This Lord is Very Scientific-Chapter 819 - 751

(Anti-theft, will be released later.) Abstract: With the advancement of technology and the coverage of the intelligent network model, the rise of the gaming industry in recent years has moved the populace beyond stereotypical promotional modes. The influence of games has gradually expanded to all aspects of life, and correspondingly, game companies also need to continuously integrate resources, innovate, update, and improve performance amidst the rapid development of the times. The diversification strategy precisely fits the planning needs and development goals within the gaming industry. Under the backdrop of economic globalization, the diversification strategy as a preferred mode of enterprise development is equally applicable to game companies. This article 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 companies; Performance; Impact; Sanqi Mutual Entertainment Company

Diversification strategy is a market strategy tool employed by enterprises during their operation to capture more new markets and expand existing ones. It also serves as a strategic plan for enterprises to avoid risks encountered during the operation of single businesses and to strategically and preparedly enter new business fields. Applying the diversification strategy to game companies can effectively enhance company performance, bringing about a transformation from quantitative change to qualitative change for the company's development.

1. The Macroeconomic Background of Diversification Strategy

Entering 2021, with the nation's effective control over the pandemic, people's lives returned to normal, and both economy and culture showed a promising recovery trend. On April 30, 2021, data published by the National Bureau of Statistics indicated that the development of the national cultural industry had basically recovered to pre-pandemic levels [1]. This is very favorable news for the gaming industry, which holds a significant proportion in the cultural industry. Although the pandemic did not greatly impact the gaming industry, the inability to conduct offline activities inevitably affected the performance of game companies. Through the revival of the cultural industry, for most game companies, this means the major development and prosperity of the cultural industry can promote and drive more game companies onto a path of sustainable development [2].

From last year's outbreak of the pandemic to now when the pandemic has stabilized, the state has enacted relevant policies from fiscal, institutional, financial, and other aspects to support the development of the cultural industry. Although the pandemic has restrained people's travel, it cannot 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, as every enterprise wants to squeeze into the online market, the competitive environment within the cultural industry has become extremely fierce. Many traditional offline enterprises have been eliminated by society during this time due to inability to withstand the pandemic's impact. However, in these short two years, numerous cultural industries that successfully transitioned have emerged. Most of these enterprises accelerated transformation and upgrades relying on the diversification strategy mode, and they also prospered similarly during the pandemic prevention period when the residents' consumption levels significantly increased, gaining more diverse development models and funding sources, like the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention period, deserves reference by most game companies [3].

2. Analysis and Classification of Diversification Strategy

(a) Brief Analysis of Diversification Strategy

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

(b) Classification and Meaning of Diversification Strategy

There are four types of diversification strategy: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four modes derived from diversification strategy each have distinct meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user needs, thus driving market consumption. Vertical integration involves enterprises vertically deriving according to their own development situation, using the product supply chain to penetrate other market fields to seek new consumer objects. Concentric diversification focuses more on the innovation of existing technology, requiring new product production within the original production range, achieving the entire process through the transformation of existing technology. Overall diversification emphasizes expanding the range of operations, where enterprises need to connect with raw materials, technologies, and market factors related to their products to expand operational scope [5].

3. The Impact of Diversification Strategy on Game Company Performance

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

(1) Change of Operation Mode

Currently, the main operational range of Sanqi Mutual Entertainment Game Company is very extensive, which is also an advantage brought by the diversification strategy. The company's business involves not only the operation of interactive entertainment but also takes full charge of the development and release of mobile games and web games under Sanqi Mutual Entertainment Game Company. Moreover, in recent developments, it has innovated continuously in line with the scientific progress of the era, expanding the market to cover film and anime subcultures, and also crafting a market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in various pan-entertainment businesses such as music, VR technology, and various live broadcasts.

Sanqi Mutual Entertainment Game Company was founded in 1995, but the development path in the early stages was not smooth sailing. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, initially not involving game and other entertainment industry operations in its industry chain, having a constant risk of being annexed by the market. Yet, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011, but with later poor management and market constraint, Sanqi Mutual Entertainment eventually did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, it was an opportunity worth seizing for Sanqi Mutual Entertainment. Under the multi-party collaboration, the two companies completed the asset restructuring of various industries. It is worth mentioning that the exhibition strategy always operated by Sanqi Mutual Entertainment began to show promise at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before acquisition to a dual-main business listed company with advanced production manufacturing and modern cultural creativity paralleled at present. Correspondingly, Sanqi Mutual Entertainment's company operation strategy was also undergoing changes, the scope of business covered by the original cultural creative industry.