SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of FEBRUARY 2023
Commission File Number: 001-06439

SONY GROUP CORPORATION
(Translation of registrant's name into English)

1-7-1 KONAN, MINATO-KU, TOKYO, 108-0075, JAPAN
(Address of principal executive offices)

The registrant files annual reports under cover of Form 20-F.

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F,
 
Form 20-F  X
Form 40-F __
 
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, Yes No X
 
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-______
 
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
SONY GROUP CORPORATION
 
(Registrant)
   
   
 
By:  /s/  Hiroki Totoki
 
                (Signature)
 
Hiroki Totoki
 
Executive Deputy President and
 
Chief Financial Officer
 
Date: February 2, 2023

List of materials

Documents attached hereto:
 
i) Press release: Quarterly Financial Statements for the Third Quarter Ended December 31, 2022 And Outlook for the Fiscal Year Ending March 31, 2023

Quarterly Financial Statements
for the Third Quarter Ended December 31, 2022
And
Outlook for the Fiscal Year Ending March 31, 2023

February 2, 2023
Sony Group Corporation


Quarterly Financial Statements (Unaudited)
F-1
   
Condensed Consolidated Statements of Financial Position
F-1
Condensed Consolidated Statements of Income (Three months ended December 31)
F-3
Condensed Consolidated Statements of Comprehensive Income (Three months ended December 31)
F-4
Condensed Consolidated Statements of Income (Nine months ended December 31)
F-5
Condensed Consolidated Statements of Comprehensive Income (Nine months ended December 31)
F-6
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Nine months ended December 31)
F-7
Condensed Consolidated Statements of Cash Flows (Nine months ended December 31)
F-8
Notes to Condensed Consolidated Financial Statements
F-10
-      Business Segment Information
F-10
-      Going Concern Assumption
F-20
-      Accounting Policy and Other Information
F-20


   
Outlook for the Fiscal Year Ending March 31, 2023
1
   
Cautionary Statement
4

All financial information is presented on the basis of International Financial Reporting Standards (“IFRS”).
Sony Group Corporation and its consolidated subsidiaries are together referred to as “Sony” or “Sony Group”.

(Unaudited)
Condensed Consolidated Financial Statements
Condensed Consolidated Statements of Financial Position

   
Yen in millions
  
   
March 31,
2022
    
December 31,
2022
    
Change from
March 31, 2022
  
ASSETS
                  
Current assets:
                  
Cash and cash equivalents
    
2,049,636
      
1,287,980
      
(761,656
)
Investments and advances in the Financial Services segment
    
360,673
      
323,390
      
(37,283
)
Trade and other receivables, and contract assets
    
1,628,521
      
1,978,985
      
350,464
  
Inventories
    
874,007
      
1,464,515
      
590,508
  
Other financial assets
    
149,301
      
144,626
      
(4,675
)
Other current assets
    
473,070
      
566,819
      
93,749
  
  Total current assets
    
5,535,208
      
5,766,315
      
231,107
  
Non-current assets:
                        
Investments accounted for using the equity method
    
268,513
      
317,405
      
48,892
  
Investments and advances in the Financial Services segment
    
18,445,088
      
17,504,209
      
(940,879
)
Property, plant and equipment
    
1,113,213
      
1,280,372
      
167,159
  
Right-of-use assets
    
413,430
      
429,392
      
15,962
  
Goodwill
    
952,895
      
1,267,100
      
314,205
  
Content assets
    
1,342,046
      
1,565,222
      
223,176
  
Other intangible assets
    
450,103
      
556,210
      
106,107
  
Deferred insurance acquisition costs
    
676,526
      
690,374
      
13,848
  
Deferred tax assets
    
298,589
      
338,882
      
40,293
  
Other financial assets
    
696,306
      
849,047
      
152,741
  
Other non-current assets
    
289,050
      
307,962
      
18,912
  
  Total non-current assets
    
24,945,759
      
25,106,175
      
160,416
  
Total assets
    
30,480,967
      
30,872,490
      
391,523
  
(Continued on the following page.)

F-1
Condensed Consolidated Statements of Financial Position (Continued)

   
Yen in millions
  
   
March 31,
2022
    
December 31,
2022
    
Change from
March 31, 2022
  
LIABILITIES
                  
Current liabilities:
                  
Short-term borrowings
    
1,976,553
      
2,092,624
      
116,071
  
Current portion of long-term debt
    
171,409
      
193,414
      
22,005
  
Trade and other payables
    
1,843,242
      
2,024,291
      
181,049
  
Deposits from customers in the banking business
    
2,886,361
      
3,071,144
      
184,783
  
Income taxes payables
    
106,092
      
176,730
      
70,638
  
Participation and residual liabilities in the Pictures segment
    
190,162
      
215,503
      
25,341
  
Other financial liabilities
    
97,843
      
82,497
      
(15,346
)
Other current liabilities
    
1,488,488
      
1,640,632
      
152,144
  
  Total current liabilities
    
8,760,150
      
9,496,835
      
736,685
  
Non-current liabilities:
                        
Long-term debt
    
1,203,646
      
1,514,355
      
310,709
  
Defined benefit liabilities
    
254,548
      
249,437
      
(5,111
)
Deferred tax liabilities
    
696,492
      
170,680
      
(525,812
)
Future insurance policy benefits and other
    
7,039,034
      
7,191,165
      
152,131
  
Policyholders’ account in the life insurance business
    
4,791,295
      
4,907,618
      
116,323
  
Participation and residual liabilities in the Pictures segment
    
220,113
      
205,579
      
(14,534
)
Other financial liabilities
    
211,959
      
339,652
      
127,693
  
Other non-current liabilities
    
106,481
      
123,394
      
16,913
  
  Total non-current liabilities
    
14,523,568
      
14,701,880
      
178,312
  
Total liabilities
    
23,283,718
      
24,198,715
      
914,997
  
EQUITY
                        
Sony Group Corporation’s stockholders’ equity:
                        
Common stock
    
880,365
      
880,365
      
–
  
Additional paid-in capital
    
1,461,053
      
1,458,208
      
(2,845
)
Retained earnings
    
3,760,763
      
4,468,327
      
707,564
  
Accumulated other comprehensive income
    
1,222,332
      
30,078
      
(1,192,254
)
Treasury stock, at cost
    
(180,042
)
    
(220,260
)
    
(40,218
)
Equity attributable to Sony Group Corporation’s stockholders
    
7,144,471
      
6,616,718
      
(527,753
)
Noncontrolling interests
    
52,778
      
57,057
      
4,279
  
Total equity
    
7,197,249
      
6,673,775
      
(523,474
)
Total liabilities and equity
    
30,480,967
      
30,872,490
      
391,523
  

F-2
Condensed Consolidated Statements of Income

   
Yen in millions
  
   
Three months ended December 31
  
   
2021
    
2022
    
Change
  
Sales and financial services revenue:
                  
Sales
    
2,562,227
      
3,056,183
      
493,956
  
Financial services revenue
    
469,092
      
356,731
      
(112,361
)
Total sales and financial services revenue
    
3,031,319
      
3,412,914
      
381,595
  
Costs and expenses:
                        
Cost of sales
    
1,787,301
      
2,161,904
      
374,603
  
Selling, general and administrative
    
423,509
      
529,188
      
105,679
  
Financial services expenses
    
433,761
      
301,924
      
(131,837
)
Other operating (income) expense, net
    
(70,960
)
    
(1,484
)
    
69,476
  
Total costs and expenses
    
2,573,611
      
2,991,532
      
417,921
  
Share of profit (loss) of investments accounted for using the equity method
    
7,475
      
7,355
      
(120
)
Operating income
    
465,183
      
428,737
      
(36,446
)
Financial income
    
4,962
      
6,943
      
1,981
  
Financial expenses
    
8,576
      
37,101
      
28,525
  
Income before income taxes
    
461,569
      
398,579
      
(62,990
)
Income taxes
    
113,645
      
70,073
      
(43,572
)
Net income
    
347,924
      
328,506
      
(19,418
)
                         
Net income attributable to
                        
Sony Group Corporation’s stockholders
    
346,161
      
326,809
      
(19,352
)
Noncontrolling interests
    
1,763
      
1,697
      
(66
)

   
Yen
  
   
Three months ended December 31
  
   
2021
    
2022
    
Change
  
Per share data:
                  
  Net income attributable to Sony Group Corporation’s stockholders
                  
  - Basic
    
279.23
      
264.56
      
(14.67
)
  - Diluted
    
276.65
      
263.89
      
(12.76
)

F-3
Condensed Consolidated Statements of Comprehensive Income

   
Yen in millions
  
   
Three months ended December 31
  
   
2021
    
2022
    
Change
  
  Net income
    
347,924
      
328,506
      
(19,418
)
  Other comprehensive income, net of tax -
                        
  Items that will not be reclassified to profit or loss
                        
Changes in equity instruments measured at fair value through other comprehensive income
    
(40,247
)
    
5,988
      
46,235
  
Remeasurement of defined benefit pension plans
    
1,870
      
10
      
(1,860
)
Share of other comprehensive income of investments accounted for using the equity method
    
395
      
(141
)
    
(536
)
  Items that may be reclassified subsequently to profit or loss
                        
Changes in debt instruments measured at fair value through other comprehensive income
    
23,242
      
(316,021
)
    
(339,263
)
Cash flow hedges
    
671
      
10,128
      
9,457
  
Insurance contract valuation adjustments
    
21
      
685
      
664
  
Exchange differences on translating foreign operations
    
54,388
      
(223,403
)
    
(277,791
)
Share of other comprehensive income of investments accounted for using the equity method
    
338
      
(1,649
)
    
(1,987
)
  Total other comprehensive income, net of tax
    
40,678
      
(524,403
)
    
(565,081
)
  Comprehensive income
    
388,602
      
(195,897
)
    
(584,499
)
                         
  Comprehensive income attributable to
                        
  Sony Group Corporation’s stockholders
    
385,770
      
(194,860
)
    
(580,630
)
  Noncontrolling interests
    
2,832
      
(1,037
)
    
(3,869
)

F-4
Condensed Consolidated Statements of Income

   
Yen in millions
  
   
Nine months ended December 31
  
   
2021
    
2022
    
Change
  
Sales and financial services revenue:
                  
Sales
    
6,410,143
      
7,523,263
      
1,113,120
  
Financial services revenue
    
1,247,384
      
953,024
      
(294,360
)
Total sales and financial services revenue
    
7,657,527
      
8,476,287
      
818,760
  
Costs and expenses:
                        
Cost of sales
    
4,401,169
      
5,241,857
      
840,688
  
Selling, general and administrative
    
1,138,719
      
1,418,411
      
279,692
  
Financial services expenses
    
1,144,840
      
767,117
      
(377,723
)
Other operating (income) expense, net
    
(70,847
)
    
(12,278
)
    
58,569
  
Total costs and expenses
    
6,613,881
      
7,415,107
      
801,226
  
Share of profit (loss) of investments accounted for using the equity method
    
20,064
      
18,562
      
(1,502
)
Operating income
    
1,063,710
      
1,079,742
      
16,032
  
Financial income
    
14,989
      
19,862
      
4,873
  
Financial expenses
    
50,821
      
63,893
      
13,072
  
Income before income taxes
    
1,027,878
      
1,035,711
      
7,833
  
Income taxes
    
252,443
      
221,228
      
(31,215
)
Net income
    
775,435
      
814,483
      
39,048
  
                         
Net income attributable to
                        
Sony Group Corporation’s stockholders
    
771,096
      
808,968
      
37,872
  
Noncontrolling interests
    
4,339
      
5,515
      
1,176
  

   
Yen
  
   
Nine months ended December 31
  
   
2021
    
2022
    
Change
  
Per share data:
                  
  Net income attributable to Sony Group Corporation’s stockholders
                  
  - Basic
    
622.03
      
654.41
      
32.38
  
  - Diluted
    
616.00
      
651.11
      
35.11
  

F-5
Condensed Consolidated Statements of Comprehensive Income

   
Yen in millions
  
   
Nine months ended December 31
  
   
2021
    
2022
    
Change
  
  Net income
    
775,435
      
814,483
      
39,048
  
  Other comprehensive income, net of tax -
                        
  Items that will not be reclassified to profit or loss
                        
Changes in equity instruments measured at fair value through other comprehensive income
    
(70,656
)
    
(9,520
)
    
61,136
  
Remeasurement of defined benefit pension plans
    
118
      
39
      
(79
)
Share of other comprehensive income of investments accounted for using the equity method
    
341
      
131
      
(210
)
  Items that may be reclassified subsequently to profit or loss
                        
Changes in debt instruments measured at fair value through other comprehensive income
    
65,773
      
(1,343,733
)
    
(1,409,506
)
Cash flow hedges
    
1,598
      
17,719
      
16,121
  
Insurance contract valuation adjustments
    
157
      
1,624
      
1,467
  
Exchange differences on translating foreign operations
    
69,019
      
140,581
      
71,562
  
Share of other comprehensive income of investments accounted for using the equity method
    
355
      
2,792
      
2,437
  
  Total other comprehensive income, net of tax
    
66,705
      
(1,190,367
)
    
(1,257,072
)
  Comprehensive income
    
842,140
      
(375,884
)
    
(1,218,024
)
                         
  Comprehensive income attributable to
                        
  Sony Group Corporation’s stockholders
    
836,770
      
(383,338
)
    
(1,220,108
)
  Noncontrolling interests
    
5,370
      
7,454
      
2,084
  

F-6
Condensed Consolidated Statements of Changes in Stockholders’ Equity

   
Yen in millions
  
   
Common
stock
    
Additional
paid-in
capital
    
Retained
earnings
    
Accumulated
other
comprehensive
income
    
Treasury
stock, at
cost
    
Sony Group
Corporation’s
stockholders’
equity
    
Noncontrolling
interests
    
Total equity
  
Balance at April 1, 2021
    
880,214
    
1,489,597
    
2,914,503
    
1,520,257
    
(124,228
)
  
6,680,343
    
43,996
    
6,724,339
  
Comprehensive income:
                                                  
Net income
                
771,096
                
771,096
    
4,339
    
775,435
  
Other comprehensive income, net of tax
                      
65,674
          
65,674
    
1,031
    
66,705
  
Total comprehensive income
                
771,096
    
65,674
          
836,770
    
5,370
    
842,140
  
Transfer to retained earnings
                
6,187
    
(6,187
)
        
–
          
–
  
Transactions with stockholders and other:
                                                  
Issuance of new shares
    
151
    
151
                      
302
          
302
  
Exercise of stock acquisition rights
          
479
                
9,141
    
9,620
          
9,620
  
Conversion of convertible bonds
          
(2,672
)
  
(521
)
        
16,439
    
13,246
          
13,246
  
Stock-based compensation
          
3,858
                      
3,858
          
3,858
  
Dividends declared
                
(74,385
)
              
(74,385
)
  
(2,646
)
  
(77,031
)
Purchase of treasury stock
                            
(50,498
)
  
(50,498
)
        
(50,498
)
Reissuance of treasury stock
          
1,543
                
1,747
    
3,290
          
3,290
  
Transactions with noncontrolling interests shareholders and other
          
(36,377
)
                    
(36,377
)
  
4,060
    
(32,317
)
Balance at December 31, 2021
    
880,365
    
1,456,579
    
3,616,880
    
1,579,744
    
(147,399
)
  
7,386,169
    
50,780
    
7,436,949
  

   
Yen in millions
  
   
Common
stock
    
Additional
paid-in
capital
    
Retained
earnings
    
Accumulated
other
comprehensive
income
    
Treasury
stock, at
cost
    
Sony Group
Corporation’s
stockholders’
equity
    
Noncontrolling
interests
    
Total equity
  
Balance at April 1, 2022
    
880,365
    
1,461,053
    
3,760,763
    
1,222,332
    
(180,042
)
  
7,144,471
    
52,778
    
7,197,249
  
Comprehensive income:
                                                  
Net income
                
808,968
                
808,968
    
5,515
    
814,483
  
Other comprehensive income, net of tax
                      
(1,192,306
)
        
(1,192,306
)
  
1,939
    
(1,190,367
)
Total comprehensive income
                
808,968
    
(1,192,306
)
        
(383,338
)
  
7,454
    
(375,884
)
Transfer to retained earnings
                
(52
)
  
52
          
–
          
–
  
Transactions with stockholders and other:
                                                  
Exercise of stock acquisition rights
          
(6
)
  
(859
)
        
5,696
    
4,831
          
4,831
  
Conversion of convertible bonds
          
(2,588
)
  
(13,858
)
        
42,993
    
26,547
          
26,547
  
Stock-based compensation
          
7,413
                      
7,413
          
7,413
  
Dividends declared
                
(86,635
)
              
(86,635
)
  
(5,470
)
  
(92,105
)
Purchase of treasury stock
                            
(91,307
)
  
(91,307
)
        
(91,307
)
Reissuance of treasury stock
          
1,234
                
2,400
    
3,634
          
3,634
  
Transactions with noncontrolling interests shareholders and other
          
(8,898
)
                    
(8,898
)
  
2,295
    
(6,603
)
Balance at December 31, 2022
    
880,365
    
1,458,208
    
4,468,327
    
30,078
    
(220,260
)
  
6,616,718
    
57,057
    
6,673,775
  

F-7
Condensed Consolidated Statements of Cash Flows

   
Yen in millions
  
   
Nine months ended December 31
  
   
2021
    
2022
  
Cash flows from operating activities:
            
  Income before income taxes
    
1,027,878
      
1,035,711
  
  Adjustments to reconcile income before income taxes to net cash provided by (used in) operating activities:
                
  Depreciation and amortization, including amortization of contract costs
    
620,115
      
735,642
  
  Amortization of deferred insurance acquisition costs
    
46,605
      
82,169
  
  Other operating (income) expense, net
    
(70,847
)
    
(12,278
)
  Loss on securities, net (other than Financial Services segment)
    
23,606
      
27,154
  
  Share of profit of investments accounted for using the equity method, net of dividends
    
(11,588
)
    
(12,166
)
  Change in future insurance policy benefits and other
    
300,632
      
156,149
  
  Change in policyholders’ account in the life insurance business, less cash impact
    
291,078
      
(148,264
)
  Net cash impact of policyholders’ account in the life insurance business
    
153,714
      
263,986
  
  Changes in assets and liabilities:
                
Increase in trade receivables and contract assets
    
(428,153
)
    
(283,431
)
Increase in inventories
    
(134,997
)
    
(572,541
)
Increase in investments and advances in the Financial Services segment
    
(1,145,193
)
    
(908,293
)
Increase in content assets
    
(407,502
)
    
(485,450
)
Increase in deferred insurance acquisition costs
    
(83,383
)
    
(88,976
)
Increase in trade payables
    
140,852
      
62,428
  
Increase in deposits from customers in the banking business
    
164,387
      
194,976
  
Increase in borrowings in the life insurance business and the banking business
    
478,305
      
100,670
  
Decrease in taxes payable other than income taxes, net
    
(13,837
)
    
(34,912
)
(Increase) decrease in other financial assets and other current assets
    
13,599
      
(36,093
)
Increase in other financial liabilities and other current liabilities
    
9,571
      
95,185
  
  Income taxes paid
    
(154,491
)
    
(183,097
)
  Other
    
(11,750
)
    
(70,192
)
  Net cash provided by (used in) operating activities
    
808,601
      
(81,623
)
(Continued on the following page.)

F-8
Condensed Consolidated Statements of Cash Flows (Continued)

   
Yen in millions
  
   
Nine months ended December 31
  
   
2021
    
2022
  
  Cash flows from investing activities:
            
Payments for property, plant and equipment and other intangible assets
    
(338,553
)
    
(434,748
)
Proceeds from sales of property, plant and equipment and other intangible assets
    
8,038
      
9,474
  
Payments for investments and advances (other than Financial Services segment)
    
(63,201
)
    
(185,577
)
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)
    
23,033
      
11,740
  
Payments for purchases of businesses
    
(224,970
)
    
(280,447
)
Proceeds from sales of businesses
    
64,609
      
1,221
  
Other
    
7,820
      
20,814
  
Net cash used in investing activities
    
(523,224
)
    
(857,523
)
  Cash flows from financing activities:
                
Increase in short-term borrowings, net
    
1,381
      
27,765
  
Proceeds from issuance of long-term debt
    
18,370
      
348,565
  
Payments of long-term debt
    
(161,721
)
    
(106,328
)
Dividends paid
    
(74,208
)
    
(86,383
)
Payments for purchases of treasury stock
    
(50,498
)
    
(91,307
)
Other
    
(12,019
)
    
7,036
  
Net cash provided by (used in) financing activities
    
(278,695
)
    
99,348
  
  Effect of exchange rate changes on cash and cash equivalents
    
28,914
      
78,142
  
  Net increase (decrease) in cash and cash equivalents
    
35,596
      
(761,656
)
  Cash and cash equivalents at beginning of the fiscal year
    
1,786,982
      
2,049,636
  
  Cash and cash equivalents at end of the period
    
1,822,578
      
1,287,980
  

F-9
Notes to Condensed Consolidated Financial Statements
Business Segment Information
(Business Segments)
Segment sales and financial services revenue

   
Yen in millions
  
   
Three months ended December 31
  
   
2021
    
2022
    
Change
  
Sales and financial services revenue:
                  
Game & Network Services -
                  
Customers
    
796,734
      
1,211,617
      
414,883
  
Intersegment
    
16,530
      
34,932
      
18,402
  
Total
    
813,264
      
1,246,549
      
433,285
  
Music -
                        
Customers
    
292,371
      
360,643
      
68,272
  
Intersegment
    
3,502
      
3,104
      
(398
)
Total
    
295,873
      
363,747
      
67,874
  
Pictures -
                        
Customers
    
460,314
      
330,925
      
(129,389
)
Intersegment
    
920
      
612
      
(308
)
Total
    
461,234
      
331,537
      
(129,697
)
Entertainment, Technology & Services -
                        
Customers
    
679,595
      
742,480
      
62,885
  
Intersegment
    
7,351
      
10,343
      
2,992
  
Total
    
686,946
      
752,823
      
65,877
  
Imaging & Sensing Solutions -
                        
Customers
    
305,885
      
386,400
      
80,515
  
Intersegment
    
18,928
      
30,751
      
11,823
  
Total
    
324,813
      
417,151
      
92,338
  
Financial Services -
                        
Customers
    
469,092
      
356,731
      
(112,361
)
Intersegment
    
2,254
      
2,301
      
47
  
Total
    
471,346
      
359,032
      
(112,314
)
All Other -
                        
Customers
    
23,387
      
19,648
      
(3,739
)
Intersegment
    
4,041
      
5,412
      
1,371
  
Total
    
27,428
      
25,060
      
(2,368
)
Corporate and elimination
    
(49,585
)
    
(82,985
)
    
(33,400
)
Consolidated total
    
3,031,319
      
3,412,914
      
381,595
  

　　Game & Network Services (“G&NS”) intersegment amounts primarily consist of transactions with the Entertainment, Technology & Services (“ET&S”) segment. ET&S intersegment amounts primarily consist of transactions with the G&NS segment. Imaging & Sensing Solutions (“I&SS”) intersegment amounts primarily consist of transactions with the G&NS segment and the ET&S segment. Corporate and elimination includes certain brand and patent royalty income.

F-10
Segment profit (loss)

   
Yen in millions
  
   
Three months ended December 31
  
   
2021
    
2022
    
Change
  
Operating income (loss):
                  
Game & Network Services
    
92,896
      
116,248
      
23,352
  
Music
    
55,113
      
62,961
      
7,848
  
Pictures
    
149,372
      
25,445
      
(123,927
)
Entertainment, Technology & Services
    
80,036
      
81,094
      
1,058
  
Imaging & Sensing Solutions
    
64,650
      
84,851
      
20,201
  
Financial Services
    
35,208
      
54,263
      
19,055
  
All Other
    
8,178
      
9,062
      
884
  
Total
    
485,453
      
433,924
      
(51,529
)
Corporate and elimination
    
(20,270
)
    
(5,187
)
    
15,083
  
Consolidated operating income
    
465,183
      
428,737
      
(36,446
)

　　Operating income (loss) is sales and financial services revenue less costs and expenses, and includes the share of profit (loss) of investments accounted for using the equity method.

　　The former Electronics Products & Solutions (“EP&S”) segment has been renamed the ET&S segment effective from April 2022. This change has not resulted in any reclassification of businesses across segments.

F-11
(Business Segments)
Segment sales and financial services revenue

   
Yen in millions
  
   
Nine months ended December 31
  
   
2021
    
2022
    
Change
  
Sales and financial services revenue:
                  
Game & Network Services -
                  
Customers
    
2,027,428
      
2,502,796
      
475,368
  
Intersegment
    
47,085
      
68,604
      
21,519
  
Total
    
2,074,513
      
2,571,400
      
496,887
  
Music -
                        
Customers
    
813,136
      
1,022,924
      
209,788
  
Intersegment
    
9,220
      
8,212
      
(1,008
)
Total
    
822,356
      
1,031,136
      
208,780
  
Pictures -
                        
Customers
    
925,246
      
1,007,752
      
82,506
  
Intersegment
    
1,430
      
2,630
      
1,200
  
Total
    
926,676
      
1,010,382
      
83,706
  
Entertainment, Technology & Services -
                        
Customers
    
1,814,019
      
1,953,118
      
139,099
  
Intersegment
    
31,114
      
29,060
      
(2,054
)
Total
    
1,845,133
      
1,982,178
      
137,045
  
Imaging & Sensing Solutions -
                        
Customers
    
757,929
      
975,203
      
217,274
  
Intersegment
    
63,204
      
78,156
      
14,952
  
Total
    
821,133
      
1,053,359
      
232,226
  
Financial Services -
                        
Customers
    
1,247,384
      
953,024
      
(294,360
)
Intersegment
    
6,762
      
8,242
      
1,480
  
Total
    
1,254,146
      
961,266
      
(292,880
)
All Other -
                        
Customers
    
62,678
      
52,848
      
(9,830
)
Intersegment
    
11,197
      
12,278
      
1,081
  
Total
    
73,875
      
65,126
      
(8,749
)
Corporate and elimination
    
(160,305
)
    
(198,560
)
    
(38,255
)
Consolidated total
    
7,657,527
      
8,476,287
      
818,760
  

　　G&NS intersegment amounts primarily consist of transactions with the ET&S segment. ET&S intersegment amounts primarily consist of transactions with the G&NS segment. I&SS intersegment amounts primarily consist of transactions with the G&NS segment and the ET&S segment. Corporate and elimination includes certain brand and patent royalty income.

F-12
Segment profit (loss)

   
Yen in millions
  
   
Nine months ended December 31
  
   
2021
    
2022
    
Change
  
Operating income (loss):
                  
Game & Network Services
    
258,834
      
211,142
      
(47,692
)
Music
    
161,079
      
202,667
      
41,588
  
Pictures
    
206,355
      
103,720
      
(102,635
)
Entertainment, Technology & Services
    
224,498
      
212,502
      
(11,996
)
Imaging & Sensing Solutions
    
144,854
      
180,527
      
35,673
  
Financial Services
    
102,274
      
190,197
      
87,923
  
All Other
    
20,950
      
16,775
      
(4,175
)
Total
    
1,118,844
      
1,117,530
      
(1,314
)
Corporate and elimination
    
(55,134
)
    
(37,788
)
    
17,346
  
Consolidated operating income
    
1,063,710
      
1,079,742
      
16,032
  

　　Operating income (loss) is sales and financial services revenue less costs and expenses, and includes the share of profit (loss) of investments accounted for using the equity method.

　　The former EP&S segment has been renamed the ET&S segment effective from April 2022. This change has not resulted in any reclassification of businesses across segments.

F-13
(Sales to Customers by Product Category)

　　The following table is a breakdown of sales and financial services revenue to external customers by product category for each segment. Sony management views each segment as a single operating segment.

   
Yen in millions
  
   
Three months ended December 31
  
Sales and financial services revenue:
  
2021
    
2022
    
Change
  
Game & Network Services
                  
Digital Software and Add-on Content
    
432,284
      
508,102
      
75,818
  
Network Services
    
102,501
      
122,201
      
19,700
  
Hardware and Others
    
261,949
      
581,314
      
319,365
  
Total
    
796,734
      
1,211,617
      
414,883
  
Music
                        
Recorded Music - Streaming
    
119,506
      
159,147
      
39,641
  
Recorded Music - Others
    
64,281
      
79,901
      
15,620
  
Music Publishing
    
51,902
      
74,161
      
22,259
  
Visual Media and Platform
    
56,682
      
47,434
      
(9,248
)
Total
    
292,371
      
360,643
      
68,272
  
Pictures
                        
Motion Pictures
    
191,887
      
113,087
      
(78,800
)
Television Productions
    
185,599
      
123,508
      
(62,091
)
Media Networks
    
82,828
      
94,330
      
11,502
  
Total
    
460,314
      
330,925
      
(129,389
)
Entertainment, Technology & Services
                        
Televisions
    
269,530
      
250,192
      
(19,338
)
Audio and Video
    
105,330
      
122,605
      
17,275
  
Still and Video Cameras
    
117,851
      
171,146
      
53,295
  
Mobile Communications
    
102,339
      
93,302
      
(9,037
)
Other
    
84,545
      
105,235
      
20,690
  
Total
    
679,595
      
742,480
      
62,885
  
Imaging & Sensing Solutions
    
305,885
      
386,400
      
80,515
  
Financial Services
    
469,092
      
356,731
      
(112,361
)
All Other
    
23,387
      
19,648
      
(3,739
)
Corporate
    
3,941
      
4,470
      
529
  
Consolidated total
    
3,031,319
      
3,412,914
      
381,595
  

F-14

   
Yen in millions
  
   
Nine months ended December 31
  
Sales and financial services revenue:
  
2021
    
2022
    
Change
  
Game & Network Services
                  
Digital Software and Add-on Content
    
1,067,578
      
1,126,806
      
59,228
  
Network Services
    
304,932
      
345,730
      
40,798
  
Hardware and Others
    
654,918
      
1,030,260
      
375,342
  
Total
    
2,027,428
      
2,502,796
      
475,368
  
Music
                        
Recorded Music - Streaming
    
341,911
      
450,188
      
108,277
  
Recorded Music - Others
    
150,065
      
212,387
      
62,322
  
Music Publishing
    
146,344
      
210,707
      
64,363
  
Visual Media and Platform
    
174,816
      
149,642
      
(25,174
)
Total
    
813,136
      
1,022,924
      
209,788
  
Pictures
                        
Motion Pictures
    
368,479
      
360,003
      
(8,476
)
Television Productions
    
333,885
      
377,255
      
43,370
  
Media Networks
    
222,882
      
270,494
      
47,612
  
Total
    
925,246
      
1,007,752
      
82,506
  
Entertainment, Technology & Services
                        
Televisions
    
697,730
      
618,736
      
(78,994
)
Audio and Video
    
253,686
      
313,552
      
59,866
  
Still and Video Cameras
    
339,233
      
458,711
      
119,478
  
Mobile Communications
    
282,854
      
285,559
      
2,705
  
Other
    
240,516
      
276,560
      
36,044
  
Total
    
1,814,019
      
1,953,118
      
139,099
  
Imaging & Sensing Solutions
    
757,929
      
975,203
      
217,274
  
Financial Services
    
1,247,384
      
953,024
      
(294,360
)
All Other
    
62,678
      
52,848
      
(9,830
)
Corporate
    
9,707
      
8,622
      
(1,085
)
Consolidated total
    
7,657,527
      
8,476,287
      
818,760
  

　　In the G&NS segment, Digital Software and Add-on Content includes distribution of software titles and add-on content through the network by Sony Interactive Entertainment; Network Services includes network services relating to game, video and music content; Hardware and Others includes home gaming consoles, packaged software, game software sold bundled with home gaming consoles, peripheral devices and first-party software for third-party platforms. In the Music segment, Recorded Music - Streaming includes the distribution of digital recorded music by streaming; Recorded Music - Others includes the distribution of recorded music by physical media and digital download as well as revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes the production and distribution of animation titles and game applications, and various service offerings for music and visual products. In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of live-action and animated motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks worldwide. In the ET&S segment, Televisions includes LCD and OLED televisions; Audio and Video includes Blu-ray disc players and recorders, home audio, headphones and memory-based portable audio devices; Still and Video Cameras includes interchangeable lens cameras, compact digital cameras, consumer video cameras and video cameras for broadcast; Mobile Communications includes smartphones and an internet-related service business; Other includes display products such as projectors and medical equipment.

F-15
(Condensed Financial Services Financial Statements)

　　The following schedules show unaudited condensed financial statements for the Financial Services segment and all other segments excluding Financial Services. These presentations are not in accordance with IFRS, which is used by Sony to prepare its condensed consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s condensed consolidated financial statements. Both financial statements include transactions between the Financial Services segment and Sony without the Financial Services segment. The figures shown in the respective presentations for the Financial Services segment and Sony without the Financial Services segment are prior to the elimination and/or offset of such transactions and deferred tax assets and deferred tax liabilities of each. The condensed consolidated financial statements column is presented net of the elimination and/or offset of such intercompany balances and deferred tax assets and liabilities.

Condensed Statements of Financial Position

   
Yen in millions
  
   
Financial Services
    
Sony without
Financial Services
    
Consolidated
  
   
March 31,
2022
    
December 31,
2022
    
March 31,
2022
    
December 31,
2022
    
March 31,
2022
    
December 31,
2022
  
  ASSETS
                                    
Current assets:
                                    
Cash and cash equivalents
  
¥
889,140
    
¥
592,889
    
¥
1,160,496
    
¥
695,091
    
¥
2,049,636
    
¥
1,287,980
  
Investments and advances in the Financial Services segment
    
360,673
      
323,390
      
–
      
–
      
360,673
      
323,390
  
Trade and other receivables, and contract assets
    
169,929
      
160,983
      
1,478,620
      
1,843,856
      
1,628,521
      
1,978,985
  
Inventories
    
–
      
–
      
874,007
      
1,464,515
      
874,007
      
1,464,515
  
Other financial assets
    
81,174
      
70,001
      
68,124
      
74,623
      
149,301
      
144,626
  
Other current assets
    
72,441
      
58,036
      
450,953
      
521,371
      
473,070
      
566,819
  
  Total current assets
    
1,573,357
      
1,205,299
      
4,032,200
      
4,599,456
      
5,535,208
      
5,766,315
  
Non-current assets:
                                                
Investments accounted for using the equity method
    
–
      
–
      
268,513
      
317,405
      
268,513
      
317,405
  
Investments and advances in the Financial Services segment
    
18,445,088
      
17,504,209
      
–
      
–
      
18,445,088
      
17,504,209
  
Investments in Financial Services, at cost
    
–
      
–
      
550,483
      
550,483
      
–
      
–
  
Property, plant and equipment
    
18,010
      
15,378
      
1,095,241
      
1,264,666
      
1,113,213
      
1,280,372
  
Right-of-use assets
    
73,774
      
82,488
      
339,658
      
347,287
      
413,430
      
429,392
  
Goodwill and intangible assets, including content assets
    
72,578
      
75,550
      
2,672,466
      
3,312,982
      
2,745,044
      
3,388,532
  
Deferred insurance acquisition costs
    
676,526
      
690,374
      
–
      
–
      
676,526
      
690,374
  
Deferred tax assets
    
–
      
–
      
332,330
      
380,540
      
298,589
      
338,882
  
Other financial assets
    
37,037
      
53,818
      
663,233
      
799,294
      
696,306
      
849,047
  
Other non-current assets
    
77,657
      
76,522
      
284,834
      
303,727
      
289,050
      
307,962
  
  Total non-current assets
    
19,400,670
      
18,498,339
      
6,206,758
      
7,276,384
      
24,945,759
      
25,106,175
  
  Total assets
  
¥
20,974,027
    
¥
19,703,638
    
¥
10,238,958
    
¥
11,875,840
    
¥
30,480,967
    
¥
30,872,490
  
                                                 
  LIABILITIES AND EQUITY
                                                
Current liabilities:
                                                
Short-term borrowings
  
¥
1,964,776
    
¥
2,085,721
    
¥
183,187
    
¥
200,317
    
¥
2,147,962
    
¥
2,286,038
  
Trade and other payables
    
118,921
      
71,090
      
1,744,011
      
1,978,554
      
1,843,242
      
2,024,291
  
Deposits from customers in the banking business
    
2,886,361
      
3,071,144
      
–
      
–
      
2,886,361
      
3,071,144
  
Income taxes payables
    
4,444
      
16,019
      
101,648
      
160,711
      
106,092
      
176,730
  
Participation and residual liabilities in the Pictures segment
    
–
      
–
      
190,162
      
215,503
      
190,162
      
215,503
  
Other financial liabilities
    
68,793
      
50,519
      
29,050
      
31,978
      
97,843
      
82,497
  
Other current liabilities
    
242,937
      
215,157
      
1,296,205
      
1,438,511
      
1,488,488
      
1,640,632
  
  Total current liabilities
    
5,286,232
      
5,509,650
      
3,544,263
      
4,025,574
      
8,760,150
      
9,496,835
  
Non-current liabilities:
                                                
Long-term debt
    
470,498
      
457,322
      
733,148
      
1,057,033
      
1,203,646
      
1,514,355
  
Defined benefit liabilities
    
37,167
      
38,161
      
217,381
      
211,276
      
254,548
      
249,437
  
Deferred tax liabilities
    
634,576
      
115,474
      
110,715
      
111,622
      
696,492
      
170,680
  
Future insurance policy benefits and other
    
7,039,034
      
7,191,165
      
–
      
–
      
7,039,034
      
7,191,165
  
Policyholders’ account in the life insurance business
    
4,791,295
      
4,907,618
      
–
      
–
      
4,791,295
      
4,907,618
  
Participation and residual liabilities in the Pictures segment
    
–
      
–
      
220,113
      
205,579
      
220,113
      
205,579
  
Other financial liabilities
    
128,208
      
144,319
      
86,391
      
198,088
      
211,959
      
339,652
  
Other non-current liabilities
    
5,864
      
6,735
      
121,558
      
137,464
      
106,481
      
123,394
  
  Total non-current liabilities
    
13,106,642
      
12,860,794
      
1,489,306
      
1,921,062
      
14,523,568
      
14,701,880
  
  Total liabilities
    
18,392,874
      
18,370,444
      
5,033,569
      
5,946,636
      
23,283,718
      
24,198,715
  
Equity:
                                                
Stockholders’ equity of Financial Services
    
2,577,705
      
1,329,512
      
–
      
–
      
–
      
–
  
Stockholders’ equity of Sony without Financial Services
    
–
      
–
      
5,156,059
      
5,875,829
      
–
      
–
  
Sony Group Corporation’s stockholders’ equity
    
–
      
–
      
–
      
–
      
7,144,471
      
6,616,718
  
Noncontrolling interests
    
3,448
      
3,682
      
49,330
      
53,375
      
52,778
      
57,057
  
  Total equity
    
2,581,153
      
1,333,194
      
5,205,389
      
5,929,204
      
7,197,249
      
6,673,775
  
  Total liabilities and equity
  
¥
20,974,027
    
¥
19,703,638
    
¥
10,238,958
    
¥
11,875,840
    
¥
30,480,967
    
¥
30,872,490
  

F-16
Condensed Statements of Income

   
Yen in millions
  
   
Three months ended December 31
  
   
Financial Services
    
Sony without
Financial Services
    
Consolidated
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Sales
  
¥
–
    
¥
–
    
¥
2,563,499
    
¥
3,057,441
    
¥
2,562,227
    
¥
3,056,183
  
Financial services revenue
    
471,346
      
359,032
      
–
      
–
      
469,092
      
356,731
  
Total sales and financial services revenue
    
471,346
      
359,032
      
2,563,499
      
3,057,441
      
3,031,319
      
3,412,914
  
                                                 
Cost of sales
    
–
      
–
      
1,790,131
      
2,164,926
      
1,787,301
      
2,161,904
  
Selling, general and administrative
    
–
      
–
      
421,950
      
527,428
      
423,509
      
529,188
  
Financial services expenses
    
436,016
      
304,225
      
–
      
–
      
433,761
      
301,924
  
Other operating (income) expense, net
    
122
      
544
      
(71,082
)
    
(2,027
)
    
(70,960
)
    
(1,484
)
Total costs and expenses
    
436,138
      
304,769
      
2,140,999
      
2,690,327
      
2,573,611
      
2,991,532
  
                                                 
Share of profit (loss) of investments accounted for using the equity method
    
–
      
–
      
7,475
      
7,355
      
7,475
      
7,355
  
                                                 
Operating income
    
35,208
      
54,263
      
429,975
      
374,469
      
465,183
      
428,737
  
                                                 
Financial income (expenses), net
    
–
      
–
      
(3,616
)
    
(30,159
)
    
(3,614
)
    
(30,158
)
                                                 
Income before income taxes
    
35,208
      
54,263
      
426,359
      
344,310
      
461,569
      
398,579
  
                                                 
Income taxes
    
10,095
      
15,589
      
103,547
      
54,485
      
113,645
      
70,073
  
                                                 
Net income
    
25,113
      
38,674
      
322,812
      
289,825
      
347,924
      
328,506
  
                                                 
      Net income of Financial Services
  
¥
24,980
    
¥
38,661
    
¥
–
    
¥
–
    
¥
–
    
¥
–
  
                                                 
      Net income of Sony without Financial Services
  
¥
–
    
¥
–
    
¥
321,182
    
¥
288,141
    
¥
–
    
¥
–
  
                                                 
      Net income attributable to Sony Group Corporation’s stockholders
  
¥
–
    
¥
–
    
¥
–
    
¥
–
    
¥
346,161
    
¥
326,809
  
                                                 
      Net income attributable to noncontrolling interests
  
¥
133
    
¥
13
    
¥
1,630
    
¥
1,684
    
¥
1,763
    
¥
1,697
  


F-17
Condensed Statements of Income

   
Yen in millions
  
   
Nine months ended December 31
  
   
Financial Services
    
Sony without
Financial Services
    
Consolidated
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Sales
  
¥
–
    
¥
–
    
¥
6,413,935
    
¥
7,527,631
    
¥
6,410,143
    
¥
7,523,263
  
Financial services revenue
    
1,254,146
      
961,266
      
–
      
–
      
1,247,384
      
953,024
  
Total sales and financial services revenue
    
1,254,146
      
961,266
      
6,413,935
      
7,527,631
      
7,657,527
      
8,476,287
  
                                                 
Cost of sales
    
–
      
–
      
4,409,132
      
5,250,787
      
4,401,169
      
5,241,857
  
Selling, general and administrative
    
–
      
–
      
1,134,547
      
1,412,507
      
1,138,719
      
1,418,411
  
Financial services expenses
    
1,151,603
      
775,359
      
–
      
–
      
1,144,840
      
767,117
  
Other operating (income) expense, net
    
269
      
(4,290
)
    
(71,116
)
    
(5,681
)
    
(70,847
)
    
(12,278
)
Total costs and expenses
    
1,151,872
      
771,069
      
5,472,563
      
6,657,613
      
6,613,881
      
7,415,107
  
                                                 
Share of profit (loss) of investments accounted for using the equity method
    
–
      
–
      
20,064
      
18,562
      
20,064
      
18,562
  
                                                 
Operating income
    
102,274
      
190,197
      
961,436
      
888,580
      
1,063,710
      
1,079,742
  
                                                 
Financial income (expenses), net
    
–
      
–
      
3,324
      
(2,699
)
    
(35,832
)
    
(44,031
)
                                                 
Income before income taxes
    
102,274
      
190,197
      
964,760
      
885,881
      
1,027,878
      
1,035,711
  
                                                 
Income taxes
    
26,002
      
52,643
      
226,437
      
168,287
      
252,443
      
221,228
  
                                                 
Net income
    
76,272
      
137,554
      
738,323
      
717,594
      
775,435
      
814,483
  
                                                 
      Net income of Financial Services
  
¥
75,881
    
¥
137,320
    
¥
–
    
¥
–
    
¥
–
    
¥
–
  
                                                 
      Net income of Sony without Financial Services
  
¥
–
    
¥
–
    
¥
734,375
    
¥
712,313
    
¥
–
    
¥
–
  
                                                 
      Net income attributable to Sony Group Corporation’s stockholders
  
¥
–
    
¥
-
    
¥
–
    
¥
–
    
¥
771,096
    
¥
808,968
  
                                                 
      Net income attributable to noncontrolling interests
  
¥
391
    
¥
234
    
¥
3,948
    
¥
5,281
    
¥
4,339
    
¥
5,515
  

F-18
Condensed Statements of Cash Flows

   
Yen in millions
  
   
Nine months ended December 31
  
   
Financial Services
  
Sony without
Financial Services
  
Consolidated
  
   
2021
  
2022
  
2021
  
2022
  
2021
  
2022
  
Cash flows from operating activities:
                          
Income (loss) before income taxes
  
¥
102,274
  
¥
190,197
  
¥
964,760
  
¥
885,881
  
¥
1,027,878
  
¥
1,035,711
  
Adjustments to reconcile income (loss) before income taxes to net cash provided by (used in) operating activities:
                                      
Depreciation and amortization, including amortization of contract costs
    
18,682
    
19,583
    
601,433
    
716,059
    
620,115
    
735,642
  
Amortization of deferred insurance acquisition costs
    
46,605
    
82,169
    
–
    
–
    
46,605
    
82,169
  
Other operating (income) expense, net
    
269
    
(4,290
)
  
(71,116
)
  
(5,681
)
  
(70,847
)
  
(12,278
)
(Gain) loss on securities, net (other than Financial Services segment)
    
–
    
–
    
23,606
    
27,154
    
23,606
    
27,154
  
Change in future insurance policy benefits and other
    
300,632
    
156,149
    
–
    
–
    
300,632
    
156,149
  
Change in policyholders’ account in the life insurance business, less cash impact
    
291,078
    
(148,264
)
  
–
    
–
    
291,078
    
(148,264
)
Net cash impact of policyholders’ account in the life insurance business
    
153,714
    
263,986
    
–
    
–
    
153,714
    
263,986
  
Changes in assets and liabilities:
                                      
(Increase) decrease in trade receivables and contract assets
    
(35,697
)
  
8,946
    
(398,020
)
  
(298,206
)
  
(428,153
)
  
(283,431
)
(Increase) decrease in inventories
    
–
    
–
    
(134,997
)
  
(572,541
)
  
(134,997
)
  
(572,541
)
(Increase) decrease in investments and advances in the Financial Services segment
    
(1,145,193
)
  
(908,293
)
  
–
    
–
    
(1,145,193
)
  
(908,293
)
(Increase) decrease in content assets
    
–
    
–
    
(407,502
)
  
(485,450
)
  
(407,502
)
  
(485,450
)
(Increase) decrease in deferred insurance acquisition costs
    
(83,383
)
  
(88,976
)
  
–
    
–
    
(83,383
)
  
(88,976
)
Increase (decrease) in trade payables
    
(19,833
)
  
(43,819
)
  
166,378
    
111,860
    
140,852
    
62,428
  
Increase (decrease) in deposits from customers in the banking business
    
164,387
    
194,976
    
–
    
–
    
164,387
    
194,976
  
Increase (decrease) in borrowings in the life insurance business and the banking business
    
478,305
    
100,670
    
–
    
–
    
478,305
    
100,670
  
Increase (decrease) in taxes payable other than income taxes, net
    
900
    
830
    
(14,737
)
  
(35,742
)
  
(13,837
)
  
(34,912
)
Other
    
9,426
    
(51,037
)
  
(164,043
)
  
(153,671
)
  
(154,659
)
  
(206,363
)
Net cash provided by (used in) operating activities
    
282,166
    
(227,173
)
  
565,762
    
189,663
    
808,601
    
(81,623
)
                                       
Cash flows from investing activities:
                                      
Payments for property, plant and equipment and other intangible assets
    
(15,720
)
  
(19,642
)
  
(322,833
)
  
(415,597
)
  
(338,553
)
  
(434,748
)
Payments for investments and advances (other than Financial Services segment)
    
–
    
–
    
(63,201
)
  
(185,577
)
  
(63,201
)
  
(185,577
)
Proceeds from sales or return of investments and collections of advances (other than Financial Services segment)
    
–
    
–
    
23,033
    
11,740
    
23,033
    
11,740
  
Other
    
2,914
    
416
    
(147,417
)
  
(251,640
)
  
(144,503
)
  
(248,938
)
Net cash provided by (used in) investing activities
    
(12,806
)
  
(19,226
)
  
(510,418
)
  
(841,074
)
  
(523,224
)
  
(857,523
)
                                       
Cash flows from financing activities:
                                      
Increase (decrease) in borrowings, net
    
(8,138
)
  
(8,514
)
  
(133,832
)
  
278,516
    
(141,970
)
  
270,002
  
Dividends paid
    
(39,159
)
  
(41,335
)
  
(74,208
)
  
(86,384
)
  
(74,208
)
  
(86,383
)
Other
    
(5
)
  
(3
)
  
(62,680
)
  
(84,268
)
  
(62,517
)
  
(84,271
)
Net cash provided by (used in) financing activities
    
(47,302
)
  
(49,852
)
  
(270,720
)
  
107,864
    
(278,695
)
  
99,348
  
                                       
Effect of exchange rate changes on cash and cash equivalents
    
–
    
–
    
28,914
    
78,142
    
28,914
    
78,142
  
                                       
Net increase (decrease) in cash and cash equivalents
    
222,058
    
(296,251
)
  
(186,462
)
  
(465,405
)
  
35,596
    
(761,656
)
Cash and cash equivalents at beginning of the fiscal year
    
497,218
    
889,140
    
1,289,764
    
1,160,496
    
1,786,982
    
2,049,636
  
Cash and cash equivalents at end of the period
  
¥
719,276
  
¥
592,889
  
¥
1,103,302
  
¥
695,091
  
¥
1,822,578
  
¥
1,287,980
  

F-19
Going Concern Assumption
　　Not Applicable

Accounting Policy and Other Information
(Net Income Attributable to Sony Group Corporation’s Stockholders and Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)

   
Yen in millions
  
   
Three months ended December 31
  
   
2021
    
2022
  
Net income attributable to Sony Group Corporation’s stockholders
    
346,161
      
326,809
  
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation:
                
Zero coupon convertible bonds
    
36
      
–
  
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
    
346,197
      
326,809
  

   
Thousands of shares
  
   
Three months ended December 31
  
     
2021
      
2022
  
Weighted-average shares outstanding for basic EPS computation
    
1,239,709
      
1,235,285
  
Effect of dilutive securities:
                
Stock acquisition rights and other
    
5,954
      
3,128
  
Zero coupon convertible bonds
    
5,733
      
–
  
Weighted-average shares for diluted EPS computation
    
1,251,396
      
1,238,413
  

   
Yen in millions
  
   
Nine months ended December 31
  
   
2021
    
2022
  
Net income attributable to Sony Group Corporation’s stockholders
    
771,096
      
808,968
  
Adjustment amount to net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation:
                
Zero coupon convertible bonds
    
129
      
51
  
Net income attributable to Sony Group Corporation’s stockholders for diluted EPS computation
    
771,225
      
809,019
  

   
Thousands of shares
  
   
Nine months ended December 31
  
     
2021
      
2022
  
Weighted-average shares outstanding for basic EPS computation
    
1,239,640
      
1,236,176
  
Effect of dilutive securities:
                
Stock acquisition rights and other
    
5,504
      
3,632
  
Zero coupon convertible bonds
    
6,843
      
2,706
  
Weighted-average shares for diluted EPS computation
    
1,251,987
      
1,242,514
  

F-20
(Segmentation)
　　The former EP&S segment has been renamed the ET&S segment effective from April 2022. This change has not resulted in any reclassification of businesses across segments.

　　The G&NS segment includes the network services businesses, the manufacture and sales of home gaming products and the production and sales of software. The Music segment includes the Recorded Music, Music Publishing and Visual Media and Platform businesses. The Pictures segment includes the Motion Pictures, Television Productions and Media Networks businesses. The ET&S segment includes the Televisions business, the Audio and Video business, the Still and Video Cameras business, the smartphone business and the internet-related service business. The I&SS segment includes the image sensors business. The Financial Services segment primarily represents individual life insurance and non-life insurance businesses in the Japanese market and the banking business in Japan. All Other consists of various operating activities, including the disc manufacturing and recording media businesses. Sony’s products and services are generally unique to a single operating segment.

F-21
(Acquisition of Bungie, Inc.)
　　On July 15, 2022, Sony Interactive Entertainment LLC (“SIE”), a wholly-owned subsidiary of Sony, completed the acquisition of 100% of the shares of Bungie, Inc. (“Bungie”), an independent videogame developer in the United States. As a result of this acquisition, Bungie has become a wholly-owned subsidiary of Sony. This acquisition gives SIE access to Bungie’s approach to live game services and technology expertise.
　　The total consideration of this acquisition, which was determined after customary working capital and other adjustments, was 510,860 million yen (3,704 million U.S. dollars), inclusive of the purchase price and committed employee incentives. Of the total consideration, 348,169 million yen (2,525 million U.S. dollars) was allocated to the purchase consideration of this acquisition, and the remaining 162,691 million yen (1,179 million U.S. dollars) was mainly allocated to deferred payments to employee shareholders that are conditional upon their continuous employment, and other retention incentives. The deferred payments and other retention incentives will be expensed over the required post-acquisition service periods.
　　The fair value of the purchase consideration of this acquisition as of the acquisition date was 334,261 million yen (2,424 million U.S. dollars) which consisted of upfront cash consideration of 207,912 million yen (1,508 million U.S. dollars), deferred consideration of 84,410 million yen (612 million U.S. dollars), and contingent consideration of 41,938 million yen (304 million U.S. dollars) that is subject to employee shareholders’ continuous employment and represents the vested portion of the total vesting term of replacement awards that existed as of the acquisition date. Deferred consideration and contingent consideration are included in other financial liabilities (current and non-current) in the condensed consolidated statements of financial position.
　　Sony’s condensed consolidated statements of income for the nine and three months ended December 31, 2022 include net loss after income taxes of 31,330 million yen (220 million U.S. dollars) and 17,462 million yen (123 million U.S. dollars), respectively, attributable to Bungie since the acquisition date, including the deferred payments and other retention incentives arising out of this acquisition and amortization of intangible assets recognized as of the acquisition date. Revenue after elimination of intercompany transactions attributable to Bungie since the acquisition date for the nine and three months ended December 31, 2022 has not been presented because the revenue was not material.
　　Sony consolidated Bungie by using the acquisition method of accounting and recorded the fair value of the identifiable assets acquired, liabilities assumed and residual goodwill of Bungie. The following table summarizes the fair values assigned to the assets and liabilities of Bungie that were recorded in the G&NS segment. The purchase price allocation as of the acquisition date is preliminary as of December 31, 2022 and is subject to change. The primary areas of the purchase price allocation that are not yet finalized are related to goodwill, content assets, other intangible assets and deferred tax assets.


   
Yen in millions
  
Cash and cash equivalents
    
37,800
  
Trade and other receivables, and contract assets
    
5,093
  
Other current assets
    
3,412
  
Property, plant and equipment
    
7,481
  
Right-of-use assets
    
15,540
  
Goodwill
    
196,473
  
Content assets
    
45,512
  
Other intangible assets
    
66,257
  
Deferred tax assets
    
4,788
  
Other
    
3,564
  
Total assets
    
385,920
  
Trade and other payables
    
3,060
  
Other current liabilities
    
12,195
  
Long-term debt
    
30,944
  
Other
    
5,460
  
Long-term debt
    
30,944
  
Other
    
5,460
  
Total liabilities
    
51,659
  

　　Content assets and other intangible assets mainly consist of license agreements and software. Goodwill mainly represents future growth from new revenue streams and synergies with existing Sony businesses and is not deductible for tax purposes. Goodwill recorded in connection with the acquisition is included in the G&NS segment.
　　Pro forma results of operations have not been presented because the effect of the acquisition is not material.

F-22
(Change in presentation)
Condensed Consolidated Statements of Cash Flows
　　Certain reclassifications of the condensed consolidated statements of cash flows for the nine months ended December 31, 2021 have been made to conform to the presentation for the nine months ended December 31, 2022.


F-23

Outlook for the Fiscal Year Ending March 31, 2023

The forecast for consolidated results for the fiscal year ending March 31, 2023, as announced on November 1, 2022, has been revised as follows:

   
(Billions of yen)
              
   
March 31, 2022
Results
    
November
Forecast
    
February
Forecast
    
Change from
November Forecast
  
Sales *1
  
¥9,921.5
    
¥11,600
    
¥11,500
    
- ¥100 bil
    
- 0.9
%
Operating income
  
1,202.3
    
1,160
    
1,180
    
+ 20 bil
    
+ 1.7
%
Income before income taxes
  
1,117.5
    
1,120
    
1,120
      
-
    

-
Net income attributable to Sony Group Corporation’s stockholders
  
882.2
    
840
    
870
    
+ 30 bil
    
+ 3.6
%
                                 
For all segments excluding the Financial Services segment *2
  
March 31, 2022
Results
    
November
Forecast
    
February
Forecast
    
Change from
November Forecast
  
Net cash provided by operating activities
  
¥813.3
    
¥820
    
¥550
    
- 270 bil
    
- 32.9
%

*1 “Sales and Financial Services revenue” are shown as “Sales” (the same applies below).
*2 Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors. Please refer to page F-16 for details about the preparation of the Condensed Statements of Cash Flows.

Assumed foreign exchange rates are the following:
 
Assumed foreign currency exchange rates for
the three months
ending March 31, 2023
(For your reference)
Assumed foreign currency exchange rates for the
fiscal year ending March 31, 2023 at the time of
the November forecast
1 U.S. dollar
approximately 134 yen
approximately 140 yen
1 Euro
approximately 139 yen
approximately 138 yen

Sales are expected to be lower than the November forecast due to lower-than-expected sales in the Pictures, Entertainment, Technology & Services* and Imaging & Sensing Solutions segments.

Operating income is expected to be higher than the November forecast due to an expected increase in operating income in the Game & Network Services segment, as well as an expected decrease in the operating loss in All Other, Corporate and elimination.

Income before income taxes is expected to remain unchanged from the November forecast due to an expected increase in financial expenses, net, primarily resulting from an increase in net foreign exchange losses, substantially offset by the above-mentioned expected increase in operating income.

Net income attributable to Sony Group Corporation’s stockholders is expected to be higher than the November forecast due to a decrease in income tax expense.

Net cash provided by operating activities for all segments excluding the Financial Services segment is expected to be lower than the November forecast, mainly due to an increase in working capital resulting from an increase in inventories of PlayStation®5 hardware, for which production increased during the third quarter of the current fiscal year.

* The former Electronics Products & Solutions segment has been renamed the Entertainment, Technology & Services (ET&S) segment effective from April 2022. This change has not resulted in any reclassification of businesses across segments.
- 1 -


The forecast for each business segment for the fiscal year ending March 31, 2023 has been revised as follows:

   
(Billions of yen)
  
   
March 31, 2022
Results
    
November
Forecast
    
February
Forecast
  
Game & Network Services (G&NS)
  
Sales
  
¥2,739.8
    

¥3,630
    

¥3,630
  
Operating income
    
346.1
      
225
      
240
  
Music
  
Sales
    
1,116.9
      
1,370
      
1,370
  
Operating income
    
210.9
      
265
      
265
  
Pictures
  
Sales
    
1,238.9
      
1,450
      
1,400
  
Operating income
    
217.4
      
115
      
115
  
Entertainment, Technology & Services (ET&S)
  
Sales
    
2,339.2
      
2,510
      
2,480
  
Operating income
    
212.9
      
180
      
180
  
Imaging & Sensing Solutions (I&SS)
  
Sales
    
1,076.4
      
1,440
      
1,420
  
Operating income
    
155.6
      
220
      
220
  
Financial Services
  
Financial services revenue
    
1,533.8
      
1,310
      
1,310
  
Operating income
    
150.1
      
220
      
220
  
All Other, Corporate and elimination
  
Operating loss
    
(90.7
)
    
(65
)
    
(60
)
Consolidated
  
Sales
    
9,921.5
      
11,600
      
11,500
  
Operating income
    
1,202.3
      
1,160
      
1,180
  

Game & Network Services (G&NS)
Sales are expected to remain unchanged from the November forecast. Operating income is expected to be higher than the November forecast mainly due to the positive impact of foreign exchange rates.

In the February forecast, Sony has incorporated approximately 57 billion yen in expenses associated with acquisitions completed within the current fiscal year, including Bungie, Inc. The actual amount of expenses is subject to change depending on factors such as completion timing and the accounting treatment to be finalized after the closing dates.

Music
Sales and operating income are expected to remain unchanged from the November forecast.
- 2 -

Pictures
Sales are expected to be lower than the November forecast primarily due to lower-than-expected revenues in Motion Pictures resulting from release date changes for some theatrical releases and in Television Productions resulting from delays in deliveries of television episodes, as well as the impact of foreign exchange rates. Operating income is expected to remain unchanged from the November forecast due to lower marketing costs resulting from the release date changes for some theatrical releases in Motion Pictures, substantially offset by the impact of the above-mentioned expected decrease in sales.

Entertainment, Technology & Services (ET&S)
Sales are expected to be lower than the November forecast due to an expected decrease in sales of televisions resulting from an expected decrease in unit sales. Operating income is expected to remain unchanged from the November forecast due to the impact of the above-mentioned expected decrease in sales, substantially offset by a decrease in operating expenses.

Imaging & Sensing Solutions (I&SS)
Sales are expected to be lower than the November forecast primarily due to lower-than-expected sales of image sensors for mobile products resulting from a decrease in unit sales, partially offset by an improvement in the product mix. Operating income is expected to remain unchanged from the November forecast primarily due to the impact of the above-mentioned decrease in sales, substantially offset by a decrease in manufacturing costs.

Financial Services
Financial services revenue and operating income are expected to remain unchanged from the November forecast.

The effects of future gains and losses on investments held by the Financial Services segment due to market fluctuations have not been incorporated within the above forecast as it is difficult for Sony to predict market trends in the future. Accordingly, future market fluctuations could further impact the above forecast.

The above forecast is based on management’s current expectations and is subject to uncertainties and changes in circumstances. Actual results may differ materially from those included in this forecast due to a variety of factors.  See “Cautionary Statement” below.

Notes about Financial Performance of the Music, Pictures and Financial Services segments

The Music segment results include the yen-based results of Sony Music Entertainment (Japan) Inc. and the yen-translated results of Sony Music Entertainment and Sony Music Publishing LLC, which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis.

The Pictures segment results are the yen-translated results of Sony Pictures Entertainment Inc., which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.

The Financial Services segment results include Sony Financial Group Inc. (“SFGI”) and SFGI’s consolidated subsidiaries such as Sony Life, Sony Assurance Inc. and Sony Bank Inc. The results discussed in the Financial Services segment differ from the results that SFGI and SFGI’s consolidated subsidiaries disclose separately on a Japanese statutory basis.
- 3 -

Cautionary Statement
Statements made in this release 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 limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:
(i)
Sony’s ability to maintain product quality and customer satisfaction with its products and services;
(ii)
Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including image sensors, game and network platforms, smartphones and televisions, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing customer preferences;
(iii)
Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms;
(iv)
the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures, investments, capital expenditures, restructurings and other strategic initiatives;
(v)
changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility;
(vi)
Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity;
(vii)
Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of its products, and its other business operations;
(viii)
the global economic and political environment in which Sony operates and the economic and political conditions in Sony’s markets, particularly levels of consumer spending;
(ix)
Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade;
(x)
Sony’s ability to forecast demands, manage timely procurement and control inventories;
(xi)
foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets, liabilities and operating results are denominated;
(xii)
Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel;
(xiii)
Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others;
(xiv)
the impact of changes in interest rates and unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment;
(xv)
shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment;
(xvi)
risks related to catastrophic disasters, geopolitical conflicts, pandemic disease or similar events;
(xvii)
the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and
(xviii)
the outcome of pending and/or future legal and/or regulatory proceedings.

Risks and uncertainties also include the impact of any future events with material adverse impact.  The continued impact of COVID-19 and developments relating to the situation in Ukraine and Russia could heighten many of the risks and uncertainties noted above. Important information regarding risks and uncertainties is also set forth in Sony’s most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.




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