This Lord is Very Scientific-Chapter 735 - 667

(Anti-theft, to be released later.) Abstract: Accompanying the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to all citizens. The means of spreading games no longer sticks to rigid promotional patterns, and the influence of games has gradually expanded into every aspect of life. Correspondingly, game companies also need to continuously integrate resources, innovate, update, and improve performance in line with the rapid development of the times. The diversification strategy perfectly meets the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as the preferred model for enterprise development, also applies to game companies. This article uses Sanqi Mutual Entertainment Company as an example to illustrate the impact of the diversification strategy on the performance of game companies.

Keywords: Diversification Strategy; Game Company; Performance; Impact; Sanqi Mutual Entertainment Company

The diversification strategy is a market strategy adopted by enterprises in the course of operations to capture more new markets and develop new markets. It is a strategic planning that enterprises adopt to avoid the risks encountered during the operation of a single business and to targetedly and preparedly enter new business fields. Applying the diversification strategy to game companies can effectively improve their performance, bringing the development of game companies from quantitative change to qualitative change.

1. The Macro Background of Diversification Strategy

Entering 2021, under the effective control of the pandemic by the nation, people's lives have returned to normal, and the economic and cultural landscape also shows signs of great recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to pre-pandemic levels[1]. This is particularly advantageous news for the gaming industry, which occupies a large portion of the cultural industry. Although the pandemic did not cause significant impact on the gaming industry, the inability to conduct offline activities has still affected the performance of game companies. With the recovery of the cultural industry, this means that the great development and prosperity of the cultural industry can promote and drive more game companies towards sustained development[2].

From the outbreak of the pandemic last year to its current stabilization, the nation has issued relevant policies to support the development of the cultural industry from multiple aspects such as finance, systems, and finance. Although the pandemic has blocked people's travel, it cannot control the speed of online network dissemination. The emergence of more and more new media has driven the development of the cultural industry during the period of pandemic prevention and control. However, because every company wants to enter the online market, the competitive environment within the cultural industry has become very fierce. Many traditional offline enterprises could not withstand the pandemic's impact and were eliminated by society. However, in these short two years, many successfully transformed cultural industries have emerged. These enterprises mostly accelerated their transformation and upgrade relying on the diversification strategy model, and during the heightened consumption levels of residents during the pandemic prevention and control period, they have also gained significantly, obtaining more diversified development models and channels for income, for example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention and control period is worth learning from for most game companies[3].

2. Brief Analysis and Classification of Diversification Strategy

(1) Brief Analysis of Diversification Strategy

The diversification strategy was proposed by the father of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influential strategic model is involved in the management policies of multiple countries, leading to today where every large and small enterprise is seeking a place following the development model of diversification strategy[4].

(2) Classification and Meaning of Diversification Strategy

There are four types of diversification strategy: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different models derived from the diversification strategy also have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can satisfy users' new needs, thereby driving market consumption. Vertical integration, on the other hand, is when enterprises, based on their development status, longitudinally derive and infiltrate other market fields with the product industry chain to seek new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production range, achieving the entire process through the transformation of original technology. Conglomerate diversification focuses on the change in expanding the business range, requiring enterprises to link factors such as raw materials and technology related to their own products as well as the market to expand the business range[5].

3. The Impact of Diversification Strategy on Game Company Performance

It can be said that, in the operations of all game companies, the impact of diversification strategy on the performance of game companies is uniformly divided into two parts: changes in the operation model and shifts in strategic planning. The effects gradually produced from these two parts of transformation drive the improvement of company performance. The impact brought by the diversification strategy is manifold. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on the performance of game companies[6].

(1) Change in Operation Model

At present, the main operation scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also an advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but also solely undertakes the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years of development, it has kept innovating alongside technological advances, expanding the market to include film and anime subcultures, and also shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain in areas such as music, VR technology, and various live broadcasts and other pan-entertainment businesses.

Sanqi Mutual Entertainment Game Company was established in 1995, but its initial development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and at the beginning, its industry chain did not involve the operation of games or other entertainment industries, always at risk of being swallowed by the market. However, through the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. Yet, with poor later operations and market contraction, Sanqi Mutual Entertainment still did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with sixty percent equity. Although nominally acquired, it was a development opportunity worth grasping for Sanqi Mutual Entertainment. Under the multifaceted collaboration of the two companies, various industry asset restructurings were completed. Notably, the strategies always operated by Sanqi Mutual Entertainment had already begun to show promise at this time. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creative company before the acquisition to what is now a dual main business listed company of advanced production manufacturing and modern cultural creativity, with corresponding changes in the company's operation strategies, and the business scope covered by the original cultural creative industry.