This Lord is Very Scientific-Chapter 775 - 707

(To be released with anti-theft protection at that time.) Abstract: With the advancement of technology and the coverage of intelligent networks, the rise of the game industry in recent years is evident to the public. The dissemination of games is no longer confined to rigid promotional modes, and their influence has gradually extended to various aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and iterate to improve performance in line with the rapid development of the era. The diversification strategy precisely caters to the planning needs and development goals within the game industry. Against the backdrop of economic globalization, diversification strategy, as the preferred model for enterprise development, is equally applicable to game companies. This paper uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of game companies.

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

Diversification strategy is a market strategic approach enterprises adopt during operation to capture new markets and expand existing ones. It also helps enterprises avoid risks encountered during the operation of a single business by strategically planning and preparing to enter new business fields. Applying diversification strategy to game companies can effectively enhance company performance, fostering a transformation from quantitative to qualitative development for the company.

1. Macroscopic Background of Diversification Strategy

Entering 2021, with the nation's effective control over the pandemic, people's lives have returned to normal, and there is a promising recovery in economic and cultural aspects. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the national cultural industry has generally returned to pre-pandemic levels [1], which is highly favorable for the game industry that holds a significant share in the cultural industry. Although the pandemic didn't significantly impact the game industry, the inability to conduct offline activities continually affected the performance of game companies. The recovery of the cultural industry heralds great expansion and prosperity that can promote more game companies to embark on a path of sustained development [2].

From the outbreak of the pandemic last year to the current stabilization of the situation, the nation has implemented relevant policies to support the development of culture industry from aspects of finance, regulation, and finance. While the pandemic hindered people's travel, it couldn't control the speed of online network dissemination. More new media emerged, driving cultural industry development during the pandemic prevention period. However, as various enterprises strive to penetrate the online market, competition within the culture industry becomes intensely fierce. Numerous traditional offline enterprises succumbed to the pandemic impact and were eliminated by society. However, within this short span of two years, many cultural industries have successfully transitioned, primarily relying on diversification strategy models to accelerate transformation and upgrade during pandemic prevention periods characterized by significant increases in resident consumption levels. A successful example to be emulated by most game companies is Sanqi Mutual Entertainment's transformation during the pandemic prevention period [3].

2. Brief Analysis and Classification of Diversification Strategy

(a) Brief Analysis of Diversification Strategy

Diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentions classifications of diversification strategy. This globally influential strategic model is reflected in management policies of several countries, so much so that every enterprise today, big or small, strives to find a place within the development model of diversification strategy [4].

(b) Classification and Meaning of Diversification Strategy

The diversification strategy is categorized into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The meanings of the four different models derived from the diversification strategy also differ. Horizontal diversification refers to enterprises utilizing the original conditions provided by the market to produce new products that fulfill users' new demands, thereby driving market consumption. Vertical integration means enterprises longitudinally derive based on their development circumstances, leveraging the product industry chain to penetrate other market fields to seek new consumer groups. Concentric diversification focuses more on innovation in existing technology, requiring new product production within the existing production scope, achieving transformation through the metamorphosis of existing technology. Overall diversification concentrates more on expanding operational scope variations, where enterprises need to relate factors such as raw materials, technology, and market associated with their products to expand operational scope [5].

3. Impact of Diversification Strategy on Game Company Performance

It can be said that during the operation of all game companies, the impact of diversification strategy on game company performance can be divided into two parts: changes in operational modes and shifts in strategic planning. The effects gradually produced from these two changes drive the performance enhancement of companies. The impacts brought by diversification strategy are multifaceted, and this paper will use 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) Changes in Operational Modes

Currently, the primary operation scope of Sanqi Mutual Entertainment Game Company is extensive, which is precisely the advantage brought by the diversification strategy. The company not only involves operations in interactive entertainment but also fully undertakes research and distribution of mobile games and web games. Moreover, following the technological trends of recent years, the company continuously innovates by expanding its market into areas such as film and animation, second dimension, and also molds the market cultural industry chain of Sanqi Mutual Entertainment Game Company in fields such as music, VR technology, and various types of live entertainment business.

Founded in 1995, Sanqi Mutual Entertainment Game Company's development road was not smooth initially. The predecessor company of Sanqi Mutual Entertainment was a small enterprise. Initially, the industry chain of Sanqi Mutual Entertainment did not involve operations in games or entertainment industries, always risking being swallowed by the market. However, relying on steady development in the single industry, Sanqi Mutual Entertainment Company listed in 2011. Still, due to poor management and market contraction in later operations, Sanqi Mutual Entertainment did not ultimately escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity. Despite being nominally acquired, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed asset restructuring of various industries through multi-faceted collaboration. Notably, the strategy operated by Sanqi Mutual Entertainment had already begun to show promise at this time. Sanqi Mutual Entertainment Company transitioned from a single modern cultural and creative company before acquisition to a dual-main business listed company with parallel advanced production manufacturing and modern cultural creativity. Accordingly, Sanqi Mutual Entertainment's company operational strategy also underwent changes, corresponding to the business scope covered by the cultural creative industry. In 2014, the business scope covered by Wuhu Shunrong Auto Parts Co., Ltd.'s cultural creative industry.