This Lord is Very Scientific-Chapter 810 - 742

(Anti-theft, to be issued on time.) Abstract: Accompanying technological progress and the coverage model of intelligent networks, the rise of the gaming industry in recent years has been evident to the public. The dissemination of games is no longer confined to rigid promotional modes, and the influence of games is gradually expanding to all aspects of life. Correspondingly, gaming companies also need to constantly integrate resources, innovate iterations, and improve performance as times rapidly develop. A diversification strategy aptly addresses the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred model for enterprise development, is equally applicable to gaming companies. This article uses the Sanqi Mutual Entertainment Company as an example to explain the impact of a diversification strategy on a gaming company's performance.

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

A diversification strategy is a market strategy measure adopted by enterprises in the operation process to occupy and develop new markets more extensively, as well as to avoid risks encountered in operating a single business. It involves strategically and purposefully entering new business fields. Applying a diversification strategy to a gaming company can effectively enhance performance and bring about a transformation from quantitative change to qualitative change in a company's development.

1. The Macroeconomic Background of the Diversification Strategy

In 2021, under the state's effective control of the pandemic, people's lives returned to normal, and the economic culture is also showing a promising revival. On April 30, 2021, according to data published by the National Bureau of Statistics, the development of the national cultural industry basically recovered to pre-pandemic levels [1]. This is very favorable news for the gaming industry, which holds a significant share of the cultural industry. Although the arrival of the pandemic did not significantly impact the gaming industry, the inability to conduct offline activities continued to affect gaming companies' performance. With the revival of the cultural industry, for most gaming companies, this means that the great development and prosperity of the cultural industry can drive more gaming companies to embark on the path of sustainable development [2].

From last year's outbreak to the current stabilization of the pandemic, the country has introduced relevant policies in fiscal, institutional, and financial areas to support the development of the cultural industry. Although the pandemic has hindered people's movements, it has been unable to control the speed of online network dissemination. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention period. However, since each enterprise wants to squeeze into the online market, the competitive environment within the cultural industry has become very fierce. Many traditional offline enterprises were unable to withstand the pandemic's impact, leading to their elimination from society. However, in these short two years, many successful cultural industry transformations have also emerged, and most of these enterprises rely on the diversification strategy model to accelerate transformation and upgrading. They have reaped substantial benefits, gaining more diversified development models and income channels during the pandemic prevention period when residents' consumption levels significantly increased. For instance, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth emulating by most gaming companies [3].

2. Analysis and Classification of the Diversification Strategy

(A) Analysis of the Diversification Strategy

The diversification strategy was proposed by Igor Ansoff, the pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This strategic model, influential worldwide, is involved in the management guidelines and policies of multiple countries, so today, businesses of all sizes seek a foothold based on the diversification strategy development model [4].

(B) Classification and Meaning of Diversification Strategies

There are four types of diversification strategies: Horizontal Diversification, Vertical Integration, Concentric Diversification, and Conglomerate Diversification. The meanings of the four different models derived from the diversification strategy also differ. Horizontal diversification refers to enterprises producing new products that meet new user needs utilizing original market conditions, thereby driving market consumption. Vertical integration means enterprises extend vertically based on their development status, using product supply chains to penetrate other market fields to seek new consumer targets. Concentric diversification focuses more on the innovation of existing technology and requires the production of new products within the existing production scope, realizing transformation through the evolution of the original technology. Conglomerate diversification pays more attention to expanding the range of operations, requiring enterprises to link with related raw materials, technology, market factors, etc., to expand the range of operations [5].

3. The Impact of the Diversification Strategy on Gaming Company Performance

It can be said that in the operation processes of all gaming companies, the impact of the diversification strategy on gaming company performance is uniformly divided into two parts: changes in operational models and shifts in strategic planning. From the changes in these two parts, effects gradually arise, leading to improvements in company performance. The impact brought by the diversification strategy is multifaceted. This paper will take the Sanqi Mutual Entertainment Game Company as a case study to analyze the impact of the diversification strategy on gaming company performance [6].

(1) Changes in Operational Models

Currently, the primary operational scope of the Sanqi Mutual Entertainment Game Company is quite extensive, which is also the advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but the Sanqi Mutual Entertainment Game Company also undertakes the research and distribution of mobile games and web games. In recent developments, the company continuously innovates by keeping up with contemporary technology, broadening the market layout to encompass film, comics, and the two-dimensional space, and it also shapes the cultural industry chain belonging to the Sanqi Mutual Entertainment Game Company within various pan-entertainment businesses such as music, VR technology, and live broadcasts.

Sanqi Mutual Entertainment Game Company was founded in 1995, but its early development was not smooth. Originally, the precursor of Sanqi Mutual Entertainment Game Company was a small enterprise, and its initial industry chain did not involve the operation of gaming and other entertainment industries, with the ever-present risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. With subsequent poor management and market contraction, it ultimately couldn't evade the fate of acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired a 60% stake in Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. Through multi-faceted collaboration between the two companies, various industrial asset reorganizations were completed. Notably, the strategy that Sanqi Mutual Entertainment has been operating began to show its brilliance at this time. The company transformed from a single modern cultural and creative company before being acquired to the current dual-main business listed company integrating advanced manufacturing and modern cultural creativity. Correspondingly, the company operational strategies of Sanqi Mutual Entertainment were also undergoing changes, with the business scope previously covered by the cultural and creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. initially covered the business scope by the cultural and creative industry.