Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k)

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 APRIL 2021

Commission File Number: 001-06439

SONY GROUP CORPORATION

(Translation of registrant's name into English)

1-7-1 KONAN, MINATO-KU, TOKYO, 108-0075, JAPAN

(Address of principal executive offices)

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

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F,

Form 20-F X

Form 40-F __

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, Yes No X

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-______

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SONY GROUP CORPORATION
	(Registrant)


	By: /s/ Hiroki Totoki
	(Signature)
	Hiroki Totoki
	Executive Deputy President and
	Chief Financial Officer

Date: April 28, 2021

List of materials

Documents attached hereto:

i) Press release: Financial Statements and Consolidated Financial Results for the Fiscal Year Ended March 31, 2021 And Outlook for the Fiscal Year Ending March 31, 2022

Financial Statements and Consolidated Financial Results

for the Fiscal Year Ended March 31, 2021

And

Outlook for the Fiscal Year Ending March 31, 2022

April 28, 2021

Sony Group Corporation

Financial Statements (Unaudited)	F-1

Consolidated Balance Sheets	F-1
Consolidated Statements of Income (Fiscal year ended March 31)	F-2
Consolidated Statements of Comprehensive Income (Fiscal year ended March 31)	F-2
Consolidated Statements of Income (Three months ended March 31)	F-3
Consolidated Statements of Comprehensive Income (Three months ended March 31)	F-3
Consolidated Statements of Changes in Stockholders' Equity	F-4
Consolidated Statements of Cash Flows	F-5
Notes to Consolidated Financial Statements	F-6
- Business Segment Information	F-6
- Going Concern Assumption	F-13
- Accounting Policies and Other Information	F-13
- Subsequent event	F-15

Consolidated Results for the Fiscal Year Ended March 31, 2021	1

Outlook for the Fiscal Year Ending March 31, 2022	4

Business Segment Information (Consolidated Results for the Fiscal year ended March 31, 2021 and Outlook for the Fiscal year ending March 31, 2022)	5

Financial Target of the Fourth Mid-Range Plan	10

Basic Views on Selection of Accounting Standards	10

Supplemental Information (Effects of Transition to International Financial Reporting Standards (IFRS), as of February 3, 2021)	11

Other than the results forecast for the fiscal year ending March 31, 2022, all amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. (“U.S. GAAP”).

The results forecast for the fiscal year ending March 31, 2022 is presented on the basis of International Financial Reporting Standards (“IFRS”).

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

(Unaudited)

Consolidated Financial Statements

Consolidated Balance Sheets

				(Millions of yen)
	March 31			March 31			Change from
ASSETS	2020			2021			March 31, 2020
Current assets:
Cash and cash equivalents	¥	1,512,357		¥	1,786,982		¥	+274,625
Marketable securities		1,847,772			2,902,438			+1,054,666
Notes and accounts receivable, trade and contract assets		1,028,793			1,099,300			+70,507
Allowance for credit losses		(25,873	)		(29,406	)		-3,533
Inventories		589,969			637,391			+47,422
Other receivables		188,106			283,499			+95,393
Prepaid expenses and other current assets		594,021			538,540			-55,481
Total current assets		5,735,145			7,218,744			+1,483,599

Film costs		427,336			459,426			+32,090

Investments and advances:
Affiliated companies		207,922			226,218			+18,296
Securities investments and other		12,526,210			14,046,196			+1,519,986
Allowance for credit losses	–				(8,419	)		-8,419
		12,734,132			14,263,995			+1,529,863

Property, plant and equipment:
Land		81,482			79,557			-1,925
Buildings		659,556			683,249			+23,693
Machinery and equipment		1,725,720			1,748,961			+23,241
Construction in progress		76,391			100,728			+24,337
		2,543,149			2,612,495			+69,346
Less-Accumulated depreciation		1,634,505			1,627,061			-7,444
		908,644			985,434			+76,790

Other assets:
Operating lease right-of-use assets		359,510			337,322			-22,188
Finance lease right-of-use assets		33,100			39,772			+6,672
Intangibles, net		906,310			996,305			+89,995
Goodwill		783,888			827,149			+43,261
Deferred insurance acquisition costs		600,901			657,420			+56,519
Deferred income taxes		210,372			207,470			-2,902
Other		340,005			361,803			+21,798
		3,234,086			3,427,241			+193,155

Total assets	¥	23,039,343		¥	26,354,840		¥	+3,315,497


LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	810,176		¥	1,187,868		¥	+377,692
Current portion of long-term debt		29,807			131,699			+101,892
Current portion of long-term operating lease liabilities		68,942			73,362			+4,420
Notes and accounts payable, trade		380,810			599,569			+218,759
Accounts payable, other and accrued expenses		1,630,197			1,756,833			+126,636
Accrued income and other taxes		145,996			165,406			+19,410
Deposits from customers in the banking business		2,440,783			2,773,885			+333,102
Other		733,732			1,126,802			+393,070
Total current liabilities		6,240,443			7,815,424			+1,574,981

Long-term debt		634,966			773,294			+138,328
Long-term operating lease liabilities		314,836			290,259			-24,577
Accrued pension and severance costs		324,655			254,103			-70,552
Deferred income taxes		549,538			366,761			-182,777
Future insurance policy benefits and other		6,246,047			6,599,977			+353,930
Policyholders’ account in the life insurance business		3,642,271			4,331,065			+688,794
Other		289,285			294,302			+5,017
Total liabilities		18,242,041			20,725,185			+2,483,144

Redeemable noncontrolling interest		7,767			8,179			+412

Equity:
Sony Group Corporation’s stockholders’ equity:
Common stock		880,214			880,214		–
Additional paid-in capital		1,289,719			1,486,721			+197,002
Retained earnings		2,768,856			3,857,152			+1,088,296
Accumulated other comprehensive income		(580,980	)		(524,020	)		+56,960
Treasury stock, at cost		(232,503	)		(124,228	)		+108,275
		4,125,306			5,575,839			+1,450,533

Noncontrolling interests		664,229			45,637			-618,592
Total equity		4,789,535			5,621,476			+831,941
Total liabilities and equity	¥	23,039,343		¥	26,354,840		¥	+3,315,497

F-1

Consolidated Statements of Income

	(Millions of yen, except per share amounts)
	Fiscal year ended March 31
	2020			2021		Change
Sales and operating revenue:
Net sales	¥	6,856,090		¥	7,252,766	¥	+396,676
Financial services revenue		1,299,847			1,661,520		+361,673
Other operating revenue		103,948			85,074		-18,874
		8,259,885			8,999,360		+739,475

Costs and expenses:
Cost of sales		4,753,174			5,072,596		+319,422
Selling, general and administrative		1,502,625			1,469,955		-32,670
Financial services expenses		1,171,875			1,488,963		+317,088
Other operating (income) expense, net		(3,611	)		7,468		+11,079
		7,424,063			8,038,982		+614,919

Equity in net income of affiliated companies		9,637			11,487		+1,850

Operating income		845,459			971,865		+126,406

Other income:
Interest and dividends		19,278			10,457		-8,821
Gain on equity securities, net	–				247,026		+247,026
Other		2,671			6,752		+4,081
		21,949			264,235		+242,286

Other expenses:
Interest expenses		11,090			12,185		+1,095
Loss on equity securities, net		20,180		–			-20,180
Foreign exchange loss, net		26,789			16,056		-10,733
Net periodic benefit costs other than service costs		4,572			8,811		+4,239
Other		5,327			6,678		+1,351
		67,958			43,730		-24,228

Income before income taxes		799,450			1,192,370		+392,920

Income taxes		177,190			995		-176,195

Net income		622,260			1,191,375		+569,115

Less - Net income attributable to noncontrolling interests		40,069			19,599		-20,470

Net income attributable to Sony Group Corporation’s
stockholders	¥	582,191		¥	1,171,776	¥	+589,585



Per share data:
Net income attributable to Sony Group Corporation’s
stockholders
— Basic	¥	471.64		¥	952.29	¥	+480.65
— Diluted		461.23			936.90		+475.67

Consolidated Statements of Comprehensive Income

	(Millions of yen)
	Fiscal year ended March 31
	2020			2021			Change
Net income	¥	622,260		¥	1,191,375		¥	+569,115

Other comprehensive income, net of tax –
Unrealized gains (losses) on securities		40,390			(102,492	)		-142,882
Unrealized gains on derivative instruments		1,267			1,513			+246
Pension liability adjustment		74,971			12,965			-62,006
Foreign currency translation adjustments		(75,888	)		106,826			+182,714
Debt valuation adjustments		3,032			(3,120	)		-6,152

Total comprehensive income		666,032			1,207,067			+541,035

Less - Comprehensive income attributable
to noncontrolling interests		54,151			8,231			-45,920

Comprehensive income attributable
to Sony Group Corporation’s stockholders	¥	611,881		¥	1,198,836		¥	+586,955

F-2

Consolidated Statements of Income

	(Millions of yen, except per share amounts)
	Three months ended March 31
	2020			2021			Change
Sales and operating revenue:
Net sales	¥	1,537,308		¥	1,771,417		¥	+234,109
Financial services revenue		184,556			421,065			+236,509
Other operating revenue		26,876			27,937			+1,061
		1,748,740			2,220,419			+471,679

Costs and expenses:
Cost of sales		1,123,928			1,319,092			+195,164
Selling, general and administrative		397,510			429,647			+32,137
Financial services expenses		174,664			386,086			+211,422
Other operating expense, net		20,406			23,959			+3,553
		1,716,508			2,158,784			+442,276

Equity in net income of affiliated companies		3,215			4,845			+1,630

Operating income		35,447			66,480			+31,033

Other income:
Interest and dividends		4,620			3,348			-1,272
Gain on equity securities, net	–				41,299			+41,299
Other		587			2,542			+1,955
		5,207			47,189			+41,982

Other expenses:
Interest expenses		2,297			4,920			+2,623
Loss on equity securities, net		20,552		–				-20,552
Foreign exchange loss, net		17,413			7,372			-10,041
Net periodic benefit costs other than service costs		98			1,069			+971
Other		4,277			4,832			+555
		44,637			18,193			-26,444

Income (loss) before income taxes		(3,983	)		95,476			+99,459

Income taxes		(19,726	)		(11,646	)		+8,080

Net income		15,743			107,122			+91,379

Less - Net income attributable to noncontrolling interests		3,099			122			-2,977

Net income attributable to Sony Group Corporation’s
stockholders	¥	12,644		¥	107,000		¥	+94,356



Per share data:
Net income attributable to Sony Group Corporation’s
stockholders
— Basic	¥	10.33		¥	86.41		¥	+76.08
— Diluted		10.10			85.44			+75.34

Consolidated Statements of Comprehensive Income

	(Millions of yen)
	Three months ended March 31
	2020			2021			Change
Net income	¥	15,743		¥	107,122		¥	+91,379

Other comprehensive income, net of tax –
Unrealized gains (losses) on securities		25,633			(38,064	)		-63,697
Unrealized gains on derivative instruments		1,207			845			-362
Pension liability adjustment		(11,191	)		6,160			+17,351
Foreign currency translation adjustments		(58,387	)		133,613			+192,000
Debt valuation adjustments		3,032			(1,283	)		-4,315

Total comprehensive income (loss)		(23,963	)		208,393			+232,356

Less - Comprehensive income attributable
to noncontrolling interests		12,516			1,365			-11,151

Comprehensive income (loss) attributable
to Sony Group Corporation’s stockholders	¥	(36,479	)	¥	207,028		¥	+243,507

F-3

Consolidated Statements of Changes in Stockholders' Equity

																					(Millions of yen)
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income			Treasury stock, at cost			Sony Group Corporation’s stockholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2019	¥	874,291	¥	1,266,874		¥	2,320,586		¥	(610,670	)	¥	(104,704	)	¥	3,746,377		¥	690,313		¥	4,436,690

Cumulative effect of ASU 2016-02							(7,472	)								(7,472	)					(7,472	)
Issuance of new shares		529		529												1,058						1,058
Exercise of stock acquisition rights		5,179		5,180												10,359						10,359
Conversion of convertible bonds		215		215												430						430
Stock-based compensation				1,980												1,980						1,980

Comprehensive income:
Net income							582,191									582,191			40,069			622,260
Other comprehensive income, net of tax
Unrealized gains on securities										26,156						26,156			14,234			40,390
Unrealized gains on derivative instruments										1,267						1,267						1,267
Pension liability adjustment										74,937						74,937			34			74,971
Foreign currency translation adjustments										(74,643	)					(74,643	)		(1,245	)		(75,888	)
Debt valuation adjustments										1,973						1,973			1,059			3,032
Total comprehensive income																611,881			54,151			666,032

Stock issue costs, net of tax				(80	)											(80	)					(80	)
Dividends declared							(55,111	)								(55,111	)		(25,885	)		(80,996	)
Purchase of treasury stock													(200,211	)		(200,211	)					(200,211	)
Reissuance of treasury stock				0									2			2						2
Cancellation of treasury stock				(1,072	)		(71,338	)					72,410		–						–
Transactions with noncontrolling interests
shareholders and other				16,093												16,093			(54,350	)		(38,257	)
Balance at March 31, 2020	¥	880,214		1,289,719			2,768,856			(580,980	)		(232,503	)		4,125,306			664,229			4,789,535

On November 18, 2019, Sony, through a wholly-owned subsidiary in the Pictures segment, acquired AT&T Inc.’s (“AT&T”) 42% equity interest in Game Show Network, LLC (“Game Show Network”), a U.S.-based media network subsidiary. As a result of this acquisition, Game Show Network has become a wholly-owned subsidiary of Sony. Sony paid 53,992 million yen (496 million U.S. dollars) to AT&T, including 129 million U.S. dollars of dividends Sony distributed to AT&T prior to the acquisition. The difference between the cash paid and the carrying amount of the noncontrolling interests was recognized as an increase to additional paid-in capital.

																					(Millions of yen)
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income			Treasury stock, at cost			Sony Group Corporation’s stockholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2020	¥	880,214	¥	1,289,719		¥	2,768,856		¥	(580,980	)	¥	(232,503	)	¥	4,125,306		¥	664,229		¥	4,789,535

Cumulative effect of ASU 2016-13							(3,669	)								(3,669	)		(1,386	)		(5,055	)
Exercise of stock acquisition rights				(354	)		(735	)					18,074			16,985						16,985
Conversion of convertible bonds							(11,060	)					89,402			78,342						78,342
Stock-based compensation				1,577												1,577						1,577

Comprehensive income:
Net income							1,171,776									1,171,776			19,599			1,191,375
Other comprehensive income, net of tax
Unrealized losses on securities										(90,521	)					(90,521	)		(11,971	)		(102,492	)
Unrealized gains on derivative instruments										1,513						1,513						1,513
Pension liability adjustment										12,962						12,962			3			12,965
Foreign currency translation adjustments										105,643						105,643			1,183			106,826
Debt valuation adjustments										(2,537	)					(2,537	)		(583	)		(3,120	)
Total comprehensive income																1,198,836			8,231			1,207,067

Dividends declared							(68,016	)								(68,016	)		(12,996	)		(81,012	)
Purchase of treasury stock													(366	)		(366	)					(366	)
Reissuance of treasury stock				354									1,165			1,519						1,519
Transactions with noncontrolling interests
shareholders and other				195,425						29,900						225,325			(612,441	)		(387,116	)
Balance at March 31, 2021	¥	880,214		1,486,721			3,857,152			(524,020	)		(124,228	)		5,575,839			45,637			5,621,476

In the quarter ended September 30, 2020, Sony Group Corporation acquired all the common shares and the related stock acquisition rights not held by Sony Group Corporation of Sony Financial Holdings Inc. (“SFH”), a consolidated subsidiary of Sony Group Corporation, and SFH has become a wholly-owned subsidiary of Sony Group Corporation. Consideration for this acquisition was 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.

F-4

Consolidated Statements of Cash Flows

	(Millions of yen)
	Fiscal year ended March 31
	2020			2021
Cash flows from operating activities:
Net income	¥	622,260		¥	1,191,375
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		416,642			390,693
Amortization of film costs		329,809			273,044
Accrual for pension and severance costs, less payments		8,948			(42,936	)
Other operating (income) expense, net		(3,611	)		7,468
(Gain) loss on securities investments, net (other than financial services business)		20,177			(247,033	)
(Gain) loss on marketable securities and Securities investments held in the financial
services business, net		93,088			(478,321	)
Deferred income taxes		4,799			(153,427	)
Equity in net income of affiliated companies, net of dividends		(5,114	)		(4,948	)
Changes in assets and liabilities:
(Increase) decrease in notes, accounts receivable, trade and contract assets		62,654			(37,779	)
(Increase) decrease in inventories		40,315			(57,007	)
Increase in film costs		(361,194	)		(280,541	)
Increase (decrease) in notes and accounts payable, trade		(91,435	)		211,939
Increase (decrease) in accrued income and other taxes		(40,144	)		80,165
Increase in future insurance policy benefits and other		520,683			905,343
Increase in deferred insurance acquisition costs		(99,433	)		(102,289	)
Increase in marketable securities held in the life insurance business		(124,270	)		(156,132	)
Increase in other current assets		(37,286	)		(102,400	)
Increase (decrease) in other current liabilities		(27,083	)		62,619
Other		19,940			(109,683	)
Net cash provided by operating activities		1,349,745			1,350,150

Cash flows from investing activities:
Payments for purchases of fixed assets		(439,761	)		(512,239	)
Proceeds from sales of fixed assets		18,758			15,823
Payments for investments and advances by financial services business		(1,319,062	)		(1,631,017	)
Payments for investments and advances
(other than financial services business)		(48,853	)		(103,143	)
Proceeds from sales or return of investments and collections of advances
by financial services business		343,740			449,081
Proceeds from sales or return of investments and collections of advances
(other than financial services business)		14,456			20,309
Proceeds from sales of businesses		12,816			3,151
Proceeds from sales of Olympus Corporation Shares		80,357		–
Other		(14,729	)		(23,481	)
Net cash used in investing activities		(1,352,278	)		(1,781,516	)

Cash flows from financing activities:
Proceeds from issuance of long-term debt		118,447			406,857
Payments of long-term debt		(198,055	)		(98,134	)
Increase in short-term borrowings, net		193,332			355,536
Proceeds from issuance of short-term borrowings in connection with
payment for purchase of noncontrolling interest in Sony Financial Holdings Inc.	–				396,500
Payments of short-term borrowings in connection with
payment for purchase of noncontrolling interest in Sony Financial Holdings Inc.	–				(396,500	)
Increase in deposits from customers in the financial services business, net		258,720			467,286
Dividends paid		(49,574	)		(61,288	)
Payments for purchase of treasury stock		(200,211	)		(366	)
Payment for purchase of noncontrolling interest in Game Show Network, LLC		(39,894	)	–
Payment for purchase of noncontrolling interest in Sony Financial Holdings Inc.	–				(396,698	)
Other		(17,107	)		(6,226	)
Net cash provided by financing activities		65,658			666,967

Effect of exchange rate changes on cash and cash equivalents, including restricted		(21,643	)		36,668

Net increase in cash and cash equivalents, including restricted		41,482			272,269
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 fiscal year		1,515,295			1,787,564

Less - restricted cash and cash equivalents, included in other current assets and
other assets		2,938			582
Cash and cash equivalents at end of the fiscal year	¥	1,512,357		¥	1,786,982

F-5

Notes to Consolidated Financial Statements

Business Segment Information

(Business Segments)

	(Millions of yen)
	Fiscal year ended March 31
Sales and operating revenue	2020			2021			Change
Game & Network Services
Customers	¥	1,919,760		¥	2,604,713		¥	+684,953
Intersegment		57,791			51,565			-6,226
Total		1,977,551			2,656,278			+678,727

Music
Customers		838,592			927,250			+88,658
Intersegment		11,317			12,617			+1,300
Total		849,909			939,867			+89,958

Pictures
Customers		1,010,714			757,580			-253,134
Intersegment		1,140			1,187			+47
Total		1,011,854			758,767			-253,087

Electronics Products & Solutions
Customers		1,969,880			1,902,887			-66,993
Intersegment		21,388			17,843			-3,545
Total		1,991,268			1,920,730			-70,538

Imaging & Sensing Solutions
Customers		985,259			937,859			-47,400
Intersegment		85,317			74,638			-10,679
Total		1,070,576			1,012,497			-58,079

Financial Services
Customers		1,299,847			1,661,520			+361,673
Intersegment		7,901			7,401			-500
Total		1,307,748			1,668,921			+361,173

All Other
Customers		214,999			196,517			-18,482
Intersegment		36,421			32,736			-3,685
Total		251,420			229,253			-22,167

Corporate and elimination		(200,441	)		(186,953	)		+13,488
Consolidated total	¥	8,259,885		¥	8,999,360		¥	+739,475

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)
	Fiscal year ended March 31
Operating income (loss)	2020			2021			Change
Game & Network Services	¥	238,400		¥	342,192		¥	+103,792
Music		142,345			188,056			+45,711
Pictures		68,157			80,478			+12,321
Electronics Products & Solutions		87,276			139,180			+51,904
Imaging & Sensing Solutions		235,584			145,876			-89,708
Financial Services		129,597			164,582			+34,985
All Other		16,288			11,368			-4,920
Total		917,647			1,071,732			+154,085

Corporate and elimination		(72,188	)		(99,867	)		-27,679
Consolidated total	¥	845,459		¥	971,865		¥	+126,406

Operating income (loss) is sales and operating revenue less costs and expenses, and includes equity in net income (loss) of affiliated companies.

F-6

(Business Segments)

	(Millions of yen)
	Three months ended March 31
Sales and operating revenue	2020			2021			Change
Game & Network Services
Customers	¥	423,388		¥	645,330		¥	+221,942
Intersegment		10,182			14,975			+4,793
Total		433,570			660,305			+226,735

Music
Customers		207,951			263,372			+55,421
Intersegment		3,492			4,050			+558
Total		211,443			267,422			+55,979

Pictures
Customers		328,866			200,046			-128,820
Intersegment		282			124			-158
Total		329,148			200,170			-128,978

Electronics Products & Solutions
Customers		357,095			430,253			+73,158
Intersegment		6,330			4,985			-1,345
Total		363,425			435,238			+71,813

Imaging & Sensing Solutions
Customers		210,689			211,725			+1,036
Intersegment		20,478			20,564			+86
Total		231,167			232,289			+1,122

Financial Services
Customers		184,556			421,065			+236,509
Intersegment		1,848			1,878			+30
Total		186,404			422,943			+236,539

All Other
Customers		33,295			46,083			+12,788
Intersegment		7,364			7,374			+10
Total		40,659			53,457			+12,798

Corporate and elimination		(47,076	)		(51,405	)		-4,329
Consolidated total	¥	1,748,740		¥	2,220,419		¥	+471,679

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)
	Three months ended March 31
Operating income (loss)	2020			2021			Change
Game & Network Services	¥	46,159		¥	33,040		¥	-13,119
Music		30,338			40,621			+10,283
Pictures		23,041			1,778			-21,263
Electronics Products & Solutions		(59,513	)		(11,469	)		+48,044
Imaging & Sensing Solutions		34,496			20,219			-14,277
Financial Services		12,079			27,066			+14,987
All Other		(4,217	)		(3,481	)		+736
Total		82,383			107,774			+25,391

Corporate and elimination		(46,936	)		(41,294	)		+5,642
Consolidated total	¥	35,447		¥	66,480		¥	+31,033

Operating income (loss) is sales and operating revenue less costs and expenses, and includes equity in net income (loss) of affiliated companies.

F-7

(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)
	Fiscal year ended March 31
Sales and operating revenue (to external customers)	2020		2021		Change

Game & Network Services
Digital Software and Add-on Content	¥	1,010,296	¥	1,454,654	¥	+444,358
Network Services		337,265		382,950		+45,685
Hardware and Others		572,199		767,109		+194,910
Total		1,919,760		2,604,713		+684,953

Music
Recorded Music - Streaming		276,039		337,100		+61,061
Recorded Music - Others		191,114		179,167		-11,947
Music Publishing		157,478		156,862		-616
Visual Media and Platform		213,961		254,121		+40,160
Total		838,592		927,250		+88,658

Pictures
Motion Pictures		475,061		271,081		-203,980
Television Productions		301,224		267,123		-34,101
Media Networks		234,429		219,376		-15,053
Total		1,010,714		757,580		-253,134

Electronics Products & Solutions
Televisions		646,513		709,007		+62,494
Audio and Video		346,060		313,975		-32,085
Still and Video Cameras		384,142		338,694		-45,448
Mobile Communications		362,144		358,580		-3,564
Other		231,021		182,631		-48,390
Total		1,969,880		1,902,887		-66,993

Imaging & Sensing Solutions		985,259		937,859		-47,400

Financial Services		1,299,847		1,661,520		+361,673

All Other		214,999		196,517		-18,482

Corporate		20,834		11,034		-9,800
Consolidated total	¥	8,259,885	¥	8,999,360	¥	+739,475

F-8

(Sales to Customers by Product Category)

	(Millions of yen)
	Three months ended March 31
Sales and operating revenue (to external customers)	2020		2021		Change

Game & Network Services
Digital Software and Add-on Content	¥	262,461	¥	330,167	¥	+67,706
Network Services		83,798		97,984		+14,186
Hardware and Others		77,129		217,179		+140,050
Total		423,388		645,330		+221,942

Music
Recorded Music - Streaming		69,948		101,310		+31,362
Recorded Music - Others		47,102		51,435		+4,333
Music Publishing		40,065		43,209		+3,144
Visual Media and Platform		50,836		67,418		+16,582
Total		207,951		263,372		+55,421

Pictures
Motion Pictures		152,475		62,210		-90,265
Television Productions		120,620		76,228		-44,392
Media Networks		55,771		61,608		+5,837
Total		328,866		200,046		-128,820

Electronics Products & Solutions
Televisions		96,414		149,951		+53,537
Audio and Video		61,821		66,033		+4,212
Still and Video Cameras		62,251		80,482		+18,231
Mobile Communications		70,380		74,150		+3,770
Other		66,229		59,637		-6,592
Total		357,095		430,253		+73,158

Imaging & Sensing Solutions		210,689		211,725		+1,036

Financial Services		184,556		421,065		+236,509

All Other		33,295		46,083		+12,788

Corporate		2,900		2,545		-355
Consolidated total	¥	1,748,740	¥	2,220,419	¥	+471,679

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 (loss) of Mobile Communications for the fiscal years ended March 31, 2020 and 2021 was (21,057) million yen and 27,671 million yen, respectively. In addition, the operating loss of Mobile Communications for the three months ended March 31, 2020 and 2021 was (29,696) million yen and (14,115) million yen, respectively.

F-9

(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		March 31		March 31		March 31		March 31		March 31
	2020		2021		2020		2021		2020		2021
ASSETS
Current assets:
Cash and cash equivalents	¥	550,039	¥	497,218	¥	962,318	¥	1,289,764	¥	1,512,357	¥	1,786,982
Marketable securities		1,847,772		2,902,438	–		–			1,847,772		2,902,438
Notes and accounts receivable, trade and contract assets		10,532		15,125		999,976		1,070,079		1,002,920		1,069,894
Inventories	–		–			589,969		637,391		589,969		637,391
Other receivables		73,117		63,725		115,100		220,069		188,106		283,499
Prepaid expenses and other current assets		181,247		181,540		413,496		369,696		594,021		538,540
Total current assets		2,662,707		3,660,046		3,080,859		3,586,999		5,735,145		7,218,744

Film costs	–		–			427,336		459,426		427,336		459,426

Investments and advances		12,457,977		13,588,848		351,936		749,661		12,734,132		14,263,995

Investments in Financial Services, at cost	–		–			153,968		550,483	–		–

Property, plant and equipment		18,247		19,252		890,640		966,237		908,644		985,434

Other assets:
Right-of-use assets		58,897		66,952		333,753		310,145		392,610		377,094
Intangibles, net		49,871		53,069		856,439		943,236		906,310		996,305
Goodwill		10,834		10,834		773,054		816,315		783,888		827,149
Deferred insurance acquisition costs		600,901		657,420	–		–			600,901		657,420
Deferred income taxes		10,365		1,506		200,021		303,778		210,372		207,470
Other		38,949		35,010		305,028		330,754		340,005		361,803
		769,817		824,791		2,468,295		2,704,228		3,234,086		3,427,241

Total assets	¥	15,908,748	¥	18,092,937	¥	7,373,034	¥	9,017,034	¥	23,039,343	¥	26,354,840

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	758,737	¥	1,153,504	¥	81,246	¥	166,063	¥	839,983	¥	1,319,567
Short-term operating lease liabilities		9,363		9,422		59,595		63,941		68,942		73,362
Notes and accounts payable, trade	–		–			380,810		599,569		380,810		599,569
Accounts payable, other and accrued expenses		40,457		39,885		1,591,072		1,718,252		1,630,197		1,756,833
Accrued income and other taxes		22,825		3,944		123,171		161,462		145,996		165,406
Deposits from customers in the banking business		2,440,783		2,773,885	–		–			2,440,783		2,773,885
Other		226,455		632,047		514,368		521,753		733,732		1,126,802
Total current liabilities		3,498,620		4,612,687		2,750,262		3,231,040		6,240,443		7,815,424

Long-term debt		240,143		329,157		398,793		448,098		634,966		773,294
Long-term operating lease liabilities		41,192		36,890		273,668		253,369		314,836		290,259
Accrued pension and severance costs		34,211		34,637		290,444		219,466		324,655		254,103
Deferred income taxes		391,883		359,060		173,022		120,576		549,538		366,761
Future insurance policy benefits and other		6,246,047		6,599,977	–		–			6,246,047		6,599,977
Policyholders’ account in the life insurance business		3,642,271		4,331,065	–		–			3,642,271		4,331,065
Other		21,843		18,234		289,574		296,785		289,285		294,302
Total liabilities		14,116,210		16,321,707		4,175,763		4,569,334		18,242,041		20,725,185

Redeemable noncontrolling interest	–		–			7,767		8,179		7,767		8,179

Equity:
Stockholders’ equity of Financial Services		1,790,333		1,768,300	–		–		–		–
Stockholders’ equity of Sony without Financial Services	–		–			3,159,071		4,396,814	–		–
Sony Group Corporation’s stockholders’ equity	–		–		–		–			4,125,306		5,575,839
Noncontrolling interests		2,205		2,930		30,433		42,707		664,229		45,637
Total equity		1,792,538		1,771,230		3,189,504		4,439,521		4,789,535		5,621,476

Total liabilities and equity	¥	15,908,748	¥	18,092,937	¥	7,373,034	¥	9,017,034	¥	23,039,343	¥	26,354,840

F-10

Condensed Statements of Income

	(Millions of yen)
	Fiscal year ended March 31
	Financial Services						Sony without Financial Services						Consolidated
	2020			2021			2020			2021			2020			2021

Financial services revenue	¥	1,307,748		¥	1,668,921		¥	–		¥	–		¥	1,299,847		¥	1,661,520
Net sales and operating revenue	–			–				6,965,971			7,344,111			6,960,038			7,337,840
		1,307,748			1,668,921			6,965,971			7,344,111			8,259,885			8,999,360

Cost of sales	–			–				4,764,014			5,083,615			4,753,174			5,072,596
Selling, general and administrative	–			–				1,497,764			1,465,450			1,502,625			1,469,955
Financial services expenses		1,179,776			1,496,364			–			–			1,171,875			1,488,963
Other operating (income) expenses, net		(1,729	)		7,975			(3,841	)		(507	)		(3,611	)		7,468
		1,178,047			1,504,339			6,257,937			6,548,558			7,424,063			8,038,982

Equity in net income (loss) of affiliated companies		(104	)	–				9,741			11,487			9,637			11,487

Operating income		129,597			164,582			717,775			807,040			845,459			971,865

Other income (expenses), net		(20	)		(84	)		(28,299	)		240,402			(46,009	)		220,505

Income before income taxes		129,577			164,498			689,476			1,047,442			799,450			1,192,370

Income taxes		36,311			47,068			141,552			(46,365	)		177,190			995

Net income		93,266			117,430			547,924			1,093,807			622,260			1,191,375

Less - Net income attributable to noncontrolling interests		483			695			7,092			3,552			40,069			19,599

Net income of Financial Services	¥	92,783		¥	116,735		¥	–		¥	–		¥	–		¥	–

Net income of Sony without Financial Services	¥	–		¥	–		¥	540,832		¥	1,090,255		¥	–		¥	–

Net income attributable to Sony Group Corporation's stockholders	¥	–		¥	–		¥	–		¥	–		¥	582,191		¥	1,171,776

	Three months ended March 31
	Financial Services						Sony without Financial Services						Consolidated
	2020			2021			2020			2021			2020			2021

Financial services revenue	¥	186,404		¥	422,943		¥	–		¥	–		¥	184,556		¥	421,065
Net sales and operating revenue	–			–				1,565,748			1,801,399			1,564,184			1,799,354
		186,404			422,943			1,565,748			1,801,399			1,748,740			2,220,419

Cost of sales	–			–				1,126,454			1,321,882			1,123,928			1,319,092
Selling, general and administrative	–			–				396,580			429,116			397,510			429,647
Financial services expenses		176,513			387,964			–		–				174,664			386,086
Other operating (income) expenses, net		(1,771	)		7,913			20,232			16,046			20,406			23,959
		174,742			395,877			1,543,266			1,767,044			1,716,508			2,158,784

Equity in net income of affiliated companies		417		–				2,798			4,845			3,215			4,845

Operating income		12,079			27,066			25,280			39,200			35,447			66,480

Other income (expenses), net		(5	)		(21	)		(39,424	)		29,016			(39,430	)		28,996

Income (Loss) before income taxes		12,074			27,045			(14,144	)		68,216			(3,983	)		95,476

Income taxes		2,077			9,454			(21,129	)		(21,170	)		(19,726	)		(11,646	)

Net income		9,997			17,591			6,985			89,386			15,743			107,122

Less - Net income (loss) attributable to noncontrolling interests		224			195			(625	)		(72	)		3,099			122

Net income of Financial Services	¥	9,773		¥	17,396		¥	–		¥	–		¥	–		¥	–

Net income of Sony without Financial Services	¥	–		¥	–		¥	7,610		¥	89,458		¥	–		¥	–

Net income attributable to Sony Group Corporation's stockholders	¥	–		¥	–		¥	–		¥	–		¥	12,644		¥	107,000

F-11

Condensed Statements of Cash Flows

	(Millions of yen)
	Fiscal year ended March 31
	Financial Services						Sony without Financial Services						Consolidated
	2020			2021			2020			2021			2020			2021
Cash flows from operating activities:
Net income (loss)	¥	93,266		¥	117,430		¥	547,924		¥	1,093,807		¥	622,260		¥	1,191,375
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		106,667			59,885			309,975			330,808			416,642			390,693
Amortization of film costs	–			–				329,809			273,044			329,809			273,044
Other operating (income) expenses, net		(1,729	)		7,975			(3,841	)		(507	)		(3,611	)		7,468
(Gain) loss on marketable securities and
securities investments, net		93,088			(478,321	)		20,177			(247,033	)		113,265			(725,354	)
Changes in assets and liabilities:
(Increase) decrease in notes, accounts receivable, trade
and contract assets		5,947			(4,594	)		55,466			(40,908	)		62,654			(37,779	)
(Increase) decrease in inventories	–			–				40,315			(57,007	)		40,315			(57,007	)
(Increase) decrease in film costs	–			–				(361,194	)		(280,541	)		(361,194	)		(280,541	)
Increase (decrease) in notes and accounts
payable, trade	–			–				(91,435	)		211,939			(91,435	)		211,939
Increase (decrease) in future insurance policy
benefits and other		520,683			905,343		–			–				520,683			905,343
(Increase) decrease in deferred insurance
acquisition costs		(99,433	)		(102,289	)	–			–				(99,433	)		(102,289	)
(Increase) decrease in marketable securities held
in the life insurance business		(124,270	)		(156,132	)	–			–				(124,270	)		(156,132	)
Other		10,021			(101,649	)		(84,346	)		(161,425	)		(75,940	)		(270,610	)
Net cash provided by (used in) operating activities		604,240			247,648			762,850			1,122,177			1,349,745			1,350,150

Cash flows from investing activities:
Payments for purchases of fixed assets		(21,822	)		(18,564	)		(420,149	)		(493,740	)		(439,761	)		(512,239	)
Payments for investments and advances		(1,319,888	)		(1,631,017	)		(48,853	)		(103,143	)		(1,367,915	)		(1,734,160	)
Proceeds from sales or return of investments and
collections of advances		343,740			449,081			94,813			20,309			438,553			469,390
Other		8,873			72			11,100			(4,579	)		16,845			(4,507	)
Net cash provided by (used in) investing activities		(989,097	)		(1,200,428	)		(363,089	)		(581,153	)		(1,352,278	)		(1,781,516	)

Cash flows from financing activities:
Increase (decrease) in borrowings, net		193,709			462,895			(79,752	)		201,364			113,724			664,259
Increase (decrease) in deposits from customers, net		258,720			467,286		–			–				258,720			467,286
Dividends paid		(27,189	)		(30,454	)		(49,574	)		(61,288	)		(49,574	)		(61,288	)
Other		61			232			(247,754	)		(392,678	)		(257,212	)		(403,290	)
Net cash provided by (used in) financing activities		425,301			899,959			(377,080	)		(252,602	)		65,658			666,967

Effect of exchange rate changes on cash and cash equivalents	–			–				(21,643	)		36,668			(21,643	)		36,668

Net increase (decrease) in cash and cash equivalents,
including restricted		40,444			(52,821	)		1,038			325,090			41,482			272,269
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 fiscal year		550,039			497,218			965,256			1,290,346			1,515,295			1,787,564
Less - restricted cash and cash equivalents,
included in other current assets and other assets	–			–				2,938			582			2,938			582
Cash and cash equivalents at end of the fiscal year	¥	550,039		¥	497,218		¥	962,318		¥	1,289,764		¥	1,512,357		¥	1,786,982

F-12

Going Concern Assumption

Not Applicable

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”) issued Accounting 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-13

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

	Yen in millions
	March 31, 2020			Impact of Adoption									April 1, 2020
	March 31, 2020			ASU 2016-13			ASU 2019-02			Total			April 1, 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 Group Corporation’s stockholders’ equity:
Retained earnings		2,768,856			(3,669	)		-			(3,669	)		2,765,187
Total Sony Group 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 consolidated balance sheets.

(Number of Consolidated Subsidiaries and Affiliated Companies)

As of March 31, 2021, Sony had 1,414 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)
	Fiscal year ended March 31
Net income attributable to Sony Group Corporation’s stockholders	2020		2021
— Basic		1,234,408		1,230,480
— Diluted		1,262,255		1,250,692

F-14

	(Thousands of shares)
	Three months ended March 31
Net income attributable to Sony Group Corporation’s stockholders	2020		2021
— Basic		1,224,106		1,238,284
— Diluted		1,251,684		1,252,372

The dilutive effect in the weighted-average number of outstanding shares for the fiscal years ended March 31, 2020 and 2021, and for the three months ended March 31, 2020 and 2021 primarily resulted from convertible bonds which were issued in July 2015.

(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.

(Reclassifications)

Certain reclassifications of the financial statements and accompanying footnotes for the fiscal year and three months ended March 31, 2020 have been made to conform to the presentation for the fiscal year and three months ended March 31, 2021, respectively.

(Reversal of valuation allowances for deferred tax assets of Sony Group 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 Group 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.

Subsequent event

Setting of parameters for repurchase of shares of its own common stock

Sony Group Corporation approved the setting of the following parameters for repurchase of its own common stock pursuant to the Companies Act of Japan and Sony Group Corporation’s Articles of Incorporation at the meeting of its Board of Directors held on April 28, 2021:

1. Total number of shares for repurchase: 25 million shares (maximum)

2. Total purchase price for repurchase of shares: 200 billion yen (maximum)

3. Period of repurchase: April 30, 2021 to April 28, 2022

F-15

Consolidated Results for the Fiscal Year Ended March 31, 2021

“Sales and operating revenue” in accordance with U.S. GAAP and, in respect of the results forecast for the fiscal year ending March 31, 2022, “Sales and Financial Services revenue” in accordance with International Financial Reporting Standards (“IFRS”) are shown as “Sales” below.

	(Billions of yen, except per share amounts)
	Fiscal Year ended March 31
	2020		2021		Change
Sales	¥	8,259.9	¥	8,999.4	¥	+739.5
Operating income		845.5		971.9		+126.4
Income before income taxes		799.5		1,192.4		+392.9
Net income attributable to Sony Group Corporation’s stockholders		582.2		1,171.8		+589.6

Net income attributable to Sony Group Corporation’s stockholders per share of common stock:
- Basic	¥	471.64	¥	952.29		+480.65
- Diluted		461.23		936.90		+475.67

	(Billions of yen, except per share amounts)
	Fiscal Year ended March 31
For all segments excluding the Financial Services segment *		2020			2021		Change
Net cash provided by operating activities	¥	762.9		¥	1,122.2			+359.3
Net cash used in investing activities		(363.1	)		(581.2	)		- 218.1
Total		399.8			541.0			+141.3

* 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-10 for details about the preparation of the Condensed Statements of Cash Flows.

The average foreign exchange rates during the fiscal years ended March 31, 2020 and 2021 are presented below.

	Fiscal Year ended March 31
	2020		2021		Change
The average rate of yen
1 U.S. dollar	¥	108.7	¥	106.1	2.6 yen appreciation
1 Euro		120.8		123.7	2.9 yen depreciation

Sales increased 739.5 billion yen (9%) compared to the previous fiscal year (“year-on-year”) to 8 trillion 999.4 billion yen mainly due to significant increases in sales in the Game & Network Services (“G&NS”) and the Financial Services segments, partially offset primarily by a significant decrease in sales in the Pictures segment. On a constant currency basis, sales increased approximately 10% year-on-year. For further details about the impact of foreign exchange rate fluctuations on sales and operating income (loss), see Note on page 9. Sales in the previous fiscal year also included 7.9 billion yen in patent royalty revenue resulting from the signing of a licensing agreement, recorded within Corporate and elimination.

Operating income increased 126.4 billion yen year-on-year to 971.9 billion yen. This increase was primarily due to significant increases in operating income in the G&NS, Electronics Products & Solutions (“EP&S”) and Music segments, partially offset by a significant decrease in operating income in the Imaging & Sensing Solutions (“I&SS”) segment.

Operating income for the current fiscal year included the following:

・	Gain on the sale of a portion of shares of Pledis Entertainment Co., Ltd. (“Pledis”): 6.5 billion yen (Music segment)

・	Gain recorded in connection with a business transfer: 5.4 billion yen (Music segment)

・	An impairment charge against long-lived assets in the nursing care business: 7.4 billion yen (Financial Services segment)

・	Inventory write-downs of certain image sensors for mobile products: 7.2 billion yen (I&SS segment)

・	Expenses related to the Sony Global Relief Fund for COVID-19: 5.3 billion yen (Corporate and elimination)

Operating income for the previous fiscal year included the following:

・	Remeasurement and realized gains resulting from the public listing and sale of a portion of shares of SRE Holdings Corporation: 17.3 billion yen (All Other)

・	Realized and remeasurement gains resulting from the transfer of a portion of shares of NSF Engagement Corporation: 6.3 billion yen (Corporate and elimination)

During the current fiscal year, restructuring charges, net, increased 0.9 billion yen year-on-year to 25.9 billion yen. This amount is recorded as an operating expense included in the above-mentioned operating income.

Equity in net income of affiliated companies, recorded within operating income, increased 1.9 billion yen year-on-year to income of 11.5 billion yen.

The net effect of other income and expenses was income of 220.5 billion yen, compared to an expense of 46.0 billion yen in the previous fiscal year. This was mainly due to the recording of 247.0 billion yen in unrealized gains on Sony’s shares of Bilibili Inc. (“Bilibili”) and Spotify Technology S.A. in the current fiscal year. The above unrealized gains also included 14.6 billion yen of an unrealized gain on an unlisted equity security and 11.2 billion yen of an unrealized gain on an equity security whose lockup restriction will expire within one year.

Income before income taxes increased 392.9 billion yen year-on-year to 1 trillion 192.4 billion yen.

During the current fiscal year, Sony recorded 1.0 billion yen of income tax expenses, resulting in an effective tax rate of 0.1%, which was lower than the effective tax rate of 22.2% in the previous fiscal year. This lower effective tax rate was mainly due to the reversal of valuation allowances recorded against deferred tax assets in Japan and the United States. Sony reversed valuation allowances in Japan that were recorded against a significant portion of the deferred tax assets related to the national taxes of Sony Group Corporation and its national tax filing group in Japan, which resulted in a tax benefit of 214.9 billion yen in the three months ended September 30, 2020, and adjusted valuation allowances recorded against deferred tax assets related to the local taxes at some companies in Japan, which resulted in a net tax benefit of 7.6 billion yen in the fiscal year ended March 31, 2021. Sony reversed valuation allowances in the United States recorded against the deferred tax assets for foreign tax credits and research and development credits of the consolidated tax filing group, which resulted in a tax benefit of 21.3 billion yen and 13.6 billion yen, respectively, in the fiscal year ended March 31,2021.

Net income attributable to Sony Group Corporation’s stockholders, which deducts net income attributable to noncontrolling interests, increased 589.6 billion yen year-on-year to 1 trillion 171.8 billion yen.

Cash Flows

For Consolidated Statements of Cash Flows, charts showing Sony’s cash flow information for all segments, all segments excluding the Financial Services segment and the Financial Services segment alone, please refer to pages F-5 and F-12.

Operating Activities: During the current fiscal year, there was a net cash inflow of 1 trillion 350.2 billion yen from operating activities, an increase of 0.4 billion yen year-on-year.

For all segments excluding the Financial Services segment, there was a net cash inflow of 1 trillion 122.2 billion yen, an increase of 359.3 billion yen year-on-year. This increase was primarily due to an increase in net income after taking into account non-cash adjustments (including depreciation and amortization, other operating (income) expense, net and (gain) loss on securities investments, net) as well as an increase in notes and accounts payable, trade compared to a decrease in the previous fiscal year. This increase in net cash inflow was partially offset by an increase in inventory, notes and accounts receivable, trade and contract assets compared to a decrease in the previous fiscal year.

The Financial Services segment had a net cash inflow of 247.6 billion yen, a decrease of 356.6 billion yen year-on-year. This decrease was primarily due to a year-on-year decrease in net income after taking into account non-cash adjustments such as (gain) loss on marketable securities and securities investments, net.

Investing Activities: During the current fiscal year, Sony used 1 trillion 781.5 billion yen of net cash in investing activities, an increase of 429.2 billion yen year-on-year.

For all segments excluding the Financial Services segment, there was a net cash outflow of 581.2 billion yen, an increase of 218.1 billion yen year-on-year. This increase was mainly due to an increase in payments for fixed asset purchases including semiconductor manufacturing equipment, as well as a cash outflow resulting from a payment for the purchase of shares of Bilibili. Additionally, the previous fiscal year included the cash inflow from the sale of all of Sony’s shares of Olympus Corporation.

The Financial Services segment used 1 trillion 200.4 billion yen of net cash in investing activities, an increase of 211.3 billion yen year-on-year. This increase was mainly due to a year-on-year increase in payments for investments and advances at Sony Bank Inc. (“Sony Bank”).

Financing Activities: Net cash inflow from financing activities during the current fiscal year was 667.0 billion yen, an increase of 601.3 billion yen year-on-year.

For all segments excluding the Financial Services segment, there was a 252.6 billion yen net cash outflow, a decrease of 124.5 billion yen year-on-year. This decrease was mainly due to the procurement of approximately 2 billion U.S. dollars in the form of a long-term bank loan in July 2020, as well as the redemption of straight bonds and the repayment of long-term debt in the previous fiscal year. This decrease was partially offset by the payment of 396.7 billion yen for the acquisition of all the shares of Sony Financial Holdings Inc. (“SFH”) and the related stock acquisition rights for the purpose of making SFH into a wholly-owned subsidiary of Sony Group Corporation. In order to fund the acquisition of all the shares of SFH and the related stock acquisition rights, a total of 396.5 billion yen in short-term bank borrowings was secured in July and October of 2020, of which the entire amount was repaid by the end of March 2021.

In the Financial Services segment, there was a 900.0 billion yen net cash inflow, an increase of 474.7 billion yen year-on-year. This increase was primarily due to a larger increase in deposits from customers at Sony Bank and an increase in short-term borrowings at Sony Life Insurance Co., Ltd. (“Sony Life”).

Total Cash and Cash Equivalents: Accounting for the above factors and the effect of fluctuations in foreign exchange rates, the total outstanding balance of cash and cash equivalents at March 31, 2021 was 1 trillion 787.0 billion yen. Cash and cash equivalents of all segments excluding the Financial Services segment was 1 trillion 289.8 billion yen at March 31, 2021, an increase of 327.4 billion yen compared with the balance as of March 31, 2020. Within the Financial Services segment, the outstanding balance of cash and cash equivalents was 497.2 billion yen at March 31, 2021, a decrease of 52.8 billion yen compared with the balance as of March 31, 2020.

* * * * *

Outlook for the Fiscal Year Ending March 31, 2022

Because Sony will voluntarily adopt IFRS starting in the first quarter of the fiscal year ending March 31, 2022, the following forecast is based on IFRS. Below are direct comparisons of the U.S. GAAP-based results for the fiscal year ended March 31, 2021 and the IFRS-based results forecast for the fiscal year ending March 31, 2022. Please refer to pages 11 to 14, “Effects of Transition to International Financial Reporting Standards (IFRS), as of February 3, 2021” in “Supplemental Information,” for an explanation of the major expected impacts of the voluntary adoption of IFRS on Sony’s consolidated financial statements.

The forecast for consolidated results for the fiscal year ending March 31, 2022 is as follows:

	(Billions of yen)
	March 31, 2021 Results		March 31, 2022 April Forecast		Change from March 31, 2021 Results
	(US GAAP)		(IFRS)		(Reference)
Sales	¥	8,999.4	¥	9,700	+ ¥700.6 bil	+ 7.8	%
Operating income		971.9		930	- 41.9 bil	- 4.3
Income before income taxes		1,192.4		905	- 287.4 bil	- 24.1
Net income attributable to Sony Group Corporation’s stockholders		1,171.8		660	- 511.8 bil	- 43.7

For all segments excluding the Financial Services segment *		March 31, 2021 Results				March 31, 2022 April Forecast			Change from March 31, 2021 Results
Net cash provided by operating activities			1,122.2				910		- ¥212.2 bil			- 18.9	%

* Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with U.S. GAAP and IFRS. However, Sony believes that this disclosure may be useful information to investors. Please refer to page F-10 for details about the preparation of the Condensed Statements of Cash Flows.

Assumed foreign currency exchange rates for the fiscal year ending March 31, 2022 are below.

	(For your reference) Average foreign currency exchange rates for the fiscal year ended March 31, 2021	Assumed foreign currency exchange rates for the fiscal year ending March 31, 2022
1 U.S. dollar	106.1 yen	approximately 107 yen
1 Euro	123.7 yen	approximately 126 yen

Sales for the fiscal year ending March 31, 2022 are expected to increase year-on-year primarily due to an expected significant increase in sales in the Pictures segment and expected increases in sales in the G&NS and EP&S segments, partially offset by a significant decrease in sales in the Financial Services segment.

Operating income is expected to decrease year-on-year due to expected decreases in operating income in the Music, G&NS and I&SS segments, partially offset by expected increases in operating income in the EP&S, Financial Services and Pictures segments.

Income before income taxes is expected to decrease significantly year-on-year as a result of unrealized gains and losses on securities not being included in the April forecast. Sony recorded 247.0 billion yen of unrealized gains on securities in the fiscal year ended March 31, 2021.

Based on U.S. GAAP, in the fiscal year ended March 31, 2021, Sony recorded unrealized gains and losses on securities as other income or expenses. Based on IFRS, in the fiscal year ending March 31, 2022, such gains and losses will be recorded as other comprehensive income with the exception of certain securities.

Net income attributable to Sony Group Corporation’s stockholders is expected to decrease significantly year-on-year mainly due to the impact of the above-mentioned decrease in income before income taxes and an increase in tax expense following the reversal of valuation allowances recorded against deferred tax assets in the fiscal year ended March 31, 2021.

* * * * *

Business Segment Information

“Sales” in each business segment represents sales recorded before intersegment transactions are eliminated. “Operating income (loss)” in each business segment represents operating income (loss) reported before intersegment transactions are eliminated and excludes unallocated corporate expenses. For details regarding each segment’s product categories, please refer to page F-9.

Due to organizational changes as of April 1, 2021, from the first quarter of the fiscal year ending March 31, 2022, Sony will transfer some of the businesses and functions previously included within All Other and Corporate and elimination to the EP&S segment, and make changes to the business segment classification for performance reporting. As a result of this segment change, sales and operating income (loss) for EP&S and All Other, Corporate and elimination for the fiscal year ended March 31, 2021 in the below chart have been reclassified to conform to the presentation for the fiscal year ending March 31, 2022. For details about this reclassification, please refer to the reconciliation on pages 7 and 8.

This reclassification is not a presentation in accordance with U.S. GAAP (for details, please refer to “Business Segment Information” on page F-6) as noted in Sony’s consolidated financial statements, but is presented to provide investors with an understanding of Sony’s business segment information by providing a measure that aligns with the way Sony will manage its business. Sony’s management will use this measure to review operating trends and perform analytical comparisons. This supplemental non-U.S. GAAP measure should be considered in addition to, not as a substitute for, Sony’s sales and operating income in accordance with U.S. GAAP.

	(Billions of yen)

	March 31, 2020 Results			March 31, 2021 Results			March 31, 2021 Results (Reclassified)			March 31, 2022 April Forecast
	(U.S. GAAP)			(U.S. GAAP)			(U.S. GAAP)			(IFRS)
Game & Network Services (G&NS)
Sales		1,977.6			2,656.3			-			2,900
Operating income		238.4			342.2			-			325
Music
Sales		849.9			939.9			-			990
Operating income		142.3			188.1			-			162
Pictures
Sales		1,011.9			758.8			-			1,140
Operating income		68.2			80.5			-			83
Electronics Products & Solutions (EP&S)
Sales		1,991.3			1,920.7			2,066.5			2,260
Operating income		87.3			139.2			134.1			148
Imaging & Sensing Solutions (I&SS)
Sales		1,070.6			1,012.5			-			1,130
Operating income		235.6			145.9			-			140
Financial Services
Financial services revenue		1,307.7			1,668.9			-			1,400
Operating income		129.6			164.6			-			170
All Other, Corporate and elimination
Operating loss		(55.9	)		(88.5	)		(83.4	)		(98	)
Consolidated
Sales		8,259.9			8,999.4			-			9,700
Operating income		845.5			971.9			-			930

Game & Network Services (G&NS)

Results for the fiscal year ended March 31, 2021

Sales increased 678.7 billion yen (34%) year-on-year to 2 trillion 656.3 billion yen (a 35% increase on a constant currency basis). This significant increase in sales was primarily due to an increase in game software sales including add-on content and an increase in hardware sales due to the launch of PlayStation®5 (“PS5™”).

Operating income increased 103.8 billion yen year-on-year to 342.2 billion yen. This significant increase was primarily due to the impact of the above-mentioned increase in game software sales, and an increase in Network Services sales, primarily from PlayStation®Plus, partially offset by a loss resulting from strategic price points for PS5™ hardware that were set lower than the manufacturing costs, as well as an increase in selling, general and administrative expenses related to the launch of PS5™. During the current fiscal year, there was a 15.3 billion yen positive impact from foreign exchange rate fluctuations.

Forecast for the fiscal year ending March 31, 2022

Sales are expected to increase year-on-year mainly due to an expected increase in hardware unit sales and the impact of foreign exchange rates, partially offset by a decrease in sales of non-first-party titles including add-on content. Operating income is expected to decrease year-on-year primarily due to the above-mentioned expected decrease in sales of non-first-party titles, and an expected increase in cost, primarily for game software development, partially offset by an expected increase in revenues from first-party titles and an expected improvement in hardware profitability.

Music

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

* Sony/ATV Music Publishing LLC, which manages EMI Music Publishing Ltd., changed its trade name to Sony Music Publishing LLC as described in the news release titled “Introducing the New Sony Music Publishing” dated February 12, 2021.

Results for the fiscal year ended March 31, 2021

Sales increased 90.0 billion yen (11%) to 939.9 billion yen (a 12% increase on a constant currency basis). The significant increase in sales was primarily due to higher Recorded Music and Visual Media and Platform sales. Sales for Recorded Music increased mainly due to an increase in revenues from streaming services. Sales for Visual Media and Platform increased mainly due to an increase in sales for the anime business primarily reflecting the contribution of Demon Slayer – Kimetsu no Yaiba – the Movie: Mugen Train and an increase in revenues for mobile game applications. Operating income increased 45.7 billion yen year-on-year to 188.1 billion yen. This significant increase was primarily due to the impact of the above-mentioned increase in sales, in addition to a 6.5 billion yen gain recorded on the sale of a portion of shares of Pledis and a 5.4 billion yen gain recorded in connection with the transfer of an overseas business.

Forecast for the fiscal year ending March 31, 2022

Sales are expected to increase year-on-year mainly due to higher sales for Recorded Music and Music Publishing primarily resulting from an expected increase in revenues from streaming services. This increase in sales is expected to be partially offset by decreases in both the contribution of Demon Slayer – Kimetsu no Yaiba – the Movie: Mugen Train, which was released in the previous fiscal year, and in revenues from mobile game applications in Visual Media and Platform. Operating income is expected to decrease year-on-year primarily due to the impact of the above-mentioned decrease in Visual Media and Platform sales as well as the absence of the 6.5 billion yen gain on the sale of a portion of shares of Pledis Entertainment Co., Ltd. and the 5.4 billion yen gain in connection with the transfer of an overseas business that were recorded during the previous fiscal year. These negative factors are expected to be partially offset primarily by the impact of the above-mentioned expected increase in Recorded Music and Music Publishing sales.

Pictures

The Pictures segment results are the yen-translated results of Sony Pictures Entertainment Inc. (“SPE”), which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis. Management analyzes the results of SPE in U.S. dollars, so discussion of certain portions of its results is specified as being on “a U.S. dollar basis.”

Results for the fiscal year ended March 31, 2021

Sales decreased 253.1 billion yen, a 25% decrease year-on-year (a 23% decrease on a U.S. dollar basis), to 758.8 billion yen. The significant decrease in sales was primarily due to decreases in sales for Motion Pictures and Television Productions. The decrease in sales for Motion Pictures was due to the absence of any major theatrical releases in the current fiscal year resulting from the impact of theater closures due to COVID-19, partially offset by higher home entertainment sales of prior year and catalog titles. The decrease in sales for Television Productions was due to lower deliveries of new shows primarily due to production delays related to COVID-19.

Operating income increased 12.3 billion yen year-on-year to 80.5 billion yen. The increase in operating income was primarily due to lower marketing costs in Motion Pictures as a result of the absence of major theatrical releases due to COVID-19, as well as the impact of the above-mentioned home entertainment sales, partially offset by the above-mentioned decreases in sales. Operating income also benefited from a decrease in charges related to a channel portfolio review in Media Networks which totaled 5.0 billion yen in the current fiscal year compared to 17.0 billion yen in the previous fiscal year.

Forecast for the fiscal year ending March 31, 2022

Sales are expected to significantly increase year-on-year primarily due to the impact of an expected increase in sales for Motion Pictures resulting from the increase in theatrical releases as theaters reopen, an increase in sales for TV Productions including revenues from the licensing of Seinfeld and an expected increase in sales for Media Networks. Operating income is expected to increase year-on-year primarily due to the above-mentioned increase in sales, partially offset by the increase in marketing costs in support of upcoming theatrical releases.

Electronics Products & Solutions (EP&S)

Results for the fiscal year ended March 31, 2021 (Before segment realignment)

Sales decreased 70.5 billion yen (4%) year-on-year to 1 trillion 920.7 billion yen (a 3% decrease on a constant currency basis). This decrease in sales was primarily due to a decrease in sales of digital cameras, broadcast- and professional-use products and Audio and Video resulting from lower unit sales as well as the impact of foreign exchange rates, partially offset by an increase in sales of televisions resulting from an improvement in the product mix.

Operating income increased 51.9 billion yen year-on-year to 139.2 billion yen. This significant increase in operating income was primarily due to reductions in operating costs mainly within Mobile Communications, as well as an improvement in the product mix mainly of televisions and digital cameras, partially offset by the impact of the above-mentioned decrease in sales. During the current fiscal year, there was a 6.6 billion yen positive impact from foreign exchange rate fluctuations.

Forecast for the fiscal year ending March 31, 2022 (Reclassified*)

Sales are expected to increase mainly due to an increase in sales of televisions resulting from an improvement in the product mix and an increase in sales of digital cameras resulting from higher unit sales, as well as the impact of foreign exchange rates. Operating income is expected to increase year-on-year primarily due to the above-mentioned increase in sales as well as the positive impact of foreign exchange rates, partially offset by an increase in costs resulting from an increase in sales.

* A reconciliation between the sales and operating income (loss) of the EP&S segment and the reclassified EP&S segment for the fiscal year ended March 31, 2021 is on page 8. The reconciliation in the following table includes the sales, cost of goods sold, and selling, general and administrative expenses related to businesses and functions which were newly included in the EP&S segment as a result of changes to the organizational structure of the segment announced on November 17, 2020 in the news release entitled “Sony Group Organizational Changes and Executive Appointments – Transition to new management structure for Electronics Products & Solutions business.” These amounts have been deducted from All Other, Corporate and elimination (Reclassified).

	(Billions of yen)
	EP&S		All Other		Corporate and elimination
Before Reconciliation
Sales		1,920.7		229.3		-187.0
Operating income		139.2		11.4		-99.9
Reconciliation
Sales		145.7		-128.5		-17.2
Operating income		-5.1		-3.5		8.6
Reclassified
Sales		2,066.5		100.7		-204.2
Operating income		134.1		7.8		-91.2

Imaging & Sensing Solutions (I&SS)

Results for the fiscal year ended March 31, 2021

Sales decreased 58.1 billion yen (5%) year-on-year to 1 trillion 12.5 billion yen (a 3% decrease on a constant currency basis). This decrease in sales was mainly due to a decrease in sales of image sensors for mobile products reflecting a deterioration of the product mix, partially offset by an increase in unit sales. This decrease in sales was also due to the impact of foreign exchange rates and a decrease in sales of image sensors for digital cameras reflecting a decrease in unit sales primarily as a result of the impact of COVID-19.

Operating income decreased 89.7 billion yen year-on-year to 145.9 billion yen. This significant decrease was mainly due to an increase in research and development expenses as well as in depreciation and amortization expenses, the impact of the above-mentioned decrease in sales, the negative impact of foreign exchange rates and the above-mentioned 7.2 billion yen of inventory write-downs of certain image sensors for mobile products whose shipments were suspended as a result of U.S. export restrictions. During the current fiscal year, there was an 8.6 billion yen negative impact from foreign exchange rate fluctuations.

Forecast for the fiscal year ending March 31, 2022

Sales are expected to increase primarily due to an expected increase in sales of image sensors for mobile products due to an increase in unit sales, partially offset by a deterioration of the product mix, as well as an expected increase in sales of image sensors for digital cameras due to an increase in unit sales. Operating income is expected to decrease year-on-year primarily due to an increase in research and development expenses as well as in depreciation and amortization expenses, partially offset by the impact of the above-mentioned increase in sales.

Financial Services

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

Results for the fiscal year ended March 31, 2021

Financial services revenue increased 361.2 billion yen year-on-year to 1 trillion 668.9 billion yen mainly due to significant increases in revenue at Sony Life and Sony Bank. Revenue at Sony Life increased 299.2 billion yen year-on-year to 1 trillion 470.9 billion yen, mainly due to an increase in net gains on investments in the separate accounts, partially offset by a decrease in premiums from single premium insurance despite an increase in the policy amount in force. The increase in revenue at Sony Bank was due to an improvement in valuation gains and losses on securities.

Operating income increased 35.0 billion yen year-on-year to 164.6 billion yen due to significant increases in operating income at Sony Bank and Sony Assurance, partially offset by an impairment charge against long-lived assets recorded in the nursing care business. The increase in operating income at Sony Bank was due to the above-mentioned improvement in valuation gains and losses on securities, and the increase in operating income at Sony Assurance was due to a decline in the loss ratio for automobile insurance. Operating income at Sony Life increased 4.5 billion yen year-on-year to 128.0 billion yen. This increase in operating income was mainly due to a decrease in the provision of policy reserves, primarily driven by the improvement in the stock market and an increase in interest rates, partially offset by an overall deterioration in the provision of policy reserves for minimum guarantees for variable life insurance and other products, resulting from market fluctuations, and net gains and losses on derivative transactions to hedge market risks, as well as expenses recorded for various provisions related to COVID-19.

Forecast for the fiscal year ending March 31, 2022

Financial services revenue is expected to decrease significantly year-on-year primarily because the positive impact on net gains on investments in the separate accounts at Sony Life, resulting from positive market conditions in the fiscal year ended March 31, 2021, is not incorporated into the forecast. Operating income is expected to increase year-on-year primarily due to the absence of the impairment charge against long-lived assets in the nursing care business recorded in the fiscal year ended March 31, 2021 and due to an increase in insurance premium revenue reflecting an increase in the policy amount in force at Sony Life. Partially offsetting these factors is the absence of the positive impact of the gains from market fluctuations in the fiscal year ended March 31, 2021 (including the impact of changes in the classification and measurement of financial instruments resulting from the adoption of IFRS starting in the fiscal year ending March 31, 2022).

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

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

Note

Sales on a Constant Currency Basis and Impact of Foreign Exchange Rate Fluctuations

The descriptions of sales on a constant currency basis reflect sales calculated by applying the yen’s monthly average exchange rates from the same period of the previous fiscal year to local currency-denominated monthly sales in the relevant period of the current fiscal year. For SME and SMP in the Music segment, the constant currency amounts are calculated by applying the monthly average U.S. dollar / yen exchange rates after aggregation on a U.S. dollar basis.

The Pictures segment reflects the operations of SPE, a U.S.-based operation that aggregates the results of its worldwide subsidiaries in U.S. dollars. Because of this, the description of the year-on-year change in sales for the Pictures segment represents the change on a U.S. dollar basis.

The impact of foreign exchange rate fluctuations on sales is calculated by applying the change in the yen’s periodic weighted average exchange rate for the same period of the previous fiscal year from the relevant period of the current fiscal year to the major transactional currencies in which the sales are denominated. The impact of foreign exchange rate fluctuations on operating income (loss) is calculated by subtracting from the impact on sales the impact on cost of sales and selling, general and administrative expenses calculated by applying the same major transactional currencies calculation process to cost of sales and selling, general and administrative expenses as for the impact on sales. The I&SS segment enters into its own foreign exchange hedging transactions, and the impact of those transactions is included in the impact of foreign exchange rate fluctuations on operating income (loss) for that segment.

This information is not a substitute for Sony’s consolidated financial statements measured in accordance with U.S. GAAP. However, Sony believes that these disclosures provide additional useful analytical information to investors regarding the operating performance of Sony.

Financial Target of the Fourth Mid-Range Plan

At the Corporate Strategy Meeting for the fiscal year ending March 31, 2022 scheduled to be held on May 26, 2021, Sony Group Corporation plans to announce a mid-range plan (“Fourth Mid-Range Plan”) for the three fiscal years starting on April 1, 2021 and ending on March 31, 2024.

In order to continue managing Sony with a long-term view, a three-year cumulative key performance indicator will be established. That indicator, which will be the most important metric of group performance for the Fourth Mid-Range Plan, will be Adjusted EBITDA*. Sony Group Corporation will target total Adjusted EBITDA of 4.3 trillion yen on a consolidated basis for the three fiscal years starting on April 1, 2021 and ending on March 31, 2024.

Management believes that Adjusted EBITDA is a performance metric suitable for the long-term management that Sony prioritizes. This is because (i) it represents the sustainable earnings power of a business because it does not include the effects of one-time gains and losses, (ii) it enables management to confirm that all the businesses of the Sony Group, including the Financial Services business which has become a wholly-owned subsidiary, are expanding over the mid- to long-term through cycles of investment and return, and (iii) it is often used to calculate corporate value.

* EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is calculated by the following formula, and Adjusted EBITDA excludes the profit and loss amount that Sony deems to be non-recurring and discloses in the Quarterly Financial Statements, the Earnings Presentation Slides, the Quarterly Securities Reports and the Form 20-F. The financial figures in the Fourth Mid-Range Plan are based on IFRS.

EBITDA = Net income attributable to Sony Group Corporation’s stockholders + Net income attributable to noncontrolling interests + Income taxes + Interest expenses, net, recorded in Financial income and Financial expense - Gain on revaluation of equity securities, net, recorded in Financial income and Financial expense + Depreciation and amortization expense excluding amortization for film costs included in Content assets and deferred insurance acquisition costs.

EBITDA and Adjusted EBITDA are not measures in accordance with IFRS. However, Sony believes that this disclosure may be useful information to investors. EBITDA and Adjusted EBITDA should be considered in addition to, not as a substitute for, Sony’s results and cash flows in accordance with IFRS.

* * * * *

Basic Views on Selection of Accounting Standards

Sony will voluntarily adopt IFRS from the first quarter of the fiscal year ending March 31, 2022, in lieu of the currently applied U.S. GAAP, with the goal of further streamlining and maintaining the quality of Sony’s financial and management reporting systems over the mid- to long-term, and improving the international comparability of financial information in the capital markets.

Supplemental Information

Effects of Transition to International Financial Reporting Standards (IFRS), as of February 3, 2021

The following information is to provide investors with an understanding of Sony’s IFRS-based results forecast for the fiscal year ending March 31, 2022, by reprinting the material released on February 3, 2021.

Effects of Transition to International Financial Reporting Standards (IFRS) Sony Corporation February 3, 2021 (Note) This reference material is to provide investors with an understanding of Sony’s IFRS-based results forecast for the fiscal year ending March 31, 2022, by reprinting the material released on February 3, 2021. Reference Material

As announced in the “Notice Regarding Voluntary Adoption of International Financial Reporting Standards (IFRS)” dated February 3, 2021, Sony has decided to voluntarily adopt IFRS beginning in the fiscal year starting April 1, 2021 in lieu of the currently applied generally accepted accounting principles in the United States (“U.S. GAAP”).　This material was prepared for the purpose of explaining the major expected impacts of the adoption of IFRS on Sony’s consolidated financial statements. The information contained in this material is preliminary, is unaudited and does not necessarily reflect every impact of the adoption of IFRS on Sony’s consolidated financial statements and therefore may differ from Sony’s actual financial information based on IFRS to be disclosed at a later date. In addition, this material does not constitute an offer of securities for sale in the United States or any other jurisdiction.Sony plans to disclose its consolidated financial statements in accordance with IFRS from the first quarter of the fiscal year ending March 31, 2022. Planned disclosure for each accounting period is as follows:* The forecast for the fiscal year ending March 31, 2022 to be included in the earnings release for the fiscal year ending March 31, 2021 will be based on IFRS. 2 Accounting period Disclosure materials Accounting standards applied Fiscal year ending March 31, 2021 Earnings release (financial statements and outlook)Consolidated financial statements pursuant to the Companies Act of Japan Annual Securities Report / Form 20-F U.S. GAAP* First quarter and subsequent quarters of the fiscal year ending March 31, 2022 Quarterly earnings release (quarterly financial statements and outlook)Quarterly Securities Report IFRS Fiscal year ending March 31, 2022 Earnings release (financial statements and outlook)Consolidated financial statements pursuant to the Companies Act of Japan Annual Securities Report / Form 20-F IFRS Notes Regarding the Material

Decrease in deferred acquisition costs related to the above change -413.0 Increase in investments due to a change in the measurement method of debt securities at Sony Life Insurance Co., Ltd. (“Sony Life”) +2,433.7 Assets · The numbers (1) to (4) above correspond to the numbers of the items described on p.4-5 of this material.· The balances presented as U.S. GAAP are adjusted to reflect the adoption of the new accounting standards from the balances disclosed in Sony’s most recent Form 20-F. (Refer to p.30-31 of Sony’s Quarterly Securities Report for the three months ended September 30, 2020). Increase in insurance liabilities and deferred tax liabilities related to a change in the measurement method of debt securities at Sony Life +761.1 Increase in accumulated other comprehensive income and noncontrolling interests related to a change in the measurement method of debt securities at Sony Life +1,259.6 Liabilities Liabilities Equity Equity +724.3 +1,210.1 Assets (Bln yen / Rounded and Unaudited) U.S. GAAP IFRS U.S. GAAP (2) Decrease in goodwill due to a change in the testing units under IFRS -96.8 +1,934.4 * The total balance of equity is not affected as these reclassifications occur within equity. 3 (3)&(4) Transfer of cumulative translation adjustments on foreign operations and adjustment of remeasurements of defined benefit liabilities from accumulated other comprehensive income to retained earnings* Major Impacts on IFRS Balance Sheet as of April 1, 2020, Transition Date

Item U.S. GAAP IFRS Detail (1) Measurement method for debt securities such as bonds held by Sony Life Amortized cost measurement Fair value measurement(“FVOCI”)*1 Expected to adopt fair value measurement method for debt securities held for ALM*2 purposes in accordance with classification requirements of financial assets under IFRSAs a result of the change in the fair value measurement, it will impact the remeasurement of deferred insurance acquisition costs and insurance liabilities of the related insurance contracts Expected to record the impact in accumulated other comprehensive income in equity (net of tax effects and noncontrolling interests adjustments) (2) Impairment testing units for goodwill Reporting unit(operating segment or one level below an operating segment) CGU*3 or group of CGUs that is expected to benefit from the synergies of business combinations Because certain CGUs are grouped at a lower level than a reporting unit, the goodwill was allocated to multiple CGUsAs a result of required impairment tests as of the transition date, goodwill allocated to certain CGUs (including businesses already sold or disposed) is expected to be determined irrecoverable and impairment losses will be recognized in retained earnings 4 *1 Fair Value through Other Comprehensive Income (method in which gains or losses from fair value measurements are recognized in other comprehensive income).*2 Asset-liability management (“ALM”) indicates the practice of managing assets and liabilities comprehensively against interest rate risk of insurance liabilities.*3 Cash-generating unit (“CGU”) is the smallest group for internal management purposes that generates cash flows largely independently from other groups. Major Impacts on Balance Sheets from IFRS Transition

Item U.S. GAAP IFRS Detail (3) Translation adjustments on foreign operations ― Optionally able to elect the cumulative translation adjustments balance to be zero at the transition date Expected to elect cumulative translation adjustments to be zero at the transition date and to transfer it from accumulated other comprehensive income to retained earnings* (4) Adjustment of remeasurements of defined benefit liabilities (actuarial gains and losses) Recognize in accumulated other comprehensive income Recognize in accumulated other comprehensive income and transfer to retained earnings immediately Expected to retrospectively apply accounting policies under IFRS and transfer the adjusted balance as of the transition date from accumulated other comprehensive income to retained earnings* 5 * The total balance of equity is not affected as these reclassifications occur within equity. Major Impacts on Balance Sheets from IFRS Transition

U.S. GAAP IFRS *1　Until FY2023, when IFRS 17 “Insurance Contracts” becomes effective for Sony Life, which is included in the Financial Services segment, the asset side is measured at fair value based on IFRS 9 “Financial Instruments” by being recorded through accumulated other comprehensive income on the balance sheet and as a result Sony Corporation’s stockholders' equity is expected to increase temporarily. This will be a factor that lowers the consolidated return on equity (ROE) when calculated under IFRS as compared to the calculation prepared under the application of U.S. GAAP.*2　Sony Financial Holdings Inc. (“SFH”) became a wholly-owned subsidiary on September 2, 2020; however, because the balances presented above are as of April 1, 2020, the amounts do not reflect the full acquisition of SFH. After the full acquisition, an increase in noncontrolling interests related to a change in the measurement method of debt securities at Sony Life is expected to be treated as an increase in Sony Corporations’ stockholders’ equity. Sony Corporation’s stockholders’ equity Noncontrolling interests 5,994.5 4,784.4 Increase in Sony Corporation’s stockholders’ equity·(+) Change in the measurement method of debt securities at Sony Life*1　·(--) Impairment testing unit differences in accounting standards for goodwill +752.9+819.5-96.8 Noncontrolling interests·(+) Change in the measurement method of debt securities at Sony Life*2　 +457.2+440.1 Contributing Factors (Bln yen / Rounded and Unaudited) 6 Major Impacts on Equity of IFRS Balance Sheet as of April 1, 2020, Transition Date

Item U.S. GAAP IFRS Detail Impacts on sales and operating income Financial services revenue and expenses Changes in classification and measurement method for financial instruments held in the Financial Services segment: E.g., changes in measurement method for certain debt securities held by Sony Bank Inc. Elected to record unrealized gains or losses in financial services revenue Amortized cost measurement No recording of unrealized gains or losses from fair value measurements under IFRS Impacts on income before income taxes and net income attributable to Sony Corporation’s stockholders Other income or expenses Impacts expected from excluding gains and losses on equity securities such as stocks Other income or expenses Other comprehensive income Expected to elect to not record in profit or loss under IFRS* 7 * Except for certain securities Major Impacts on Profit or Loss from IFRS Transition

Item U.S. GAAP IFRS Detail Consolidated Principal payments for operating lease liabilities Operating activities Financing activities Cash flow from operating activities increases compared to U.S. GAAP Purchases and sales of content assets*1 Investing activities*2 Operating activities Cash flow from operating activities decreases when content assets are purchased compared to U.S. GAAP Financial Services Fund management (investments and advances) Investing activities Operating activities Under U.S. GAAP, classification of these items is defined by the nature of transactions, while IFRS allows the principal revenue-producing activities to be classified in operating activities Financing (deposits from customers, repurchase agreement, secured call money, etc.) Financing activities Operating activities Policyholders’ account in the life insurance business Financing activities Operating activities 8 *1 Content assets include music catalogs, artist contracts, music distribution rights, film costs, etc. *2 Except for film costs, which are classified in operating activities under U.S. GAAP Major Impacts on Cash Flow from IFRS Transition

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