultivation IP 360 ¢ Sony is already creating compelling IP in a variety of entertainment categories, and cultivates this IP by inspiring and energizing communities together with fans, creators, and partners. « Furthermore, throug
Slide 39: Japanese anime IP creation
e e First, we are working to promote IP creation in Japanese anime, which is one of our focus areas. Aniplex produces many high-quality works every year that are beloved by anime fans around the world. Additionally, Crunchyroll, which has over 13 million paid subscribers, delivers anime created in J
Slide 40: Anime Production Software
e Anime Production Software AnimeCanvas CLOVER WORKS Sony!Viusic SONY However, with significant growth in anime’s popularity, the demand for new productions is increasing, and we are working to improve the production environment, efficiency, and quality of our output. A-1 Pictures and CloverWorks, p
Slide 41: Anime creator academy
A w\Pclel x’ @ crunchyroll Furthermore, we are now exploring the launch of a project to establish an academy with the aim of nurturing anime creators in global markets. Aniplex and Crunchyroll are core to this initiative, with collaboration from across the industry. 41
Slide 42: Crunchyroll Anime Awards
ANIME AWARDS One example of how we are fostering anime IP and culture together with fans is the Crunchyroll Anime Awards. This year marks the eighth time the event has been held, with a record number of over 34 million votes cast. With it also being very positively received by the anime industry as
Slide 43: IP creation in pictures with Unreal Engine
Next, | would like to talk about our efforts to promote IP creation in pictures. As Mr. Yoshida explained, Epic Games’ Unreal Engine has increasingly been adopted to enhance the production efficiency and quality of film and TV content, due to its real- time rendering capabilities. Examples of its us
Slide 44: Game IP adaptation and LBE
Live Action Adaptation of Game IP Expanding Game IP into the Area of LBE J PRESLE A Por s Aes iversal Studi EL ENIGMA DE PENITENCE HALLOWEEN HORROR NIGHTS ee THE vom | LAST 2 DESCUBRELO A PARTIR DE JUNIO ¢ Another ways we are developing IP in our game business, is through television and film adaptat
Slide 45: New IP creation in music
Unit Turning Novels into Music Fandom Artists | eee | ’ | lien \ ; hs ae Alleae WL Pak w 4 Mad ¢ In music, we are taking a unique approach to creating new IP. * Born from a project to turn novels into music, YOASOBI's momentum shows no signs of slowing. Their song “Idol" became the first Japanese so
Slide 46: Biographical Works of Music Artists
e e Biographical Works of Music Artists LIL N In terms of IP360 initiatives in music, our production of biographical works focusing on artists is a prominent example. For instance, through the documentary “Lil Nas X: Long Live Montero,” which chronicles Grammy Award-winning rapper, singer and songwr
Slide 47: Sports community engagement
We are also accelerating our efforts to elevate community engagement in the area of sports. Using Hawk-Eye Innovations’ tracking system to capture data such as the players’ in-game skeletal information and converting it into 3D animation in real time using Beyond Sports’ technology, we are providing
Slide 48: IP Extension
IP 360 Extension Until now, | have introduced our current activities to maximize IP value in each category. In terms of our cross- category initiatives on the other hand, we are focusing on areas such as LBE and merchandising, where we can provide opportunities for fans to engage in physical interac
Slide 49: LBE Market Size Outlook
LBE Market Size Outlook Approx. 100 USD Billion 2019-2030 | 2019-2030 CAGR CY 2015 cy 2019 CY 2023 CY 2030 ¢ LBE is alarge market where we expect to see continued growth, including in developed countries. ¢ At Sony we are already deploying our IP in locations around the world and aim to grow this bu
Slide 50: Merchandising
Merchandising Initiatives of Merchandising & Brand Collaboration Merchandising Market Size Outlook on Anime Approx. te 0 CAGR to Billion 9% TI} Guasrpusrers « DESTINY ¥2 CY 2023 CY 2030 ¢ Merchandising not only increases fans' emotional attachment to an IP, but can also contribute to acquiring new f
Slide 51: Mobility space entertainment
In the mobility space, we are utilizing entertainment content provided by understanding the vehicle’s occupants and surrounding environment through sensing data and vehicle data, together with audio technology to transform the vehicle interior into a personalized entertainment space, enhancing the v
Slide 52: Co-Development of Games for Partner IP
Co-Development of Games for Partner IP High Quality 3D Scan Solution ; \ Otc Siveet Fightin Mote Ganie™ So far, | have focused on measures to grow our own IP, but just as we have delivered IP from our partner companies to the world through brands such as PlayStation, our “|P360” initiative is not re
Slide 53: Unearth and Support Creators in Emerging Markets
Unearth and Support Creators in Emerging Markets REQUTTAL eB PlayStation ¢ We also intend to expand our initiatives to maximize the value of IP globally, by supporting creators with diverse cultural backgrounds and strong regional appeal. * For example, the “India Hero Project” launched by Sony Inte
Slide 54: Sony Innovation Fund: Africa
Sony @IFC l ala! ovat I O n International Fund eeeeaden WORLD BANK GROUP ¢ Additionally, the Sony Innovation Fund: Africa, which we established last year in collaboration with the International Finance Corporation, is a corporate venture capital fund that supports startup companies with the aim of d
Slide 55: Platforms Supporting IP Value Maximization
e Platforms Supporting ue Maximization The key technologies that enable creators to engage in these initiatives to maximize the value of their IP in a high-quality and efficient manner include sensing and capturing, as well as real- time 3D processing, Al technology and machine learning. | will now
Slide 56: Volumetric Capture Studio
KOBE203x | Official In terms of sensing and capturing, we can point to our Volumetric Capture Studio. Multiple cameras cover the studio from 360-degree angles, capturing images of moving people and objects and converting them into 3D data. These images can be stored as high-quality 3D assets, includ
Slide 57: Real-time 3D processing with Epic Games
With regards to real-time 3D processing, we are accelerating our collaboration with Epic Games centered around Unreal Engine, and are also conducting various exploratory activities. For example, the 3D CG used in the background of a music video from Iniko of Columbia Records, which is shot with virt
Slide 58: Unreal Engine proof-of-concept short film
», (il io 0 025 0:4 Gy & Outliner x bp art. x ‘ocus Selection 4,61x5,50x0,77 km © © m All > Conten ysters > Se Keyshot > shots Hf Settings fi OutputLog [=)Cmd v Source Control Off ¢ Wealso released a proof-of-concept CG short film using Unreal Engine where an actor performed as the Stay-Puft Marshma
Slide 59: ML Technology
ML Technology Automatically Synchronized e Subtitles Furthermore, we used machine learning in "Marvel's Spider- Man 2," which was released last year. Through the application of voice recognition software originally specialized for gaming, for certain languages we were able to automatically synchroni
Slide 60: AI/ML for dubbing and translation
Original Sound Al / ML Technology Shortening Translation / Dubbing Process feet Slee Sener Aret Huw Hindi Bengali Telugu Marathi Tamil ¢ Weare also conducting research and development in India using Al technology and machine learning, a multilingual society, into ways we can shorten the dubbing and
Slide 61: PlayStation Network
PlayStation Network Total Data Volume of Content Downloads Payment Methods : 2 ) 1 Currencies 3 7 100% Service Availability Record Highest “ A” Countries - Regions e In order to efficiently maximize the value of IP, we believe it is also important to develop a shared Group network to support these e
Slide 62: Deployment of DTC Service Core Functions
Deployment of DTC Service Core Functions PlayStation. Network e By extending core functions based on this network infrastructure, such as accounts, payments, data infrastructure and security, to the growing Crunchyroll service, we plan to develop it into an engagement platform for the Sony Group. 62
Slide 63: Engagement Platform
e Engagement Platform Supporting Number of Accounts Sony DTC Services (excl. PlayStation Network) 34 Services Million Going forward, we intend to commonize IDs for services across the Sony Group, including ICCOMOTTO operated by Sony Music Entertainment (Japan), which enables the use of various servi
Slide 64: Third-party Fan Engagement Services
Third-party Fan Engagement Services New Sony Services Furthermore, we intend to use this engagement platform to support the development of new network services across the Group in areas such as mobility and LBE, thereby providing convenience while also accumulating knowledge regarding the interests
Slide 65: People Diversity through M&A in Entertainment Businesses
People Diversity through M&A in Entertainment Businesses FY2013~2023 Approx. 4/ 5,000 Companies Joined People Joined AWAL BUNGIE PPR vroworr INSOMNIAC » e PO som livre As | stated at this Meeting last year, for Sony to achieve further growth and create value over the long-term, we must also continue
Slide 66: Ratio of Foreign Executives and Female Managers
Ratio of Foreign Executives (sGc) Ratio of Female Managers (Sony Group) ¢ And in terms of diversity of backgrounds, we are increasing our ratio of foreign nationals in executive positions and women in management positions year by year. 66
Slide 67: Growth Through Diverse Connections
GROWTH Through Diverse Connections BREIEMYICLORE N an = ¢ As outlined in our “Creative Entertainment Vision,” Sony aims to unleash the creativity of creators and realize a world where limitless Kando can be generated. Towards this future, we plan to work together with creators, fans, and our partner
Slide 68: Cautionary Statement
Cautionary Statement Statements made in this presentation with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not li