And that is causing this yield issue, and that’s at the bottom of the yield issue. So the improvement is not structural, but we have to look at each phenomena, and we have to accumulate the solutions and to make it optimal. And if we have changed to a new different product? No, that’s not what we are doing. That’s my answer.
Kota Ezawa: And the impact on the profit, well, the 15%, how much would that translate into amount?
Hiroki Totoki: Yes, that’s just as you said, JPY35 billion. Thank you.
Unidentified Company Representative: We’d like to entertain the next question. SMBC Katsura, please, SMBC Nikko Securities, Katsura-san. Please go ahead.
Ryosuke Katsura: This is Katsura from SMBC Nikko Securities. And I have 2 questions as well. in GNS and INSS. First, on game, next year in March, Ranson is going to leave and Totoki-san going to have this role concurrently. So the background has already been explained in the press release, but — in the mid- to long term, NS top management, what is your vision? That is what I’d like to ask. That’s the first question. And the second question on I&SS. Next fiscal year, or looking at the supplementary sheet, wafer capacity is 154,000 already. And next fiscal year, the number of models will be expanded. So I think that is one of the reasons. But on the other hand, you will be reviewing the lines and also reducing the number of lines. So next fiscal year, the depreciation of the investment. What is going to be the scale? And depending on that, will it impact the improvement of profitability and to what extent? That is what I’d like to understand.
Hiroki Totoki: Thank you very much for your questions. First, on G&NS this time, starting October 1, I became Chairperson and then in April — on April 1, I will be the provisional CEO for interim. And this has already been published, but it will be for a maximum 1 year will be an acting CEO. And during this time, my most important mission will be to find the successing CEO and assigning the person and transitioning to the person smoothly. So game and networking services is a strategically important business for Sony. So — of course, employees and other stakeholders have high expectation towards this business. So we want to address the expectation by selecting the appropriate CEO and transition to the person as soon as possible.
That is the answer to the first question. And second question on I&SS, FY ’24 our view. The investment has been continuing and depreciation expenses will increase next fiscal year as well because we are moving to dice size — large-sized equipment. And as a result, the demand will be increasing, but the — we will be discerning the market condition recovery. And so next fiscal year onward, we’d like to make decision on investments. I believe that next fiscal year, for the next mid-range plan, I believe that we can talk about our next mid-range plan thoroughly to use. So as we talk about that, I think that we can talk about the size of investments that we will be making in the next 3 years. That is all. Thank you.
Unidentified Company Representative: Thank you. The time is running short. So from now, I’d like to ask questions to be limited to 1 question per person. Next, JPMorgan Securities, Ayada-san, please.
Junya Ayada: Ayada from JPMorgan. One question. Game. I have a question regarding game. Second quarter operating profit an increase and decrease. — thinking behind that, can you explain in a quantitative fashion — excluding FX impact, JPY8.5 billion decrease in profit on a year-on-year basis. The factors for this hardware negative was large and software was an increase in promotion and others is SNG was large. So what is the impact for each of these factors? And if it’s difficult to say in a quantitative manner, the profitability of software remains — whether the profitability of software is not changing from the before.
Hiroki Totoki: Quantitatively, we are not disclosing. So I would like to highlight the important points. First, operating profit and the factors for increase. The largest contributor is software. Simply, software sales was good. First party, slightly weak. Third party is strong. On a net basis, there will be contribution — positive contribution. And then the second is the positive impact of the exchange rate. And next is network service. Simply, network service revenue increased. And the negative factors are the following: there are two factors. One is hardware. PS5 selling is increasing and related to that. And then sales is increasing this much. And SG&A is increasing accordingly. So these are the positive and negative factors.
Sadahiko Hayakawa: Thank you. All right the next question and this will be the last question. So from Matsui Securities [ph].
Unidentified Analyst: The cash flow I would like to ask and 1.16 trillion and so at the year-end the inventory doubled and the GNS and INS, what kind of level would that be and for the next year onwards, so the working capital would be more pressurized and so obviously it would be better. So for the game and INSS, would you tell us how it’s going to be or how you view this?
Sadahiko Hayakawa: Yes, thank you for the question and ask for the question. So as I would answer this question. Yes. And for your question. And this issue that you raised. So JPY90 billion for the cash flow is because of the foreign exchange impact and also the inventory and the working capital — sorry, not the inventory, but working capital for the debt we have and the PlayStation 5 and also the semiconductor. The second quarter and the third quarter, the sales to be increased, so we have more inventory on hand. And as of much and it’s going to be normalized. And especially game, the inventory would be much less in March, okay? And for the next year, so it’s going to be a compressed inventory. So how is the operating cash flow would be?
So midterm plan, we are reviewing this now closely. And about the working capital, it’s going to come back. And here, the cash flow would be positively impacted. And what you had asked the inventory level as of year-end, G&NS and I&SS is different. So about the game, PlayStation 5 sell-in would be increased so that inventory would be largely decreased. And I entices, as has been explained, the revenue is increasing quite rapidly. In that case, the inventory is going to be at a level that’s appropriate to that. Thank you, and that’s all for me.
Unidentified Company Representative: As such, we would like to close the Sony Q2 FY 2023 consolidated results meeting. Thank you so much.
