This Lord is Very Scientific-Chapter 823 - 755

(To prevent theft, it will be sent later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years has been evident to the public. Game dissemination methods are no longer confined to rigid promotional models, and the influence of games has gradually expanded into all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, and iterate to improve performance in line with the rapid development of the era. A diversification strategy perfectly aligns with 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 also applicable to game companies. This article elucidates the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Company as an example.

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

Diversification strategy is a market strategic tool employed by enterprises during operation to capture and explore new markets. It also helps enterprises to avoid risks encountered in operating a single business, and strategically enter new business fields with targeted preparation. Applying diversification strategy to game companies can effectively enhance company performance, bringing an evolutionary change from quantitative to qualitative development for the growth of game companies.

1. Macro Background of Diversification Strategy

Entering 2021, with the country's effective control over the pandemic, people's lives returned to normal, and economic and cultural sectors exhibited a promising recovery trend. On April 30, 2021, data published by the National Bureau of Statistics indicated that the development of the cultural industry nationwide had fundamentally returned to pre-pandemic levels [1]. This is extremely favorable news for the game industry, which constitutes a significant portion of the cultural industry. Although the pandemic's arrival did not greatly affect the game industry, the inability to conduct offline activities has always impacted the performance of game companies. The recovery of the cultural industry means that many game companies will be driven towards continuous development amidst the large-scale growth and prosperity of the cultural industry. [2]

From the outbreak of last year's pandemic to the current stabilization, the country has issued relevant policies across various aspects such as finance, regulations, and investments, supporting the development of the cultural industry. Although the pandemic hindered people's outings, it could not control the speed of online network dissemination. The emergence of new media fostered the development of the cultural industry during the pandemic prevention and control period. However, as various enterprises tried to enter the online market, the competitive environment within the cultural industry became extremely intense. Several traditional offline enterprises could not withstand the pandemic's impact and were eliminated by society. Yet, within these short two years, numerous cultural industries successfully transformed. Most of these enterprises relied on the diversification strategy model to accelerate transformation and upgrade, yielding substantial benefits amidst the significant increase in household consumption levels during pandemic prevention and control, achieving more diverse development models and revenue channels. For instance, the transformation Sanqi Mutual Entertainment underwent during the pandemic control period is something most game companies should consider [3].

2. Brief Analysis and Classification of Diversification Strategy

(a) Brief Analysis of Diversification Strategy

Igor Ansoff, the father of strategic management, proposed the diversification strategy. In his book "Corporate Strategy," he discussed the classification of diversification strategies. This world-influencing strategic model is involved in various countries' management policies, allowing every enterprise big or small to strive for a place following the development model of diversification strategies [4].

(b) Classification and Meaning of Diversification Strategy

Horizontal diversification refers to enterprises using the initial conditions provided by the market to produce new products that meet users' new demands to drive market consumption. Vertical integration involves enterprises deriving vertically based on their development status, using the product industry chain to penetrate other market fields to find new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the original production scope, realizing the entire process through the transformation of existing technology. General diversification emphasizes changes in expanding the scope of business. Enterprises need to expand their business range by connecting factors related to their products, raw materials, technology, and markets [5].

3. Impact of Diversification Strategy on Game Company Performance

In the operation process of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in the operation model and shifts in strategic planning. Effects gradually arise from these two parts, enhancing company performance. The impact brought by the diversification strategy is multifaceted. This paper uses 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 Operation Model

Currently, the primary operation scope of Sanqi Mutual Entertainment Game Company is extensive, which is also the advantage brought by diversification strategy. The company's business not only involves the operation of interactive entertainment but also fully covers the development and distribution of mobile games and web games. Recent developments include continuous innovation to catch up with era technology and expanding the market to include film and anime secondary characters. It also creates a market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various streaming entertainment businesses.

Established in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth development path in the early stages. The precursor of Sanqi Mutual Entertainment Game Company was a small enterprise that initially did not involve the operation of games and other entertainment industries in its industry chain, constantly 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. But, accompanying subsequent poor operation and market contraction, Sanqi Mutual Entertainment ultimately could not escape the fate of acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity. Although it was acquired in name, for Sanqi Mutual Entertainment, this is an opportunity worth seizing for development. The two companies completed asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the strategy Sanqi Mutual Entertainment has been operating unfolded at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition into a dual-core listed company running advanced production and modern cultural creativity in parallel. Correspondingly, the company's operation strategy of Sanqi Mutual Entertainment also changed—the business scope previously covered by the cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. was initially defined by the cultural creative industry scope.