Sony President Hiroki Totoki : Acquisition related costs will be increasing by 20% YoY in this next fiscal year.
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Yes $5B left from the first 2 trillion Yen. Sony will spend for the upcoming mid-term plan another 2 trillion yen.
To get a more precise idea I went to the original source:
This is for the whole Sony, not only gaming:
The reason is that it's to compensate the rise of money spent on image sensor and servers for corporate R&D and (I assume due to planned increase in PSN userbase, GaaS and cloud gaming) G&NS.
And in addition to this, because they want to be conservative and careful with acquisitions and their timing due to the current M&A market environment.
Maybe regarding gaming they saw FTC and CMA are too aggressive with big gaming acquisitions, or maybe someone they wanted to acquire doesn't want to sell, or maybe they delayed potential future big gaming acquisitions until the ABK is totally dead or completed to don't help MS get it approved.
So I wouldn't expect more acquisitions to be announced after the Firewalk one, or at least no new acquisitions to be completed this fiscal year, pretty likely they'll leave new/unannounced acquisitions for future fiscal years.
On a separate note, I found that they almost didn't leave money left in the budget to make more acquisitions this FY:
cc @Angie, who may be interested on this post.
- This is under the G&NS, so it does affects SIE and not other divisions
- Mentions acquisitions, so doesn't include investments or stock repurchases
- In FY23 they plan to spend aprox. 65B yen ($477M) in 'expenses associated with acquisitions'
- In another slide they mention they spent in FY22 52.7B yen instead ($386,8) in 'expenses associated with acquisitions'
- This isn't the money paid for new acquisitions themselves, this is expenses associated with acquisitions, which could be from acquisitions completed and announced in previous years (stuff like bonuses for workers for not leaving the first few years after being acquired, who knows if related taxes, maybe a delayed payment of a portion of the acquisition, or maybe even moving an acquired studio to a bigger office or stuff like that)
- It doesn't mean that the gaming division has $477M for new acquisitions that would be announcing during this FY
- It doesn't mean that they plan to announce acquisitions for a value 20% higher than the ones they announced the previous fiscal year
Edit: Seems that the 2T+ budget was reduced today to 1.8T yen ($13,2B).
This is for the whole Sony, not only gaming:
The reason is that it's to compensate the rise of money spent on image sensor and servers for corporate R&D and (I assume due to planned increase in PSN userbase, GaaS and cloud gaming) G&NS.
And in addition to this, because they want to be conservative and careful with acquisitions and their timing due to the current M&A market environment.
Maybe regarding gaming they saw FTC and CMA are too aggressive with big gaming acquisitions, or maybe someone they wanted to acquire doesn't want to sell, or maybe they delayed potential future big gaming acquisitions until the ABK is totally dead or completed to don't help MS get it approved.
So I wouldn't expect more acquisitions to be announced after the Firewalk one, or at least no new acquisitions to be completed this fiscal year, pretty likely they'll leave new/unannounced acquisitions for future fiscal years.
On a separate note, I found that they almost didn't leave money left in the budget to make more acquisitions this FY:
- The current 3 years budget instead of being 2T now has been reduced to 1.8T yen ($13,2B)
- The whole Sony spent 1.052T yen ($7,7B) on 'investing activities' this FY2022, an increase of 323.9B yen ($2.35B) YoY
- So they spent 731.1B Yen ($5.36B) during FY2021
- $13.2B (budget) - $7.7B (FY2022) - $5.36B (FY2021) = $0.14B (FY2023)
- This means there's $140M left to spend during FY2023 in all the acquisitions, investments and Sony stock repurchases of the whole Sony, not only gaming
cc @Angie, who may be interested on this post.
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In of the slides they mention something close to 30 billion dollars USD. I guess thats for the next 3 years?
The line about borrowing and being at 4 trillion yen. So i guess whatever acquisitions they plan to make next theyre going to borrow money if they dont have it on hand. Basically that entire slide is an extremely wonky way of saying most of the budget is going to games and services and we're willing to borrow up to 30 billion for acquisitions. At least thats how I interpret it.
The line about borrowing and being at 4 trillion yen. So i guess whatever acquisitions they plan to make next theyre going to borrow money if they dont have it on hand. Basically that entire slide is an extremely wonky way of saying most of the budget is going to games and services and we're willing to borrow up to 30 billion for acquisitions. At least thats how I interpret it.
So overall Sony have 2 Trillion yen (14.5 bil USD) to spend for the next year or just the 5 bil USD left over?
Yes add the remaining $5B to the converted $14,68B. That’s still close to $20B, still a lot of cash. Sony can also increase anytime or better adjust it for their mid-term plan. IR is on May, so we will probably know more by then.To get a more precise idea I went to the original source:
- This is under the G&NS, so it does affects SIE and not other divisions
- Mentions acquisitions, so doesn't include investments or stock repurchases
- In FY23 they plan to spend aprox. 65B yen ($477M) in 'expenses associated with acquisitions'
- In another slide they mention they spent in FY22 52.7B yen instead ($386,8) in 'expenses associated with acquisitions'
- This isn't the money paid for new acquisitions themselves, this is expenses associated with acquisitions, which could be from acquisitions completed and announced previous years (stuff like bonuses for workers for not leaving the first few years after being acquired, who knows if related taxes, maybe a delayed payment of a portion of the acquisition, or maybe even moving an acquired studio to a bigger office or stuff like that)
- It doesn't mean that the gaming division has $477 for new acquisitions that would be announcing during this FY
- It doesn't mean that they plan to announce acquisitions for a value 20% higher than the ones they announced the previous fiscal year
Ok nice. 2T yen are $14,68B today.
Both $5B remaining from last mid-term plan. And another 2 trillion yen will be spend with next mid-term plan.
In of the slides they mention something close to 30 billion dollars USD. I guess thats for the next 3 years?
The line about borrowing and being at 4 trillion yen. So i guess whatever acquisitions they plan to make next theyre going to borrow money if they dont have it on hand. Basically that entire slide is an extremely wonky way of saying most of the budget is going to games and services and we're willing to borrow up to 30 billion for acquisitions. At least thats how I interpret it.
No, see below.
No, see below.
No.
They had a plan to allocate their 4T ($29B) yen of cash for the 3 years period that ends in March 2024, where only 1.8T ($13,2B) of it goes to the 'strategic investment' budget (acquisitions+investments+Sony stock repurchases for the whole Sony, not only gaming). This 1.8T was originally estimated to be 2T or more but has been updated. The other part of the 4T goes to dividends and allocated for normal usage of their divisions (not related to investments or acquisitions).
The source of these 4T, the place where Sony got the money, was 2.4T from cash flow they already had, 0.4T ($5.1B) carried from the previous three years period and 1.1T from asset sales / debt financing.
- The current 3 years budget instead of being 2T now has been reduced to 1.8T yen ($13,2B)
- The whole Sony -not only gaming- spent 1.052T yen ($7,7B) on 'investing activities' (acquisitions+investments+Sony stock repurchases) this FY2022, an increase of 320.9B yen ($2.35B) YoY
- So they spent 731.1B Yen ($5.36B) during FY2021
- 13.2B - 7.7B - 5.36B = $0.14B. This means there's $140M left to spend during FY2023 in all the acquisitions, investments and Sony stock repurchases of the whole Sony, not only gaming.
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Sony didn‘t spend 4 trillion Yen. They said $5B are left but never confirmed the whole 4 trillion Yen are gone. Sony did spend only 2 trillion yen so far. Even if we go with your claim, they used it for share buybacks, they would need to announce it. So there a on top to remaining $5B (maybe leas now) the other 2 trillion Yen left. Sony’s initial plan was to spend them in the next mid-term plan. If Sony would have done something with the cash, it wouldn’t dispaear. And they can’t just reallocate it without informing investors. They would have to explain it in an investor call/earning call.
pitchbook.com
The biggest purchase was Bungie. Cash doesn’t disappear, as an public held company they are obligated to report changes.
Sony Company Profile: Stock Performance & Earnings | PitchBook
Information on stock, financials, earnings, subsidiaries, investors, and executives for Sony. Use the PitchBook Platform to explore the full profile.
The biggest purchase was Bungie. Cash doesn’t disappear, as an public held company they are obligated to report changes.
I reviewed the number, and Sony only has $140M of budget to spend in acquisitions+investments+stock repurchases during FY2023. And maybe spent them on Firewalk.
I edited my posts of this thread after I found extra stuff and fixed other stuff, see above the sources. I also explained there where this 30B number comes from (it's 29B+, and it isn't for acquisitions).
This post has the explanation of everything.
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I posted the receipts in this post, Sony only has $140M left of the budget to spend in FY2023:Sony didn‘t spend 4 trillion Yen. They said $5B are left but never confirmed the whole 4 trillion Yen are gone. Sony did spend only 2 trillion yen so far. Even if we go with your claim, they used it for share buybacks, they would need to announce it. So there a on top to remaining $5B (maybe leas now) the other 2 trillion Yen left. Sony’s initial plan was to spend them in the next mid-term plan. If Sony would have done something with the cash, it wouldn’t dispaear. And they can’t just reallocate it without informing investors. They would have to explain it in an investor call/earning call.
Sony Company Profile: Stock Performance & Earnings | PitchBook
Information on stock, financials, earnings, subsidiaries, investors, and executives for Sony. Use the PitchBook Platform to explore the full profile.
The biggest purchase was Bungie. Cash doesn’t disappear, as an public held company they are obligated to report changes.
Sony spent a part and reduced the budget today.
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I'd say that there won't be new acquisitions during the rest of the current fiscal year.
Or at least, to don't pay unannounced acquisitions during the current fiscal year since there won't be enough budget for them. But maybe they could announce an acquisition now but to don't complete it until after March, when I assume they'll have a new 3 years period budget.
Probably to wait until the ABK acquisition is over or completed, which I assume will be later than they, MS and ABK expected to don't give reasons to the regulators to approve it. And also to don't affect the operative income too much this year since they'll continue paying previous acquisitions and related costs during the current fiscal year.
Like I said, let’s not jump into conclusions.
This was published today:
Increase of 20% of their acquisitions. How should this be possible with only $150 Million???
They will allocate another budget on IR day.
This was published today:
Increase of 20% of their acquisitions. How should this be possible with only $150 Million???
They will allocate another budget on IR day.