There are also financing. There are many different options to manage their cash, right? So currently, can you talk a little more context about how do you see about the use of cash and how much cash that you could generate and invest?
Hiroki Totoki: Well, first question about G&NS. There is a structural issue, as you have pointed out. And you said it exactly right, PS5 today is using Nano die that is on single digit. In the past, PS4, the previous version, chip shrink benefit is very difficult to combine unlike older generation. Therefore, cost reduction is very difficult simply. But if — I simplify the explanation. Now our sales strategy, we used to have a steep discount, but we do not want to rely on that. We want to make sure our business is profitable as well as we want to focus on user engagement together with the volume of sales of units. You need to strike a nice balance between all those components. So generation from PS4 to 5, one of the biggest differences we shifted more focus on network service.
That’s one. And from PS4 to PS5, we can continue to handle over the consumer customers. So user engagement is something that we want to sustain so that we can sustain the level of image. That will be the most critical things in our business right now. Now our plan for the hardware, that is like one is the commercial strategy that gets to do with the commercial strategy. And what will be the right pricing for customers. But whatever that might be, you have to — you cannot enjoy a game without client device in your hand. So in that sense, a PS portal would be 1 device that we just came up with as a conduct an experiment, but we are getting some feedback. We are hoping to get more feedback. But we can get those feedback while customers using them.
So that our services and our network mature if I evolve by receiving those feedback. Now the other question that you raised was on the cash flow. As you said it rightfully so, we had about ¥4.2 billion in cash flow in financial years ago. This year, the operating cash flow is relatively lower. But working capital has actually have grown quite a bit. If you just cut it off in 3 years, it may look like our operating income is lower, but inventory level can be reduced. We can collect accounts payable and we can get the cash. So in a big sense there’s no major change. And I would say you’ve — you can actually understand it like that. And if you look at the rating agencies, we do actually have more opportunity for financial leverage should it need to.
If it were required, we can also take that as an option.
Unidentified Company Representative: Next question, Abeta from Nikkan Kogyo Shimbun, please.
Unidentified Analyst: Abe from Nikkan Kogyo Shimbun. DNS Camera. I have 2 questions regarding the camera. The first question by situation by market, for China, sales unit sales volume was larger than your forecast. What about other markets, North America, Europe and domestic in Japan? What is the trend of the sales? Second question is the level of inventory. ET&S segment as a total as of the end of December, reduction in the inventory as compared to the same period last year. What about the inventory level of camera? These are my 2 questions.
Hiroki Totoki: Thank you for your questions. First, ET&S segment, and you’re talking about camera, and what is the market trend was your question. China has been doing well. For the third quarter, North America and the European market have been moving rather relatively well. The inventory itself, there is no particular problem in the inventory level at a level that we are satisfied with, and we are able to maintain that inventory level.
Unidentified Company Representative: I think we don’t have much time left. I think the next question will be the last question. From Yomiuri Shimbun, Masala from Yomiuri Shimbun.
Unidentified Analyst: Sorry, this is a different question. This is about the Nikkei average, and I believe that it is the highest — record high. Were you expecting this? I’m sure the investors have a lot of expectations towards the Sony Group. How do you feel about this?
Hiroki Totoki: Thank you for the question. Since the beginning of this year, we’re seeing this increase — significant increase. Quite frankly, I, myself, did not expect this kind of trend. So in that sense, I kind of regret that my forecast didn’t come true, but I’m very happy that the market’s expectation of us is quite high. We hope to make sure that we don’t underperform against that type of expectation and to demonstrate growth and development. Thank you.
Unidentified Company Representative: Since it’s time, we’d like to conclude the Q&A session with the media. Q&A with the investors and analysts will start at 4:47. We will soon be starting question-and-answer session with the investor and analysts. Please give us a few more moment while we get started. Thank you for waiting. We’d like to now start questions from the investors and analysts. I’ll be facilitating this meeting — this session. My name is Condo from IR Group. Very good to see you all. Respondents, just like all media sessions are being going to be responded by 3 of them on slide. And please note about the information that we have distributed to you ahead of time about how to use telephone, how to control it and other things to be careful about. [Operator Instructions]. With that, I’d like to ask Katsura from SMBC Nikko.
Ryosuke Katsura: My name is Katsura from SMBC Nikko. I like to, yes, ask 2 questions. First question is about on a fourth quarter industry inventories like your plan is going to be shrinking the inventory level. But it is looking at Slide 7 tandem that you are showing how much inventory that you expect. But how much are you planning to shrink? Do you — can you give any idea about how small the inventory level is going to be? And then the 7 19 talks all about utilization. So maybe you can do that calculation about that. But can you also talk about how we should interpret it after Q1 next year? Second question for the next year, Game & Network Service, Pictures. And I think you mentioned back then in those sections, you made about aiming at certain levels. But can you also talk about other segments about perspective and other segments as well.
Hiroki Totoki: Okay. Thank you very much for your question. I&SS fourth quarter inventory to that question, well, in terms of that in a 3 quarters levels is actually quite a small level. So the impact overall is quite limited. In general, I would say it will end up to about being flat. Flat or plus incremental small addition on top of third quarter. Now you asked also about inventory level for next financial year. And we are expecting our top line growth to grow. And so inventory will also grow as fast as the top line but that should be covered during the business planning process for next financial year, and I hope that is good enough for my answer to your question. Now for FY ’24 in general, what I’ve talked about, yes, I mentioned about Game, Pictures, I&SS.
Yes, I mentioned about them for perspective for FY 2024. For Music, market on a streaming single high digit or mid-digit, single to mid-digit was the growth. And we hope to grow faster than that. So finance, well, the base profit level is going to gradually slowly grow. It’s going to take some time, right? But the new policy amount is going up, too. So it’s not changed since it’s going to keep growing in a steady or gradual but because of adoption if IFRS, we have to do risk hedging because there can be volatility because of the change of the standard. That is the risk. We are going to be investing some costs. Therefore, we believe relatively gradual growth for finance. Pictures, I actually mentioned it already. Flat or plus incremental on top or flat for Picture, like I said.
But in any case, we will be giving the next financial guidance during the springtime. So we hope to cover more details at that time. Thank you.
Unidentified Company Representative: Next question, Okazaki from Nomura Securities.
Yu Okazaki: Okazaki from Nomura Securities. Game, I have questions regarding Game. MAU became a record high level. PS5 cumulative sales is already exceeding. So PS5 alone will not be able to satisfy that. Why is it MAU has grown to this level? Can you please explain a bit more in detail? MAU use is a metric for user engagement and an important metric. While MAU is increasing, in the fourth quarter, the profit is not as much as expected. MAU increases, but the profit was not as high. What is the background for this?
Hiroki Totoki: Thank you for your question. First, with regards to MAU, for one thing, there is seasonality. Third quarter is the holiday season. So there’s seasonality factor. And then free-to-play titles, we had the big hits. So we are enjoying benefits from that. These are the 2 major factors drivers for increasing the MAU. And then engagement metric. Third quarter, I already explained a bit, special factors were there. And about ¥30 billion of profit will be shifted to the fourth quarter from the third quarter PS5 inventory valuation-related number. In the second half will be leveled. But if you only look at the third quarter, the profit level, as it appears is slightly less than what it actually is.
Unidentified Company Representative: The next question from Mizuho Securities. Nakane-san.
Yasuo Nakane: From Mizuho Securities. I have 2 questions. The first question to Mr. Totoki, the first question is as follows. It’s 4 months since you became the President. What have you noticed or realized since you have become the President? Next quarter, there’s no first party, large first parties but the W3C titles going to be have. Now in 2020 — FY 2025, what kind of measures are you considering? If you can share with us your impressions. The second question is about the return to shareholders. I understand that the strategic investment is going to become slightly lower. So basically, I understand that your measures of investment will not change significantly. But if you have any comments on that point.
Hiroki Totoki: Yes. Thank you very much for your question i.e., actually, I am the chairperson. It’s been about 4 months. And I’m trying to demonstrate leadership and trying to have as many meetings as possible with the management team. I also visit studios and everyone is working really hard to fulfill their responsibility, to try to optimize the business. And I understand that. But overall, growth, overall growth and sustainable profitability or increasing margin, how will that translate to these goals? I don’t think people understand that deeply. I think that is the problem of the organization. So as far as I’m concerned, I try to understand what is happening in the company, in the industry and also with the perspective of the analysts, and try to explain in a transparent manner so that people can recognize and notice these issues so that we can have a harmonized approach going forward.
That is a very general comment since I became the chairperson. There are concrete points, which I will not go into today. Now about visiting the studios and about Bungie. And I’ve had meetings with the leaders there, the studios. People who work in the studios have very high motivation. They’re very highly motivated. They’re very good people, and they’re very creative people. They have great creative minds and they also have knowledge about live streaming. However, having said that, when it comes to the business itself, I think there is room for improvement. And that’s got to do about how to use the money or about the schedule of development or how to fulfill one’s accountability towards development, et cetera. Those are my frank impressions.
So I will continue to engage in dialogue with the people so that we can find the right way to proceed. Now shareholder returns and dividends. As you mentioned, no major change there. We will have to deal with shareholder returns in an honest way. And that is part of the strategic investment and we believe that if the solution is considered to be the optimum solution, then we will go ahead with that solution.
Unidentified Company Representative: Now let me move to the next question. I’d like to ask Yasui from UBS Securities to ask the next question please.
Kenji Yasui: This is Yasui from UBS Security. I have to want to ask 2 questions. And so basically, it’s a single question. Operating profit, the game and semiconductor they were actually, top line is growing, but the profit level is not really growing up. Respective of 3 years or not, what are the things that you think — so what do you think what you need to have, whether it’s possible or not, is there any particular initiative or angle that you’re going to get at to improve the bottom line, not only the top line?
