And we believe that we will be able to continue to grow our business in a period of the next mid-range plan. On the other hand, at a time when sales are not increasing as planned, primarily due to the market environment, we recognize that significant increase in manufacturing costs, mainly due to capital expenditure and production operational losses such as those brought on the — by deterioration yield issues. That needs to be addressed in order to further improve profitability going forward. Regarding human sensor capital expenditure, in the period next mid-range plan, we plan to leverage production capacity and strategy inventory we have built up ahead of time to optimize the investment. Lastly, there is the Financial Service segment. For the current quarter, mainly due to the impact of market fluctuations on Sony Life.
Financial Services revenue increased ¥287.3 billion year-on-year to ¥311.7 billion, and the operating income increased ¥30.2 billion to ¥77.3 billion, both significant increase. Adjusted OIBDA increased ¥30.5 billion year-on-year to ¥84.3 billion. Sony Life’s cumulative new policy amount enforced during the 9 months ended December 31, 2023, continue to grow steadily, increasing 22% year-on-year to ¥7.3 trillion. FY ’23 Financial Service revenue is expected to increase ¥90 billion from our previous forecast to ¥1.3 trillion. Annual operating income is expected to increase ¥20 billion from the previous forecast to ¥175 billion reflecting the recording of a gain mainly from the transfer of portion of the share of Sony Payment Services Inc.
by Sony Bank. Adjusted OIBDA is unchanged from the previous forecast. Please note that the forecasting corporate costs associated with profit quality improvement measure at Sony Life going forward excluding the record of the gain mainly from the transfer I just mentioned, we have made no change of our previous forecast. Finally, I would like to speak about the main points regarding the forecast for this fiscal year and outlook for each business in next fiscal year and beyond. Regarding the outlook for the current fiscal year, consolidated operating income for the quarter reached the level approaching the record high level achieved in the third quarter of the fiscal year ended March 31, 2022. And I think we have created good momentum towards completing the current maturing.
Looking ahead to the next fiscal year, in the G&NS segment, we expect operating income to slightly increase from the current fiscal year as the gradual growth in third-party software and network services due to the expansion of PS5 installed base offsets a decrease in profit from first-party software. In the Pictures segment, although the impact of the strike is factor to peak next fiscal year, we are aiming for a level of operating income that exceeds the current fiscal year, mainly due to the expected growth of control development of a global production and to control costs. In the I&SS segment, we expect moderate sales growth due to a recovery of the smartphone market as well as increasing the size and value added of mobile sensors, which have been promoting to date.
Regarding image sensor, capital expenditure during the period of the next mid-range plan, we currently assume that we will be able to keep it to approximately 70% to 80% of the current mid-range plan period by taking forward by existing production facility and strategic inventory. In the Financial Services segment, we were able to obtain approval for the corporate restructuring plan for partial spinoff under the active segmenting industrial competitiveness of Japan. Based on the approval, we are working in honest to prepare for the spinoff and listing of the shares of Sony Financial Group, Inc. in October ’25. That’s all for my explanation.
A – Unidentified Company Representative: Thank you very much. We have given presentation by Totoki, Hayakawa and Matsuoka from 4:25, we have Q&A for media. And from 4:50 Q&A for investors and analysts. 20 minutes for each Q&A session. [Operator Instructions]. Please wait until the Q&A session begins. Thank you for waiting. We will now entertain questions from the media. As it was the case of presentation, the people are shown on the slide are the people who will respond in to your questions. I’d like to now begin the Q&A session. [Operator Instructions]. The first question it’s Tsutsumi from Nikkei Shimbun Newspaper.
Kentaro Tsutsumi: Tsusumi from Nikkei Shimbun. I have 2 questions. First question. The strategic investment and CapEx of the current midrange plan. You referred to this in the semiconductor group as a whole FY ’21 to the end of this fiscal year, in 3 years. At the end of the day, how much would be the amount of investment? Also, based upon that, next mid-range plan, the strategic investment and the CapEx. What will be the direction and the size? How — what would be the level of investment? Are there going to be increase? Or strategic investment will increase, but the CapEx will be flat? Can you please give us the direction and also the size. The second question, in the medium term, ROIC forecast for each business segment, entertainment and semiconductors. What applications and uses will drive growth. The products and services as well. Can you please elaborate? These are my 2 questions.
Hiroki Totoki: Thank you very much for your questions. Your first question, regarding the current mid-range plan and strategic investment and capital expenditure from FY ’21 through FY ’23. The cumulative amount, CapEx will be about ¥1.9 trillion. M&A and other strategic investment is ¥1.8 trillion. That is our forecast. The investment is progressing steadfastly. So in the medium term, this investment will bear fruit. And then next mid-range plan and the size of investment and the direction of investment. Officially, in spring next fiscal year, we would like to give you explanation. CapEx I&SS investment. As compared to the past, it will be 70% to 80% I explained in my presentation. The largest amount — largest of the CapEx is investment into I&SS.
So there will be a slight increase in investment in this area. With regards to strategic investment, there are opportunities that we have to look at. So it’s very difficult to say precisely. But about the same level as this fiscal year or might be a slight decrease from this year. Strategic investment, as you know, include return to the shareholders. So including that, we have to think about strategic investment. And then from next year, the direction of ROIC. Entertainment area, the driver of the ROIC will be gained. And in terms of improvement, Music, we have expectations for improvement in Music. Music in the current midrange plan, acquisition of large catalogs and the foundation of the business and the competitives have been strengthened.
Going forward, based upon the catalog base, we are going to further expand this. That’s all from me. Thank you.
Unidentified Company Representative: Next question, Mr. Meyaki from Toyo Kezai. Toyo Securities.
Unidentified Analyst: I have two questions. The first question is about the spin-off that was released today. When I read this, by implementing this spin-off, entertainment and other areas that you are focusing on will not bring in any cash. So the purpose of conducting this spin-off and also trying to improve the business. What is the relationship between the 2? My second question has to do with Indian strategy. So I understand that your negotiations with Z for a merger didn’t — wasn’t successful. I understand that you spent some time explaining about India, but are you thinking about a change in your strategy? What will you do with that investment you were thinking about that merger? How will you use that money?
Hiroki Totoki: Thank you for the question. About the financial spinoff. Regarding that point, as you know, we will do an actual — we will not use any cash. But on the balance sheet, I think there’s about ¥20 trillion asset and liability recorded. And if we streamline that, the business capital allocation will become easier to handle. On the other hand, in financials or by — they can, of course, try to grow on their own because they are going to become a listed company. So for both companies, I think this will be a win-win situation. That is our aim. And regarding the Z merger, the negotiations as — has been announced. The negotiations are not progressing at the moment but the strategy itself, India on a long-term basis has a great growth potential.
It’s a very appealing market. Therefore, we will try to seek various opportunities. And if we can find another opportunity that would replace this type of plan, we will look into that, and we will also continue to look into organic growth and our strategy. The amount of money that was expected to be used for that merger? Well, that investment wasn’t — isn’t going to change capital allocation or it will not change our behavior in our investment. So at the moment, we don’t have any concrete plans.
Unidentified Company Representative: Now we can move to the next question. Jarka from Newspeaks.
Unidentified Analyst: Yes. My name is Jarka from Newspeaks. First question is about the Gaming business. Over the last few years, you had shortages of smart chips, semiconductor chip supply was the problem. But then to the smartphone chip is becoming more difficult to produce additional value by miniaturizing it. In the past, if you wait for 2 or 3 more years, more advanced CTGT, like can reduce the energy consumption with a much lower prices. You could do that, right? So the hardware itself you can sell at ¥30,000 or so. You could take that strategy. But right now, for 5 or 3 nanometers, if you are trying to get those miniaturized semiconductor jobs, it will become more expensive. So taking that strategy to become more expensive or more complicated.
But at the same time, you could expand on the network to have different ways to develop the GPS? Or do you think still we need to rely on hardware with the pricing so that you can widely sell them? Do you still not giving that option? So that’s my question. Second question is about cash flow. For several years — years ago, you had ¥4 billion cash flow. But right now, operating cash flow because of many reasons is quite behind the plan compared with the plan. But operating cash flow will be the — like a driver of where you would make investment. Therefore, would you become slightly hesitant to make less of investment? Or would you want to like reduce inventory? There are other ways to increase cash, right? So do you think allocations of capital as big as previously is going to be possible?
