This Lord is Very Scientific-Chapter 764 - 696

(Anti-theft, will be released in due time.) Abstract: With 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 dissemination method of games is no longer confined to rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, gaming companies also need to continuously integrate resources, innovate and iterate, and improve performance as the times develop rapidly. A diversification strategy happens to meet the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, a diversification strategy, as the preferred mode of enterprise development, also applies to gaming companies. This paper explains the impact of diversification strategies on gaming company performance by taking Sanqi Mutual Entertainment Company as an example.

Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company

Diversification strategy is a market strategic means adopted by enterprises in the operation process to occupy more new markets and explore new markets. It is also a strategic plan used by enterprises to avoid risks encountered in operating a single business and to enter new business fields with targets and preparation. Applying a diversification strategy to gaming companies can effectively improve company performance, bringing about a qualitative transformation from quantitative changes in the company’s development.

1. Macro Background of Diversification Strategy

Entering 2021, under the strong control of the pandemic by the state, people’s lives are back on track, and the economic culture also presents a prosperous 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 the pre-pandemic level [1]. This is extremely beneficial news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the pandemic has not caused significant impacts on the gaming industry, the inability to conduct offline activities has always affected the performance of gaming companies. With the warming of the cultural industry, for most gaming companies, this means that the great development and prosperity of the cultural industry can promote and drive more gaming companies to embark on the path of sustainable development [2].

From the outbreak of the pandemic last year to the current stabilization, the country has introduced relevant policies from multiple aspects like finance, systems, and finance to support the development of the cultural industry. Although the pandemic has hindered people’s travel, it cannot control the spread speed of the online network. More and more new media appear, driving the development of the cultural industry during the pandemic prevention period. However, due to various companies vying to enter the online market, the competition environment within the cultural industry is extremely fierce. Many traditional offline enterprises cannot withstand the impact of the pandemic and are eliminated by society at this time. But in these short two years, many successfully transformed cultural industries have emerged. Most of these companies rely on the diversification strategy model to accelerate transformation and upgrading, and they have also harvested significant results during the pandemic prevention period when residents’ consumption levels have increased significantly, gaining more diversified development models and income sources. For example, the transformation undertaken by Sanqi Mutual Entertainment during the pandemic prevention period is worth learning from for most gaming 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," where he mentioned the classification of diversification strategies. This globally influential strategic model is included in the management policies of many countries, resulting in every large and small enterprise seeking a place according to the developmental model of the diversification strategy today [4].

(2) Classification and Meaning of Diversification Strategy

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes 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 meet new user needs, thereby driving market consumption. Vertical integration is when enterprises derive vertically based on their development situation, using the product industry chain to penetrate other market areas to seek new consumer objects. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the original production range, achieving the whole process through the transformation of existing technology. Conglomerate diversification emphasizes expanding the scope of operations, where enterprises need to link raw materials, technology, markets, and other factors related to their products to expand the scope of operations [5].

3. Impact of Diversification Strategy on Gaming Company Performance

It can be said that in the operation process of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: the change in operation mode and the shift in strategic planning. The effect gradually arises from these two parts of the transformation, driving the improvement of company performance. The impact of diversification strategy is multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on gaming company performance [6].

(1) Change in Operation Mode

At present, the main operation range of Sanqi Mutual Entertainment Game Company is very wide, which relies on the advantages brought by the diversification strategy. The company’s business not only involves the operation of interactive entertainment but also covers the research and publication of mobile games and web games. In recent years, keeping up with the times and technological advancements, it has continuously innovated and extended the market to include film, anime, music, VR technology, and various live broadcasting content, shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company.

Sanqi Mutual Entertainment Game Company was established in 1995, but the development path was not smooth in the early stages. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, its industry chain 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 with the later failure of operation and market contraction, Sanqi Mutual Entertainment still did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity in Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was acquired in name, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed the asset restructuring of various industries through multi-party cooperation. It is worth mentioning that the exhibition strategy that Sanqi Mutual Entertainment has been operating had already begun to show its edge at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired to the current dual-main business listed company, where advanced production manufacturing and modern cultural creativity go hand in hand. Correspondingly, the company’s operation strategy of Sanqi Mutual Entertainment also underwent changes, and the business scope covered by the original cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. first covered the business scope of the cultural creative industry.