This Lord is Very Scientific-Chapter 818 - 750

(Anti-theft, to be released in due time.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years is evident to the public. The way games are disseminated is no longer limited to rigid advertising models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and improve performance in line with the rapid development of the times. A diversification strategy aptly meets the planning needs and development goals within the game industry. Against the backdrop of economic globalization, the diversification strategy, as a preferred mode of enterprise development, is also applicable to game companies. This paper uses the example of Sanqi Mutual Entertainment Company 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 tool adopted by companies in the process of operation to occupy and explore new markets. It is also a strategic plan for companies to avoid risks encountered in operating a single business by entering new business areas with purpose and preparation. Applying a diversification strategy in a game company can effectively enhance company performance, bringing about a process of transformation from quantitative changes to qualitative changes in the company's development.

1. The Macro Background of Diversification Strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives are getting back on track, and there is a great trend of recovery in the economy and culture. 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 pre-pandemic levels [1]. This is very favorable news for the game industry, which holds a significant proportion in the cultural industry. Although the pandemic did not have a significant impact on the game industry, the inability to conduct offline activities always affected the performance of game companies. With the recovery of the cultural industry, this means for most game companies that the great development and prosperity of the cultural industry can promote and facilitate more game companies to embark on the road of sustainable development [2].

From last year's outbreak of the pandemic to the current stabilization, the state has promulgated relevant policies from multiple aspects such as finance, system, and finance to support the development of the cultural industry. Although the pandemic obstructed people's travel, it could not control the propagation speed of the online network. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention and control period. However, since each enterprise wants to squeeze into the online market, the competitive environment in the cultural industry is very fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. Still, in these short two years, many successfully transformed cultural industries have emerged. These companies mostly relied on a diversification strategy model to accelerate transformation and upgrading. During the pandemic prevention and control period, when the level of resident consumption increased significantly, they also gained richly, obtaining more diversified development models and channels for financial income. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period is worth learning from for most game companies [3].

2. Brief Analysis and Classification of 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 strategy. This world-influencing strategic model has been involved in management guideline policies of several countries, leading to every enterprise, large or small, seeking a place according to the development model of diversification strategy today [4].

(ii) Classification of Diversification Strategy and Its Meaning

There are four types of diversification strategies in total: 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 can meet new user demands, thereby driving market consumption. Vertical integration is for enterprises to extend vertically according to their development situation and penetrate other market fields with the product industry chain to seek new consumers. Concentric diversification focuses more on innovation of the original technology, requiring production of new products within the original production range, achieving the entire process through the metamorphosis of the original technology. Conglomerate diversification, however, pays more attention to the expansion of business scope changes. Enterprises need to connect factors such as raw materials, technology, and markets related to their products for the expansion of their business scope [5].

3. The Impact of Diversification Strategy on Game Company Performance

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

(1) Change of Operating Model

Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is quite extensive. This is also the advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also fully undertakes the research, development, and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years, along with development, the company continuously innovates following the era's technology, expanding the market to layout in film, television, and anime ACG. It also shapes its market cultural industry chain in music, VR technology, and various live entertainment businesses. 𝐟𝕣𝗲𝕖𝕨𝗲𝐛𝗻𝗼𝐯𝗲𝚕.𝗰𝚘𝐦

Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries, always at 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. Accompanied by poor operations and market contraction in the later stages, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with 60% of the equity. Although nominally acquired, it was a development opportunity for Sanqi Mutual Entertainment worth seizing. Through multi-party collaboration, the two companies completed various industrial asset restructurings. It's worth mentioning that the strategic direction always operated by Sanqi Mutual Entertainment began to show emerging trends at this time. Sanqi Mutual Entertainment Company transformed from a pre-acquisition single modern cultural and creative company into what is today a dual major-listed company integrating advanced manufacturing and modern cultural creativity. Corresponding to that, Sanqi Mutual Entertainment's company operation strategy also underwent changes. The business scope initially covered by the cultural and creative industry. In 2014, the business scope covered by Wuhu Shunrong Auto Parts Co., Ltd.'s prior cultural and creative industry.