This Lord is Very Scientific-Chapter 763 - 695

(Anti-theft, to be released later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years has been evident to the public. The method of spreading games is no longer confined to rigid promotional models, and the influence of games has gradually expanded to various aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate and iterate, and improve performance in line with the rapid development of the times. A diversification strategy precisely meets the planning needs and development goals within the game industry. In the context of economic globalization, a diversification strategy as the preferred model for enterprise development is also applicable to game companies. This article explains the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Company as an example. 𝕗𝕣𝐞𝐞𝘄𝐞𝚋𝚗𝗼𝘃𝗲𝗹.𝚌𝕠𝚖

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

Diversification strategy is a market strategic tool adopted by enterprises during operations to capture more new markets and explore new markets. It is also a strategic plan that enterprises need to avoid risks encountered while operating a single business and to enter new business fields purposefully and preparedly. Applying diversification strategy practically to game companies can effectively improve company performance, bringing a process of change from quantity to quality in the development of game companies.

1. The Macro Background of Diversification Strategy

Entering 2021, under the effective control of the state over the pandemic, people’s lives are getting back on track, and the economy and culture are showing a good recovery trend. On April 30, 2021, according to related data released by the National Bureau of Statistics, the development of the national cultural industry has basically recovered to the pre-pandemic level [1]. This is very favorable news for the game industry, which holds a significant proportion of the cultural industry. Although the pandemic did not greatly impact the game industry, the inability to conduct offline activities has always affected the performance of game companies. The warming cultural industry means that for most game companies, the big development and prosperity of the cultural industry can promote and drive more game companies onto the path of sustainable development [2].

From the outbreak of the pandemic last year to the current stabilization of the pandemic, the state has issued relevant policies to support the development of the cultural industry from multiple aspects such as finance, system, and finance. Although the pandemic has blocked people’s travel, it cannot control the speed of online network transmission. The emergence of more and more new media has driven the development of the cultural industry during the pandemic prevention period. However, due to many companies wanting to squeeze into the online market, the competition environment in the cultural industry is extremely fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. However, in these short two years, many successfully transformed cultural industries have emerged, most of which have accelerated transformation and upgrading relying on the diversified strategic model, and during the period of significant improvement in residents’ consumption levels during pandemic prevention, they have also reaped considerable rewards, gaining more diversified development models and revenue channels. For example, the transformation made by Sanqi Mutual Entertainment during pandemic prevention is worth learning for most game companies [3].

2. Brief Analysis and Classification of Diversification Strategy

(1) Brief Analysis of Diversification Strategy

Diversification strategy was proposed by Igor Ansoff, the pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This worldwide influential strategic model is involved in the management policies of multiple countries, so today every enterprise, large or small, is seeking a foothold according to the development model of diversification strategy [4].

(2) Classification and Implications of Diversification Strategy

Diversification strategy is divided into four types: Horizontal Diversification, Vertical Integration, Concentric Diversification, and Conglomerate Diversification. The four different models derived from diversification strategy have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new user needs, thereby driving market consumption; vertical integration refers to enterprises based on their development status, vertically deriving and using the product industry chain to penetrate other market fields to seek new consumer targets; concentric diversification focuses more on innovation of existing technologies, requiring the production of new products within the original production scope, with the whole process achieved through the transformation of existing technologies; conglomerate diversification focuses more on expanding factors such as expansion and market to expand the business scope [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 game company performance is uniformly divided into two parts: operational model change and strategic planning transfer. The effects gradually arise from these two parts, driving the company’s performance improvement. The impact brought by diversification strategy is multifaceted. This paper will analyze the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as an example [6].

(1) Changes in the Operational Model

Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive, which also relies on the advantages brought by diversification strategy. The company’s business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company has also wholly undertaken the research and publication of mobile games and web games. In recent development, keeping up with the times and technology, they continue to innovate, expanding the market layout to film and animation, and also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live broadcasts and other pan-entertainment businesses.

In 1995, Sanqi Mutual Entertainment Game Company was established, but the initial development road was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries, always facing the risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011, but accompanied by poor operation and market shrinkage in later stages, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity. Although nominally acquired, for Sanqi Mutual Entertainment, this was an opportunity worth seizing. Through mutual cooperation, the two companies completed the asset restructuring of various industries. It is worth mentioning that the strategic exploration that Sanqi Mutual Entertainment has been operating has already shown its sharpness at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired to a dual-main business listed company of advanced manufacturing and modern cultural creativity operating in parallel. Correspondingly, Sanqi Mutual Entertainment’s company operating strategy also changed, with the business scope covered by the original cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. first covered the business scope of cultural creative industries.