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 OCTOBER 2020

Commission File Number: 001-06439

SONY 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 CORPORATION

(Registrant)

By:  /s/  Hiroki Totoki

                (Signature)

Hiroki Totoki

Executive Deputy President and

Chief Financial Officer

Date: October 28, 2020

List of materials

Documents attached hereto:

i) Press release: Quarterly Financial Statements for the Second Quarter Ended September 30, 2020 And Outlook for the Fiscal Year Ending March 31, 2021

Quarterly Financial Statements

for the Second Quarter Ended September 30, 2020

And

Outlook for the Fiscal Year Ending March 31, 2021

October 28, 2020

Sony Corporation

Quarterly Financial Statements (Unaudited)	F-1
Consolidated Balance Sheets	F-1
Consolidated Statements of Income (Three months ended September 30)	F-2
Consolidated Statements of Comprehensive Income (Three months ended September 30)	F-2
Consolidated Statements of Income (Six months ended September 30)	F-3
Consolidated Statements of Comprehensive Income (Six months ended September 30)	F-3
Consolidated Statements of Cash Flows (Six months ended September 30)	F-4
Notes to Consolidated Financial Statements	F-5
-Business Segment Information	F-5
-Going Concern Assumption	F-12
-Significant Changes in Shareholders’ Equity	F-12
-Accounting Policies and Other Information	F-12
Outlook for the Fiscal Year Ending March 31, 2021	1
Outlook for the Fiscal Year Ending March 31, 2021	1
Cautionary Statement	5

All amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. (“U.S. GAAP”).

Sony Corporation and its consolidated subsidiaries are together referred to as “Sony”.

 

(Unaudited)

Consolidated Financial Statements

Consolidated Balance Sheets

	(Millions of yen)
	March 31			September 30			Change from
ASSETS	2020			2020			March 31, 2020
Current assets:
Cash and cash equivalents	¥	1,512,357		¥	1,884,368		¥	+372,011
Marketable securities		1,847,772			2,540,460			+692,688
Notes and accounts receivable, trade and contract assets		1,028,793			1,046,907			+18,114
Allowance for credit losses		(25,873	)		(25,011	)		+862
Inventories		589,969			681,685			+91,716
Other receivables		188,106			315,989			+127,883
Prepaid expenses and other current assets		594,021			538,298			–55,723
Total current assets		5,735,145			6,982,696			+1,247,551
Film costs		427,336			401,499			–25,837
Investments and advances:
Affiliated companies		207,922			214,217			+6,295
Securities investments and other		12,526,210			13,176,045			+649,835
Allowance for credit losses	－				(8,124	)		–8,124
		12,734,132			13,382,138			+648,006
Property, plant and equipment:
Land		81,482			79,341			–2,141
Buildings		659,556			655,991			–3,565
Machinery and equipment		1,725,720			1,656,886			–68,834
Construction in progress		76,391			102,084			+25,693
		2,543,149			2,494,302			–48,847
Less-Accumulated depreciation		1,634,505			1,551,922			–82,583
		908,644			942,380			+33,736
Other assets:
Operating lease right-of-use assets		359,510			348,177			–11,333
Finance lease right-of-use assets		33,100			43,253			+10,153
Intangibles, net		906,310			899,281			–7,029
Goodwill		783,888			778,297			–5,591
Deferred insurance acquisition costs		600,901			627,893			+26,992
Deferred income taxes		210,372			197,279			–13,093
Other		340,005			348,920			+8,915
		3,234,086			3,243,100			+9,014
Total assets	¥	23,039,343		¥	24,951,813		¥	+1,912,470
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	810,176		¥	1,294,800		¥	+484,624
Current portion of long-term debt		29,807			118,832			+89,025
Current portion of long-term operating lease liabilities		68,942			73,585			+4,643
Notes and accounts payable, trade		380,810			669,611			+288,801
Accounts payable, other and accrued expenses		1,630,197			1,533,438			–96,759
Accrued income and other taxes		145,996			162,066			+16,070
Deposits from customers in the banking business		2,440,783			2,655,330			+214,547
Other		733,732			1,007,147			+273,415
Total current liabilities		6,240,443			7,514,809			+1,274,366
Long-term debt		634,966			745,581			+110,615
Long-term operating lease liabilities		314,836			299,834			–15,002
Accrued pension and severance costs		324,655			316,457			–8,198
Deferred income taxes		549,538			325,939			-223,599
Future insurance policy benefits and other		6,246,047			6,420,438			+174,391
Policyholders’ account in the life insurance business		3,642,271			3,967,126			+324,855
Other		289,285			281,117			–8,168
Total liabilities		18,242,041			19,871,301			+1,629,260
Redeemable noncontrolling interest		7,767			7,674			–93
Equity:
Sony Corporation’s stockholders’ equity:
Common stock		880,214			880,214		－
Additional paid-in capital		1,289,719			1,485,728			+196,009
Retained earnings		2,768,856			3,418,107			+649,251
Accumulated other comprehensive income		(580,980	)		(597,184	)		–16,204
Treasury stock, at cost		(232,503	)		(156,364	)		+76,139
		4,125,306			5,030,501			+905,195
Noncontrolling interests		664,229			42,337			–621,892
Total equity		4,789,535			5,072,838			+283,303
Total liabilities and equity	¥	23,039,343		¥	24,951,813		¥	+1,912,470

F-1

Consolidated Statements of Income
	(Millions of yen, except per share amounts)
	Three months ended September 30
		2019			2020			Change
Sales and operating revenue:
Net sales		¥	1,725,310		¥	1,723,575		¥	–1,735
Financial services revenue			375,089			372,107			–2,982
Other operating revenue			21,860			17,804			–4,056
			2,122,259			2,113,486			–8,773
Costs and expenses:
Cost of sales			1,156,980			1,145,988			–10,992
Selling, general and administrative			354,916			329,307			–25,609
Financial services expenses			336,178			328,385			–7,793
Other operating income, net			(2,404	)		(5,538	)		–3,134
			1,845,670			1,798,142			–47,528
Equity in net income of affiliated companies			2,366			2,420			+54
Operating income			278,955			317,764			+38,809
Other income:
Interest and dividends			4,953			2,520			–2,433
Other			2,036			1,524			–512
			6,989			4,044			–2,945
Other expenses:
Interest expenses			2,784			2,704			–80
Loss on equity securities, net			13,343			11,407			–1,936
Foreign exchange loss, net			7,253			3,690			–3,563
Other			470			4,403			+3,933
			23,850			22,204			–1,646
Income before income taxes			262,094			299,604			+37,510
Income taxes			61,927			(163,898	)		–225,825
Net income			200,167			463,502			+263,335
Less - Net income attributable to noncontrolling interests			12,280			3,868			–8,412
Net income attributable to Sony Corporation’s
stockholders		¥	187,887		¥	459,634		¥	+271,747
Per share data:
Net income attributable to Sony Corporation’s
stockholders
— Basic		¥	151.89		¥	374.34		¥	+222.45
— Diluted			148.59			367.82			+219.23

Consolidated Statements of Comprehensive Income
	(Millions of yen)
	Three months ended September 30
			2019			2020		Change
Net income		¥	200,167		¥	463,502		¥	+263,335
Other comprehensive income, net of tax –
Unrealized gains (losses) on securities			13,624			(5,771	)		–19,395
Unrealized losses on derivative instruments			(1,072	)		(611	)		+461
Pension liability adjustment			3,126			3,893			+767
Foreign currency translation adjustments			(21,052	)		(11,987	)		+9,065
Debt valuation adjustments	－					457			+457
Total comprehensive income			194,793			449,483			+254,690
Less - Comprehensive income attributable
to noncontrolling interests			16,475			4,588			–11,887
Comprehensive income attributable
to Sony Corporation’s stockholders		¥	178,318		¥	444,895		¥	+266,577

F-2

Consolidated Statements of Income
	(Millions of yen, except per share amounts)
	Six months ended September 30
	2019			2020			Change
Sales and operating revenue:
Net sales	¥	3,283,956		¥	3,228,445		¥	–55,511
Financial services revenue		709,909			817,023			+107,114
Other operating revenue		54,118			36,937			–17,181
		4,047,983			4,082,405			+34,422
Costs and expenses:
Cost of sales		2,218,018			2,198,661			–19,357
Selling, general and administrative		705,083			630,473			–74,610
Financial services expenses		624,671			726,044			+101,373
Other operating income, net		(5,961	)		(16,786	)		–10,825
		3,541,811			3,538,392			–3,419
Equity in net income of affiliated companies		3,708			2,146			–1,562
Operating income		509,880			546,159			+36,279
Other income:
Interest and dividends		10,758			5,356			–5,402
Gain on equity securities, net	－				85,493			+85,493
Other		3,155			2,797			–358
		13,913			93,646			+79,733
Other expenses:
Interest expenses		7,664			4,509			–3,155
Loss on equity securities, net		13,020		－				-13,020
Foreign exchange loss, net		8,949			8,744			–205
Other		1,048			7,029			+5,981
		30,681			20,282			–10,399
Income before income taxes		493,112			619,523			+126,411
Income taxes		126,939			(91,020	)		–217,959
Net income		366,173			710,543			+344,370
Less - Net income attributable to noncontrolling interests		26,164			17,658			–8,506
Net income attributable to Sony Corporation’s
stockholders	¥	340,009		¥	692,885		¥	+352,876
Per share data:
Net income attributable to Sony Corporation’s
stockholders
— Basic	¥	273.52		¥	565.97		¥	+292.45
— Diluted		267.65			554.82			+287.17

Consolidated Statements of Comprehensive Income
	(Millions of yen)
	Six months ended September 30
		2019			2020		Change
Net income	¥	366,173		¥	710,543		¥	+344,370
Other comprehensive income, net of tax –
Unrealized gains (losses) on securities		39,925			(37,882	)		–77,807
Unrealized losses on derivative instruments		(308	)		(871	)		–563
Pension liability adjustment		6,040			4,459			–1,581
Foreign currency translation adjustments		(63,750	)		(23,470	)		+40,280
Debt valuation adjustments	－				(1,193	)		–1,193
Total comprehensive income		348,080			651,586			+303,506
Less - Comprehensive income attributable
to noncontrolling interests		39,097			5,108			–33,989
Comprehensive income attributable
to Sony Corporation’s stockholders	¥	308,983		¥	646,478		¥	+337,495

F-3

Consolidated Statements of Cash Flows

		(Millions of yen)
		Six months ended September 30
		2019				2020
Cash flows from operating activities:
Net income	¥	366,173			¥	710,543
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization, including amortization of
deferred insurance acquisition costs and contract costs			189,939				187,728
Amortization of film costs			138,400				117,843
Accrual for pension and severance costs, less payments			(3,744	)			806
Other operating income, net			(5,961	)			(16,786	)
(Gain) loss on securities investments, net (other than financial services business)			12,939				(85,485	)
Gain on marketable securities and securities investments held in the financial
services business, net			(25,820	)			(220,776	)
Deferred income taxes			(17,978	)			(193,077	)
Equity in net (income) loss of affiliated companies, net of dividends			(924	)			1,502
Changes in assets and liabilities:
Increase in notes, accounts receivable, trade and contract assets			(144,399	)			(34,684	)
Increase in inventories			(144,148	)			(121,772	)
Increase in film costs			(176,002	)			(72,916	)
Increase in notes and accounts payable, trade			128,786				290,674
Increase in accrued income and other taxes			47,557				71,859
Increase in future insurance policy benefits and other			338,457				435,225
Increase in deferred insurance acquisition costs			(48,346	)			(45,460	)
Increase in marketable securities held in the life insurance business			(88,119	)			(91,971	)
Increase in other current assets			(33,747	)			(140,607	)
Decrease in other current liabilities			(167,023	)			(148,652	)
Other			44,445				(10,513	)
Net cash provided by operating activities			410,485				633,481
Cash flows from investing activities:
Payments for purchases of fixed assets			(179,778	)			(275,281	)
Proceeds from sales of fixed assets			10,611				10,024
Payments for investments and advances by financial services business			(681,965	)			(738,027	)
Payments for investments and advances
(other than financial services business)			(32,320	)			(81,959	)
Proceeds from sales or return of investments and collections of advances
by financial services business			138,242				189,301
Proceeds from sales or return of investments and collections of advances
(other than financial services business)			11,627				14,794
Proceeds from sales of businesses			7,864				1,605
Proceeds from sales of Olympus Corporation Shares			80,357			－
Other			14,147				(3,055	)
Net cash used in investing activities			(631,215	)			(882,598	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt			6,283				301,094
Payments of long-term debt			(186,103	)			(59,725	)
Increase in short-term borrowings, net			257,129				160,088
Proceeds from issuance of short-term (more than 3 months) borrowings in connection with
payment for purchase of noncontrolling interest in Sony Financial Holdings Inc.		－					322,500
Increase in deposits from customers in the financial services business, net			110,514				277,354
Dividends paid			(24,994	)			(30,448	)
Payments for purchase of treasury stock			(125,078	)			(106	)
Payment for purchase of noncontrolling interest in Sony Financial Holdings Inc.		－					(322,611	)
Other			(8,842	)			(11,334	)
Net cash provided by financing activities			28,909				636,812
Effect of exchange rate changes on cash and cash equivalents, including restricted			(26,029	)			(17,842	)
Net increase (decrease) in cash and cash equivalents, including restricted			(217,850	)			369,853
Cash and cash equivalents, including restricted, at beginning of the fiscal year			1,473,813				1,515,295
Cash and cash equivalents, including restricted, at end of the period			1,255,963				1,885,148
Less - restricted cash and cash equivalents, included in other current assets and
other assets			3,094				780
Cash and cash equivalents at end of the period		¥	1,252,869			¥	1,884,368

F-4

Notes to Consolidated Financial Statements

Business Segment Information

(Business Segments)

					(Millions of yen)
			Three months ended September 30
Sales and operating revenue			2019			2020			Changes
	Game & Network Services
	Customers	¥	438,046		¥	494,544		¥	+56,498
	Intersegment		16,344			12,094			–4,250
	Total		454,390			506,638			+52,248
	Music
	Customers		216,742			228,419			+11,677
	Intersegment		2,533			2,449			–84
	Total		219,275			230,868			+11,593
	Pictures
	Customers		260,387			191,975			–68,412
	Intersegment		217			358			+141
	Total		260,604			192,333			–68,271
	Electronics Products & Solutions
	Customers		486,311			500,683			+14,372
	Intersegment		7,188			3,975			–3,213
	Total		493,499			504,658			+11,159
	Imaging & Sensing Solutions
	Customers		285,579			283,954			–1,625
	Intersegment		25,145			23,130			–2,015
	Total		310,724			307,084			–3,640
	Financial Services
	Customers		375,089			372,107			–2,982
	Intersegment		2,092			1,838			–254
	Total		377,181			373,945			–3,236
	All Other
	Customers		57,943			40,342			–17,601
	Intersegment		10,954			8,859			–2,095
	Total		68,897			49,201			–19,696
	Corporate and elimination		(62,311	)		(51,241	)		+11,070
	Consolidated total	¥	2,122,259		¥	2,113,486		¥	–8,773
	Game & Network Services (“G&NS”) intersegment amounts primarily consist of transactions with All Other.
	Imaging & Sensing Solutions (“I&SS”) intersegment amounts primarily consist of transactions with the G&NS segment and the Electronics Products & Solutions (“EP&S”) segment.
	All Other intersegment amounts primarily consist of transactions with the G&NS segment, the Music segment and the Pictures segment.
	Corporate and elimination includes certain brand and patent royalty income.

		(Millions of yen)
		Three months ended September 30
Operating income (loss)			2019			2020		Change
	Game & Network Services	¥	64,987		¥	104,932		¥	+39,945
	Music		37,480			52,851			+15,371
	Pictures		39,318			31,751			–7,567
	Electronics Products & Solutions		41,387			53,998			+12,611
	Imaging & Sensing Solutions		76,378			49,835			-26,543
	Financial Services		38,779			43,718			+4,939
	All Other		2,434			3,191			+757
	Total		300,763			340,276			+39,513
	Corporate and elimination		(21,808	)		(22,512	)		–704
	Consolidated total	¥	278,955		¥	317,764		¥	+38,809
	Operating income (loss) is sales and operating revenue less costs and expenses, and includes equity in net income (loss) of affiliated companies.

F-5

(Business Segments)

		(Millions of yen)
		Six months ended September 30
Sales and operating revenue		2019			2020			Change
	Game & Network Services
	Customers	¥	879,796		¥	1,093,593		¥	+213,797
	Intersegment		32,055			19,154			–12,901
	Total		911,851			1,112,747			+200,896
	Music
	Customers		416,780			402,154			–14,626
	Intersegment		4,748			5,829			+1,081
	Total		421,528			407,983			–13,545
	Pictures
	Customers		446,146			366,416			–79,730
	Intersegment		546			1,006			+460
	Total		446,692			367,422			–79,270
	Electronics Products & Solutions
	Customers		966,967			828,076			–138,891
	Intersegment		10,447			8,428			–2,019
	Total		977,414			836,504			–140,910
	Imaging & Sensing Solutions
	Customers		496,754			482,325			–14,429
	Intersegment		44,648			30,945			–13,703
	Total		541,402			513,270			–28,132
	Financial Services
	Customers		709,909			817,023			+107,114
	Intersegment		4,207			3,682			525
	Total		714,116			820,705			+106,589
	All Other
	Customers		118,575			86,439			–32,136
	Intersegment		19,913			16,857			-–3,056
	Total		138,488			103,296			–35,192
	Corporate and elimination		(103,508	)		(79,522	)		+23,986
	Consolidated total	¥	4,047,983		¥	4,082,405		¥	+34,422
	G&NS intersegment amounts primarily consist of transactions with All Other.
	I&SS intersegment amounts primarily consist of transactions with the G&NS segment and the EP&S segment.
	All Other intersegment amounts primarily consist of transactions with the G&NS segment, the Music segment and the Pictures segment.
	Corporate and elimination includes certain brand and patent royalty income.

		(Millions of yen)
		Six months ended September 30
Operating income (loss)				2019			2020		Change
	Game & Network Services		¥	138,791		¥	228,969		¥	+90,178
	Music			75,757			87,743			+11,986
	Pictures			39,694			56,493			+16,799
	Electronics Products & Solutions			66,453			44,877			–21,576
	Imaging & Sensing Solutions			125,906			75,261			-50,645
	Financial Services			84,884			90,921			+6,037
	All Other			(168	)		6,723			+6,891
	Total			531,317			590,987			+59,670
	Corporate and elimination			(21,437	)		(44,828	)		–23,391
	Consolidated total		¥	509,880		¥	546,159		¥	+36,279
	Operating income (loss) is sales and operating revenue less costs and expenses, and includes equity in net income (loss) of affiliated companies.

F-6

(Sales to Customers by Product Category)

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

		(Millions of yen)
		Three months ended September 30
Sales and operating revenue (to external customers)		2019		2020		Change
	Game & Network Services
	Digital Software and Add-on Content	¥	226,889	¥	297,061	¥	+70,172
	Network Services		84,377		95,897		+11,520
	Hardware and Others		126,780		101,586		–25,194
	Total		438,046		494,544		+56,498
	Music
	Recorded Music - Streaming		66,797		78,827		+12,030
	Recorded Music - Others		45,405		44,497		–908
	Music Publishing		38,407		37,560		–847
	Visual Media and Platform		66,133		67,535		+1,402
	Total		216,742		228,419		+11,677
	Pictures
	Motion Pictures		140,371		91,161		–49,210
	Television Productions		61,546		50,936		–10,610
	Media Networks		58,470		49,878		–8,592
	Total		260,387		191,975		–68,412
	Electronics Products & Solutions
	Televisions		166,479		204,618		+38,139
	Audio and Video		83,754		83,887		+133
	Still and Video Cameras		99,606		90,237		–9,369
	Mobile Communications		77,714		79,140		+1,426
	Other		58,758		42,801		-15,957
	Total		486,311		500,683		+14,372
	Imaging & Sensing Solutions		285,579		283,954		–1,625
	Financial Services		375,089		372,107		–2,982
	All Other		57,943		40,342		–17,601
	Corporate		2,162		1,462		-700
	Consolidated total	¥	2,122,259	¥	2,113,486	¥	–8,773
	Sony has realigned its product category configuration in regard to the segmentation change. For further details, refer to Accounting Policies and Other Information in the Notes to Consolidated Financial Statements. Sony has also realigned its product category configuration in the Music segment with a more detailed breakdown in Recorded Music from the fourth quarter of the fiscal year ended March 31, 2020. In connection with these realignments, all prior period sales amounts by product category in the table above have been reclassified to conform to the current presentation.
	In the G&NS segment, Digital Software and Add-on Content includes distribution of software titles and add-on content through network by Sony Interactive Entertainment; Network Services includes network services relating to game, video and music content; Hardware and Others includes home and portable game consoles, packaged software and peripheral devices. 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, including game applications based on the animation titles, and various service offerings for music and visual products. In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of motion pictures and direct-to-video content; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks worldwide. In the EP&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.
	Within the EP&S segment, the operating loss of Mobile Communications for the fiscal years ended March 31, 2019 and 2020 was (97,136) million yen and (21,057) million yen, respectively. In addition, the operating loss for the three months ended March 31, 2019 and 2020 was (41,062) million yen and (29,696) million yen, respectively.

F-7

(Sales to Customers by Product Category)

		(Millions of yen)
		Six months ended September 30
Sales and operating revenue (to external customers)		2019		2020		Change
	Game & Network Services
	Digital Software and Add-on Content	¥	442,853	¥	691,698	¥	+248,845
	Network Services		167,983		189,192		+21,209
	Hardware and Others		268,960		212,703		–56,257
	Total		879,796		1,093,593		+213,797
	Music
	Recorded Music – Streaming		133,279		147,727		+14,448
	Recorded Music – Others		90,885		73,683		–17,202
	Music Publishing		77,697		68,656		–9,041
	Visual Media and Platform		114,919		112,088		–2,831
	Total		416,780		402,154		–14,626
	Pictures
	Motion Pictures		221,241		156,238		–65,003
	Television Productions		108,032		115,239		+7,207
	Media Networks		116,873		94,939		–21,934
	Total		446,146		366,416		–79,730
	Electronics Products & Solutions
	Televisions		314,240		311,186		–3,054
	Audio and Video		162,497		130,968		–31,529
	Still and Video Cameras		199,860		136,642		–63,218
	Mobile Communications		178,264		173,369		–4,895
	Other		112,106		75,911		–36,195
	Total		966,967		828,076		–138,891
	Imaging & Sensing Solutions		496,754		482,325		–14,429
	Financial Services		709,909		817,023		+107,114
	All Other		118,575		86,439		–32,136
	Corporate		13,056		6,379		–6,677
	Consolidated total	¥	4,047,983	¥	4,082,405	¥	+34,422
	Sony has realigned its product category configuration in the Music segment with a more detailed breakdown in Recorded Music from the fourth quarter of the fiscal year ended March 31, 2020. In connection with the realignment, all prior period sales amounts by product category in the table above have been reclassified to conform to the current presentation.
	In the G&NS segment, Digital Software and Add-on Content includes distribution of software titles and add-on content through 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 and peripheral devices. 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, including game applications based on the animation titles, 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 EP&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.
	Within the EP&S segment, the operating income of Mobile Communications for the three months ended September 30, 2019 and 2020 was 635 million yen and 9,458 million yen, respectively. In addition, the operating income of Mobile Communications for the six months ended September 30, 2019 and 2020 was 1,674 million yen and 20,494 million yen, respectively.

F-8

(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 accounting principles generally accepted in the United States of America (“U.S. GAAP”), which is used by Sony to prepare its 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 consolidated financial statements.  Both financial statements include transactions between the Financial Services segment and Sony without the Financial Services segment (including noncontrolling interests) and the figures shown in the respective presentations are before the elimination and offsetting of such transactions and deferred tax assets and deferred tax liabilities of each.  Such intercompany balances are eliminated and/or offset in the consolidated financial statements.

Condensed Balance Sheets
					(Millions of yen)
	Financial Services				Sony without Financial Services				Consolidated
	March 31		September 30		March 31		September 30		March 31		September 30
	2020		2020		2020		2020		2020		2020
ASSETS
Current assets:
Cash and cash equivalents	¥	550,039	¥	608,526	¥	962,318	¥	1,275,842	¥	1,512,357	¥	1,884,368
Marketable securities		1,847,772		2,540,460	–		–			1,847,772		2,540,460
Notes and accounts receivable, trade and contract assets		10,532		15,316		999,976		1,023,234		1,002,920		1,021,896
Inventories	–		–			589,969		681,685		589,969		681,685
Other receivables		73,117		53,245		115,100		262,820		188,106		315,989
Prepaid expenses and other current assets		181,247		175,736		413,496		363,335		594,021		538,298
Total current assets		2,662,707		3,393,283		3,080,859		3,606,916		5,735,145		6,982,696
Film costs	–		–			427,336		401,499		427,336		401,499
Investments and advances		12,457,977		12,919,534		351,936		537,604		12,734,132		13,382,138
Investments in Financial Services, at cost	–		–			153,968		550,666	–		–
Property, plant and equipment		18,247		19,223		890,640		923,413		908,644		942,380
Other assets:
Right-of-use assets		58,897		69,570		333,753		321,890		392,610		391,430
Intangibles, net		49,871		48,848		856,439		850,433		906,310		899,281
Goodwill		10,834		10,834		773,054		767,463		783,888		778,297
Deferred insurance acquisition costs		600,901		627,893	–		–			600,901		627,893
Deferred income taxes		10,365		1,081		200,021		318,463		210,372		197,279
Other		38,949		35,410		305,028		317,478		340,005		348,920
		769,817		793,636		2,468,295		2,575,727		3,234,086		3,243,100
Total assets	¥	15,908,748	¥	17,125,676	¥	7,373,034	¥	8,595,825	¥	23,039,343	¥	24,951,813
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	758,737	¥	939,912	¥	81,246	¥	473,720	¥	839,983	¥	1,413,632
Short-term operating lease liabilities		9,363		9,377		59,595		64,220		68,942		73,585
Notes and accounts payable, trade	–		–			380,810		669,611		380,810		669,611
Accounts payable, other and accrued expenses		40,457		35,223		1,591,072		1,499,412		1,630,197		1,533,438
Accrued income and other taxes		22,825		23,809		123,171		138,257		145,996		162,066
Deposits from customers in the banking business		2,440,783		2,655,330	–		–			2,440,783		2,655,330
Other		226,455		543,706		514,368		479,747		733,732		1,007,147
Total current liabilities		3,498,620		4,207,357		2,750,262		3,324,967		6,240,443		7,514,809
Long-term debt		240,143		283,935		398,793		465,615		634,966		745,581
Long-term operating lease liabilities		41,192		38,001		273,668		261,851		314,836		299,834
Accrued pension and severance costs		34,211		34,388		290,444		282,069		324,655		316,457
Deferred income taxes		391,883		367,032		173,022		96,305		549,538		325,939
Future insurance policy benefits and other		6,246,047		6,420,438	–		–			6,246,047		6,420,438
Policyholders’ account in the life insurance business		3,642,271		3,967,126	–		–			3,642,271		3,967,126
Other		21,843		20,793		289,574		281,705		289,285		281,117
Total liabilities		14,116,210		15,339,070		4,175,763		4,712,512		18,242,041		19,871,301
Redeemable noncontrolling interest	–		–			7,767		7,674		7,767		7,674
Equity:
Stockholders’ equity of Financial Services		1,790,333		1,784,144	–		–		–		–
Stockholders’ equity of Sony without Financial Services	–		–			3,159,071		3,835,764	–		–
Sony Corporation’s stockholders’ equity	–		–		–		–			4,125,306		5,030,501
Noncontrolling interests		2,205		2,462		30,433		39,875		664,229		42,337
Total equity		1,792,538		1,786,606		3,189,504		3,875,639		4,789,535		5,072,838
Total liabilities and equity	¥	15,908,748	¥	17,125,676	¥	7,373,034	¥	8,595,825	¥	23,039,343	¥	24,951,813

F-9

Condensed Statements of Income
							(Millions of yen)
	Three months ended September 30
	Financial Services						Sony without Financial Services						Consolidated
	2019			2020			2019			2020			2019			2020
Financial services revenue	¥	377,181		¥	373,945		¥	–		¥	–		¥	375,089		¥	372,107
Net sales and operating revenue	–			–				1,749,121			1,742,844			1,747,170			1,741,379
		377,181			373,945			1,749,121			1,742,844			2,122,259			2,113,486
Cost of sales	–			–				1,160,099			1,148,740			1,156,980			1,145,988
Selling, general and administrative	–			–				353,760			328,028			354,916			329,307
Financial services expenses		338,273			330,223		–			–				336,178			328,385
Other operating (income) expenses, net		8			4			(2,426	)		(5,542	)		(2,404	)		(5,538	)
		338,281			330,227			1,511,433			1,471,226			1,845,670			1,798,142
Equity in net income (loss) of affiliated companies		(121	)	–				2,487			2,420			2,366			2,420
Operating income		38,779			43,718			240,175			274,038			278,955			317,764
Other income (expenses), net		(45	)		(22	)		(16,815	)		(18,139	)		(16,861	)		(18,160	)
Income before income taxes		38,734			43,696			223,360			255,899			262,094			299,604
Income taxes		10,753			9,885			51,174			(174,008	)		61,927			(163,898	)
Net income		27,981			33,811			172,186			429,907			200,167			463,502
Less - Net income attributable to noncontrolling interests		87			182			2,448			185			12,280			3,868
Net income of Financial Services	¥	27,894		¥	33,629		¥	–		¥	–		¥	–		¥	–
Net income of Sony without Financial Services	¥	–		¥	–		¥	169,738		¥	429,722		¥	–		¥	–
Net income attributable to Sony Corporation's stockholders	¥	–		¥	–		¥	–		¥	–		¥	187,887		¥	459,634

	Six months ended September 30
	Financial Services						Sony without Financial Services						Consolidated
		2019			2020			2019			2020			2019			2020
Financial services revenue	¥	714,116		¥	820,705		¥			¥	–		¥	709,909		¥	817,023
Net sales and operating revenue	–			–				3,341,464			3,268,324			3,338,074			3,265,382
		714,116			820,705			3,341,464			3,268,324			4,047,983			4,082,405
Cost of sales	–			–				2,223,968			2,204,055			2,218,018			2,198,661
Selling, general and administrative	–			–				702,537			628,040			705,083			630,473
Financial services expenses		628,879			729,726		–			–				624,671			726,044
Other operating (income) expenses, net		44			58			(6,019	)		(16,844	)		(5,961	)		(16,786	)
		628,923			729,784			2,920,486			2,815,251			3,541,811			3,538,392
Equity in net income (loss) of affiliated companies		(309	)	–				4,017			2,146			3,708			2,146
Operating income		84,884			90,921			424,995			455,219			509,880			546,159
Other income (expenses), net		(91	)		(42	)		1,015			93,220			(16,768	)		73,364
Income before income taxes		84,793			90,879			426,010			548,439			493,112			619,523
Income taxes		24,735			23,072			102,204			(114,313	)		126,939			(91,020	)
Net income		60,058			67,807			323,806			662,752			366,173			710,543
Less - Net income attributable to noncontrolling interests		173			257			5,072			2,049			26,164			17,658
Net income of Financial Services	¥	59,885		¥	67,550		¥	–		¥	–		¥	–		¥	–
Net income of Sony without Financial Services	¥	–		¥	–		¥	318,734		¥	660,703		¥	–		¥	–
Net income attributable to Sony Corporation's stockholders	¥	–		¥	–		¥	–		¥	–		¥	340,009		¥	692,885

F-10

Condensed Statements of Cash Flows
							(Millions of yen)
	Six months ended September 30
	Financial Services						Sony without Financial Services						Consolidated
	2019			2020			2019			2020			2019			2020
Cash flows from operating activities:
Net income (loss)	¥	60,058		¥	67,807		¥	323,806		¥	662,752		¥	366,173		¥	710,543
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization, including amortization of deferred insurance acquisition costs and contract costs		45,235			25,758			144,704			161,970			189,939			187,728
Amortization of film costs	–			–				138,400			117,843			138,400			117,843
Other operating (income) expenses, net		44			58			(6,019	)		(16,844	)		(5,961	)		(16,786	)
(Gain) loss on marketable securities and securities investments, net		(25,820	)		(220,776	)		12,939			(85,485	)		(12,881	)		(306,261	)
Changes in assets and liabilities:
(Increase) decrease in notes, accounts receivable, trade and contract assets		914			(4,784	)		(145,747	)		(38,967	)		(144,399	)		(34,684	)
(Increase) decrease in inventories	–			–				(144,148	)		(121,772	)		(144,148	)		(121,772	)
(Increase) decrease in film costs	–			–				(176,002	)		(72,916	)		(176,002	)		(72,916	)
Increase (decrease) in notes and accounts payable, trade	–			–				128,786			290,674			128,786			290,674
Increase (decrease) in future insurance policy benefits and other		338,457			435,225		–			–				338,457			435,225
(Increase) decrease in deferred insurance acquisition costs		(48,346	)		(45,460	)	–			–				(48,346	)		(45,460	)
(Increase) decrease in marketable securities held in the life insurance business		(88,119	)		(91,971	)	–			–				(88,119	)		(91,971	)
Other		55,679			(6,044	)		(187,001	)		(403,742	)		(131,414	)		(418,682	)
Net cash provided by (used in) operating activities		338,102			159,813			89,718			493,513			410,485			633,481
Cash flows from investing activities:
Payments for purchases of fixed assets		(9,379	)		(9,653	)		(170,398	)		(265,659	)		(179,778	)		(275,281	)
Payments for investments and advances		(681,965	)		(738,027	)		(32,320	)		(81,959	)		(714,285	)		(819,986	)
Proceeds from sales or return of investments and collections of advances		138,242			189,301			91,984			14,794			230,226			204,095
Other		64			9			32,571			8,565			32,622			8,574
Net cash provided by (used in) investing activities		(553,038	)		(558,370	)		(78,163	)		(324,259	)		(631,215	)		(882,598	)
Cash flows from financing activities:
Increase (decrease) in borrowings, net		158,510			210,147			(80,880	)		513,811			77,309			723,957
Increase (decrease) in deposits from customers, net		110,514			277,354		–			–				110,514			277,354
Dividends paid		(27,189	)		(30,454	)		(24,994	)		(30,448	)		(24,994	)		(30,448	)
Other		62			(3	)		(124,463	)		(323,409	)		(133,920	)		(334,051	)
Net cash provided by (used in) financing activities		241,897			457,044			(230,337	)		159,954			28,909			636,812
Effect of exchange rate changes on cash and cash equivalents	–			–				(26,029	)		(17,842	)		(26,029	)		(17,842	)
Net increase (decrease) in cash and cash equivalents, including restricted		26,961			58,487			(244,811	)		311,366			(217,850	)		369,853
Cash and cash equivalents, including restricted, at beginning of the fiscal year		509,595			550,039			964,218			965,256			1,473,813			1,515,295
Cash and cash equivalents, including restricted,at end of the period		536,556			608,526			719,407			1,276,622			1,255,963			1,885,148
Less - restricted cash and cash equivalents, included in other current assets and other assets	–			–				3,094			780			3,094			780
Cash and cash equivalents at end of the period	¥	536,556		¥	608,526		¥	716,313		¥	1,275,842		¥	1,252,869		¥	1,884,368

F -11

Significant Changes in Shareholders' Equity

Completion of Making Sony Financial Holdings Inc. a Wholly-owned Subsidiary

In the quarter ended September 30, 2020, Sony Corporation acquired all the common shares and the related stock acquisition rights not held by Sony of Sony Financial Holdings Inc. (“SFH”), a consolidated subsidiary of Sony Corporation, and SFH has become a wholly-owned subsidiary of Sony Corporation.  Consideration for this acquisition is 396,698 million yen.  The net difference between the consideration, the decrease in the carrying amount of the noncontrolling interests of 622,364 million yen and the increase in accumulated other comprehensive income of 30,203 million yen was recognized as an increase to additional paid-in capital of 195,463 million yen.  In order to procure the funds necessary to pay the consideration, in addition to the 322,500 million yen of borrowing in July 2020, Sony Corporation borrowed an additional 74,000 million yen from a Japanese private bank in October 2020.

Accounting Policies and Other Information

(Recently adopted accounting pronouncements)

Measurement of credit losses on financial instruments

In June 2016, the Financial Accounting Standards Board (“FASB”) issuedAccounting Standards Update (“ASU”) 2016-13, which amends the accounting guidance for credit losses on financial instruments.  The ASU requires the consideration of all available relevant information when estimating expected credit losses, including past events, current conditions and forecasts and their implications for expected credit losses.  This ASU was effective for Sony as of April 1, 2020.  The adoption of this ASU did not have a material impact on Sony’s results of operations and financial position.

Improvements to Accounting for Costs of Films and License Agreements for Program Materials

In March 2019, the FASB issued ASU 2019-02, which updates the guidance for the capitalization of film costs associated with episodic television series, requires the use of fair value rather than net realizable value when determining potential impairments of broadcasting rights, and modifies the presentation and disclosure requirements for films and broadcasting rights.  In addition, upon capitalization of film costs entities are required to determine qualitatively whether the predominant monetization strategy is on a title-by-title basis or together with other films and/or broadcast rights as part of a film group, such as in the case of a release of a film as part of a library of content on a streaming service.  In the case of a film group, impairments are evaluated at the overall film group level rather than the individual title level.  This ASU was effective for Sony as of April 1, 2020 and was applied on a prospective basis.  Upon adoption, Sony reclassified broadcasting rights in the Pictures segment and animation film production costs in the Music segment included in inventories to film costs.

F -12

Changes to the opening balances resulting from the adoption of the above ASUs were as follows:

	Yen in millions
				Impact of Adoption
	March 31,												April 1,
	2020			ASU 2016-13			ASU 2019-02			Total			2020
ASSETS
Current assets:
Notes and accounts receivable, trade and contract   assets		1,028,793			-			-			-			1,028,793
Allowance for credit losses *		(25,873	)		(280	)		-			(280	)		(26,153	)
Inventories		589,969			-			(31,517	)		(31,517	)		558,452
Other receivables		188,106			(30	)		-			(30	)		188,076
Prepaid expenses and other current assets		594,021			(12	)		-			(12	)		594,009
Total current assets		5,735,145			(322	)		(31,517	)		(31,839	)		5,703,306
Film costs		427,336			-			31,517			31,517			458,853
Investments and advances:
Securities investments and other		12,526,210			780			-			780			12,526,990
Allowance for credit losses		-			(6,341	)		-			(6,341	)		(6,341	)
Total investments and advances		12,734,132			(5,561	)		-			(5,561	)		12,728,571
Other assets:
Deferred income taxes		210,372			45			-			45			210,417
Other		340,005			(721	)		-			(721	)		339,284
Total other assets		3,234,086			(676	)		-			(676	)		3,233,410
Total assets		23,039,343			(6,559	)		-			(6,559	)		23,032,784
LIABILITIES
Deferred income taxes		549,538			(1,504	)		-			(1,504	)		548,034
Total liabilities		18,242,041			(1,504	)		-			(1,504	)		18,240,537
EQUITY
Sony Corporation’s stockholders’ equity:
Retained earnings		2,768,856			(3,669	)		-			(3,669	)		2,765,187
Total Sony Corporation’s stockholders’ equity		4,125,306			(3,669	)		-			(3,669	)		4,121,637
Noncontrolling interests		664,229			(1,386	)		-			(1,386	)		662,843
Total equity		4,789,535			(5,055	)		-			(5,055	)		4,784,480
Total liabilities and equity		23,039,343			(6,559	)		-			(6,559	)		23,032,784

* Under ASU 2016-13, Sony changed the presentation from “Allowance for doubtful accounts” to “Allowance for credit losses” on the consolidatedbalance sheets.

(Number of Consolidated Subsidiaries and Affiliated Companies)

As of September 30, 2020, Sony had 1,393 consolidated subsidiaries (including variable interest entities) and 135 affiliated companies accounted for under the equity method.

(Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)

	(Thousands of shares)
	Three months ended September 30
Net income attributable to Sony Corporation’s stockholders	2019		2020
— Basic		1,237,011		1,227,845
— Diluted		1,264,427		1,249,629

	(Thousands of shares)
	Six months ended September 30
Net income attributable to Sony Corporation’s stockholders	2019		2020
— Basic		1,243,086		1,224,237
— Diluted		1,270,343		1,248,856

The dilutive effect in the weighted-average number of outstanding shares for the three and six months ended September 30, 2019 and 2020 primarily resulted from convertible bonds which were issued in July 2015.

F -13

(Segmentation)

The G&NS segment includes network services businesses, the manufacture and sales of home gaming products and 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 EP&S segment includes the Televisions business, the Audio and Video business, the Still and Video Cameras business, the　smartphone business and 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 a bank 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.

(Accounting Methods Used Specifically for Interim Consolidated Financial Statements)

Income Taxes -

Sony estimates the annual effective tax rate (“ETR”) derived from a projected annual net income before taxes and calculates the interim period income tax provision based on the year-to-date income tax provision computed by applying the ETR to the year-to-date net income before taxes at the end of each interim period.  The income tax provision based on the ETR reflects anticipated income tax credits and net operating loss carryforwards; however, it excludes the income tax provision related to significant unusual or infrequent items.  Such income tax provision is separately reported from the provision based on the ETR in the interim period in which it occurs.

(Reclassifications)

Certain reclassifications of the financial statements and accompanying footnotes for the three and six months ended September 30, 2019 have been made to conform to the presentation for the three and six months ended September 30, 2020.

(Reversal of valuation allowances for deferred tax assets of Sony Corporation and its national tax filing group in Japan)

Sony provides a valuation allowance for its deferred tax assets, which includes temporary differences, net operating losses and tax credits, when it is more likely than not that some portion, or all, of its deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the relevant tax jurisdiction.　Despite the spread of COVID-19, as a result of the acquisition of SFH, the taxable income of Sony Corporation and its national tax filing group has increased and is expected to be stable going forward.  Based on an assessment of the available positive and negative evidence, in particular recent profit history and forecasted profitability, in the quarter ended September 30, 2020, Sony reversed the valuation allowances recorded against a significant portion of the deferred tax assets in Japan, primarily for temporary differences and certain net operating losses.  As a result, Sony recorded a tax benefit of 214,900 million yen in the quarter ended September 30, 2020. Valuation allowances continue to be recorded on the remaining Japan deferred tax assets, primarily foreign tax credits, due to restrictions on the use of such assets and their relatively short remaining carryforward periods.

F -14

Outlook for the Fiscal Year Ending March 31, 2021

The forecast for consolidated results for the fiscal year ending March 31, 2021, as announced on August 4, 2020, has been revised as follows:

	(Billions of yen)
	March 31, 2020 Results	August Forecast		October Forecast		Change from August Forecast
Sales and operating revenue	¥8,259.9		¥8,300		¥8,500	+¥200 billion	+2.4	%
Operating income	845.5		620		700	+¥80 billion	+12.9	%

Income before income taxes	799.5	685	765	+¥80 billion	+11.7	%
Net income attributable to Sony Corporation’s stockholders	582.2	510	800	+¥290 billion	+56.9	%

For all segments excluding the Financial Services segment *	March 31, 2020 Results	August Forecast		October Forecast		Change from August Forecast
Net cash provided by operating activities	¥762.9		550		630	+¥80 billion	+14.5	%

* Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with U.S. GAAP.  However, Sony believes that this disclosure may be useful information to investors.  Please refer to page F-9 for details about the preparation of the Condensed Statements of Cash Flows.

Assumed foreign exchange rates are the following:

	Assumed foreign exchange rates for the six months ending March 31, 2021	(For your reference)
		Assumed foreign exchange rates for the fiscal year ending March 31, 2021 at the time of the August forecast
1 U.S. dollar	approximately 105 yen	approximately 107 yen
1 Euro	approximately 123 yen	approximately 120 yen

Consolidated sales and operating revenue (“sales”) for the fiscal year ending March 31, 2021 are expected to be higher than the August forecast due to higher-than-expected sales in the Game & Network Services (“G&NS”), Music and Financial Services segments, partially offset by lower-than-expected sales in the Imaging & Sensing Solutions (“I&SS”) segment.

Consolidated operating income is expected to be higher than the August forecast due to expected increases in operating income in all segments except for the I&SS segment, as well as an expected decrease in operating loss in All Other, Corporate and elimination.

Restructuring charges for the Sony Group are expected to increase by 2 billion yen compared to the August forecast to approximately 27 billion yen, compared to 25 billion yen in the fiscal year ended March 31, 2020.  Restructuring charges are recorded as an operating expense and are included in the forecast for operating income.

Income before income taxes is expected to be 765 billion yen, which is higher than the August forecast.  This expected increase is primarily due to the above-mentioned expected increase in operating income.

Net income attributable to Sony Corporation’s stockholders is expected to be higher than the August forecast due to the above-mentioned expected increase in income before income taxes, as well as the reversal of valuation allowances recorded against a significant portion of the deferred tax assets of Sony Corporation and its national tax filing group in Japan, resulting in a tax benefit in the quarter ended September 30, 2020.

The forecast for each business segment for the fiscal year ending March 31, 2021 has been revised as follows:

	(Billions of yen)
	March 31, 2020 Results		August Forecast		October Forecast
Game & Network Services (G&NS)
Sales and operating revenue	¥1,977.6		¥2,500		¥2,600
Operating income	238.4		240		300
Music
Sales and operating revenue	849.9		790		850
Operating income	142.3		130		152
Pictures
Sales and operating revenue	1,011.9		760		760
Operating income	68.2		41		48
Electronics Products & Solutions (EP&S)
Sales and operating revenue	1,991.3		1,870		1,870
Operating income	87.3		60		67
Imaging & Sensing Solutions (I&SS)
Sales and operating revenue	1,070.6		1,000		960
Operating income	235.6		130		81
Financial Services
Financial services revenue	1,307.7		1,400		1,460
Operating income	129.6		142		155
All Other, Corporate and elimination
Operating loss	(55.9	)	(123	)	(103	)
Consolidated
Sales and operating revenue	8,259.9		8,300		8,500
Operating income	845.5		620		700

Game & Network Services (G&NS)

Sales are expected to be higher than the August forecast primarily due to higher-than-expected sales of game software, primarily add-on content.  Operating income is expected to be significantly higher than the August forecast due to the above-mentioned expected increase in game software sales and an increase in PlayStation®Plus sales.

Regarding the impact from the spread of COVID-19, Sony is aware that there have been delays in the development of some third-party software titles due to constraints such as working from home.  However, necessary measures are being taken and preparations are underway with the aim of ensuring that many strong titles can be released from Sony’s first-party studios and its partners’ studios in connection with the launch of PlayStation®5.

Music

Sales are expected to be higher than the August forecast primarily due to an expected increase in streaming revenues in Recorded Music, in addition to the expected strong performance of game applications for mobile devices and an expected increase in anime business sales in Visual Media and Platform.  Operating income is expected to be higher than the August forecast primarily due to the impact of the above-mentioned expected increase in sales.

Regarding the impact from the spread of COVID-19, the release of some new music is being delayed around the world despite a gradual recovery in music recording, as a portion of artists are still unable to record songs and music videos and carry out promotional activities.  Ticket and merchandising revenues are also decreasing, as concerts and other events are being restricted in Japan and other areas.  Due to a global reduction in advertising spending, revenue from the licensing of music in TV commercials is decreasing.  Although it also has been impacted by the reduction in advertising spending, revenue from advertising-supported streaming services is beginning to show signs of recovery due to a gradual recovery in advertising spending.

Pictures

Sales are expected to remain unchanged from the August forecast, mainly due to higher-than-expected home entertainment and television licensing sales in Motion Pictures and a higher-than-expected recovery of advertising sales in Media Networks, substantially offset by delays in theatrical releases due to theater closures resulting from the impact of COVID-19.  Operating income is expected to be higher than the August forecast primarily due to higher-than-expected home entertainment and television licensing sales in Motion Pictures.

Regarding the impact from the spread of COVID-19, although some movie theaters are reopening around the world, a large number are still closed or must limit the number of patrons, leading to box office revenue around the world being negatively impacted.  For this reason, Sony generally has not been able to release most of its already completed films in theaters.  Although the production of new motion pictures and television shows by Sony has gradually resumed, the production schedule is significantly delayed.  As a result, in Motion Pictures, theatrical revenues and revenues generated after theatrical release, including home entertainment and television licensing sales, are expected to be significantly lower than the prior fiscal year.  Television Production revenues are also expected to be significantly impacted by the production delays.  Due to a global reduction in advertising spending, advertising revenue in Media Networks has decreased significantly compared to the prior fiscal year, especially in India.  However, advertising revenue has recovered more quickly than expected in some territories due to the gradual recovery of advertising spending.  Further improvement in advertising revenue is dependent upon the speed of economic recovery around the world.

Electronics Products & Solutions (EP&S)

Sales are expected to remain unchanged from the August forecast.  Operating income is expected to be higher than the August forecast primarily due to the positive impact of foreign exchange rates.

This segment has been significantly impacted by COVID-19, but profitability has improved due to the gradual recovery in consumer demand and reductions in operating costs.

Imaging & Sensing Solutions (I&SS)

Sales are expected to be lower than the August forecast primarily due to a decrease in sales of image sensors for mobile products, partially offset by an increase in sales of image sensors for digital cameras as well as an increase in sales in businesses other than image sensors, such as analog LSIs (large-scale integration systems).  Operating income is expected to be lower than the August forecast primarily due to the impact of the above-mentioned expected decrease in sales, the recording of 17.5 billion yen in inventory write-downs of certain image sensors for mobile products in the quarter ended September 30, 2020 and the negative impact of foreign exchange rates.

Financial Services

Financial services revenue is expected to be higher than the August forecast primarily due to an increase in net gains on investments in the separate accounts at Sony Life Insurance Co., Ltd. (“Sony Life”).  Operating income is expected to be higher than the August forecast primarily due to a decline in the loss ratio for automobile insurance at Sony Assurance Inc. (“Sony Assurance”), as well as an improvement in valuation gains and losses on securities at Sony Bank Inc. (“Sony Bank”).

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 for each segment 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, Sony/ATV Music Publishing LLC and EMI Music Publishing Ltd., 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 Holdings Inc. (“SFH”) and SFH’s consolidated subsidiaries such as Sony Life, Sony Assurance and Sony Bank.  The results discussed in the Financial Services segment differ from the results that SFH discloses separately on a Japanese statutory basis.

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, 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 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.