This Lord is Very Scientific-Chapter 811 - 743

(Anti-theft, to be published at that time.) Abstract: Accompanied by technological advancements and the coverage models of intelligent networks, the rise of the game industry in recent years is evident to the public. The spread of games is no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies must continue to integrate resources, innovate, and upgrade to enhance performance with the rapid development of the times. Diversification strategy perfectly meets the planning needs and development goals within the game industry. In the context of economic globalization, diversification strategy, as the preferred mode of enterprise development, is equally applicable to game companies. This paper takes 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 strategy employed by enterprises during operations to occupy and explore new markets more effectively, as well as to mitigate risks encountered during the operation of a single business. It involves targeted and prepared strategic planning to enter new business areas. The practical application of diversification strategy in game companies can effectively enhance company performance and bring about a qualitative change from quantitative change in the development of game companies.

1. Macro Background of Diversification Strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economic and cultural activities demonstrate a great trend of recovery. On April 30, 2021, according to relevant data published by the National Bureau of Statistics, the development of the nationwide cultural industry has basically returned to the pre-pandemic level[1]. This is very favorable news for the game industry, which takes up a large proportion of the cultural industry. Although the pandemic has not caused significant impacts on the game industry, the inability to conduct offline activities has always affected game companies' performance. The warming of the cultural industry indicates significant development and prosperity for many game companies, which can promote more game companies towards sustainable development[2].

From last year's outbreak of the pandemic to the current pandemic stability, the nation has implemented relevant policies from various aspects such as finance, institutions, and finance to support the development of the cultural industry. The pandemic may have hindered people from traveling, but it could not control the speed of online network transmission. More and more new media emerged, driving the development of the cultural industry during the pandemic control period. However, as each enterprise attempts to enter the online market, the competition environment within the cultural industry has become exceptionally fierce. Many traditional offline enterprises could not withstand the pandemic's impact and were eliminated by society. However, in these short two years, many successful cultural industry transformations have emerged, and these enterprises mainly relied on the diversification strategy model to accelerate transformation and upgrade. During the pandemic control period, when the residents' consumption level significantly improved, they also harvested abundantly, obtaining more diverse development models and revenue channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic control period is worthy of reference by most game companies[3].

2. Brief Analysis and Classification of Diversification Strategy

(1) Brief Analysis of Diversification Strategy

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

(2) Classification and Meaning of Diversification Strategy 𝘧𝓇𝑒𝑒𝑤ℯ𝑏𝓃𝘰𝑣ℯ𝘭.𝘤ℴ𝘮

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of the four different models derived from the diversification strategy vary. Horizontal diversification refers to the production of new products by enterprises using the original conditions provided by the market to meet new user needs, thereby driving market consumption; vertical integration refers to enterprises vertically deriving based on their development situation, utilizing the product industry chain to penetrate into other market fields to seek new consumers; concentric diversification emphasizes the innovation of existing technology, requiring the production of new products within the original production range, and realizing the whole process through the transformation of existing technology; conglomerate diversification emphasizes expanding the change in operating range, requiring enterprises to contact factors such as raw materials, technology, and market related to their products to expand the operating range[5].

3. Impact of Diversification Strategy on Game Company Performance

It can be said that in the operation process of all game companies, the impact of diversification strategy on game company performance is divided into two parts: the change of the operation model and the transfer of strategic planning. The gradual impact from these two parts promotes the improvement of company performance. The impact brought by diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as an example[6].

(1) Change in Operation Model

Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is extensive, relying on the advantages brought by diversification strategy. The company's business not only involves interactive entertainment operation, but also handles the research and distribution of mobile games and web games comprehensively. With its development in recent years, the company continues to innovate closely following technological advances, expanding the market layout to film, animation, ACG (anime, comics, and games) fields, as well as shaping its market cultural industry chain in music, VR technology, and various live broadcast entertainment businesses.

Sanqi Mutual Entertainment Game Company was founded in 1995, but its early development path was not smooth. The company originated as a small enterprise, and initially, its industry chain did not involve the operation of games and other entertainment industries, constantly facing the risk of being swallowed by the market. However, with steady development in a single industry, Sanqi Mutual Entertainment Company got listed in 2011. Nevertheless, accompanying poor later operations and market contraction, Sanqi Mutual Entertainment eventually did not escape the fate of acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares in Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. Under multi-faceted collaboration, the two companies completed asset restructuring in various industries. It is worth mentioning that the exploration strategy always operated by Sanqi Mutual Entertainment started to reveal its edge at this time. From a single modern cultural creative company before being acquired, Sanqi Mutual Entertainment Company transformed into a dual-mainline listed company combining advanced production manufacturing and modern cultural creativity. Correspondingly, the company's operation strategy changed, and the business scope covered by the cultural creative industry of Sanqi Mutual Entertainment also underwent changes in 2014 by Wuhu Shunrong Auto Parts Co., Ltd.