Sales increased 35.4% year-on-year (a 25% increase on a constant currency basis) to 433.2 billion yen. This significant increase was primarily due to an increase in PlayStation®4 (“PS4”) software sales including sales through the network, the impact of foreign exchange rates, as well as an increase in PS4 hardware sales.

Operating income increased 35.8 billion yen year-on-year to 54.8 billion yen. This significant increase was primarily due to the above-mentioned increase in sales, partially offset by an increase in selling, general and administrative expenses. During the current quarter, there was a 3.1 billion yen positive impact from foreign exchange rate fluctuations.

Operating income includes a favorable adjustment of 5.1 billion yen that resulted from the recognition of internal royalties in the current quarter, rather than in the first quarter of the fiscal year ending March 31, 2018. This adjustment resulted from a discrepancy in the timing of when internal royalties were recognized at the relevant subsidiaries within the segment.