This Lord is Very Scientific-Chapter 825 - 757

(Anti-theft, to be posted later.) Abstract: With the advancement of technology and the coverage of intelligent networks, the rise of the game industry in recent years is evident to the public. The dissemination methods of games are no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, and update to improve performance in line with the rapid development of the times. The diversification strategy precisely caters to the planning needs and development goals within the game industry. In the context of economic globalization, diversification strategy, as the preferred model for enterprise development, is equally applicable to game companies. This article explains the impact of diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Company as an example.

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

Diversification strategy is a market strategy adopted by enterprises during operations to capture more new markets and expand existing ones. It is also a strategic plan that enterprises use to avoid risks encountered during the operation of a single business by entering new business fields with targeted preparation. Applying a diversification strategy to game companies can effectively enhance company performance and bring about a transformation from quantitative to qualitative change in the development of the companies.

1. Macro Background of Diversification Strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives are back on track, and the economic and cultural sectors are showing a promising recovery. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to pre-pandemic levels[1], which is very favorable news for the game industry, which occupies a significant portion of the cultural industry. Although the pandemic did not greatly impact the game industry, the inability to conduct offline activities has always affected the performance of game companies. The recovery of the cultural industry suggests that for most game companies, the large-scale development and prosperity of the cultural industry can drive more game companies towards a path of sustainable development[2].

From the outbreak of the pandemic last year to the current stabilization, the country has issued relevant policies to support the development of the cultural industry from multiple aspects such as finance, institutions, and finance. Although the pandemic halted people's movements, it could not control the speed of online network dissemination. The emergence of more and more new media has driven the development of the cultural industry during the pandemic prevention period. However, since each company wants to squeeze into the online market, the competitive environment within the cultural industry has become very fierce. Many traditional offline businesses could not withstand the impact of the pandemic and were eliminated by society, but in these short two years, many successfully transformed cultural industries have emerged. These enterprises mostly rely on the diversification strategy model to accelerate transformation and upgrading and have also reaped significant benefits from the increase in residents' consumption levels during the pandemic prevention period, obtaining diversified development models and income channels. Sanqi Mutual Entertainment Company's transformation during the pandemic prevention period is worthy of emulation 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 father of strategic management, Igor Ansoff, in his book "Corporate Strategy." He mentioned the classification of diversification strategy in this influential strategic model, which is involved in the management guidelines and policies of many countries, leading every enterprise, big and small, to seek a place according to the development model of diversification strategy[4].

The praise of intimate synergies refers to enterprises using the original conditions provided by the market to produce new products that can meet new consumer demands, thereby driving market consumption. Vertical integration is when enterprises, based on their development status, vertically derive and use product industry chains to penetrate other market fields, seeking new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production scope, achieving transformation through the metamorphosis of existing technology. Overall diversification emphasizes expanding the variation in the scope of operations. Enterprises need to consider factors such as raw materials and technology related to their products and the market to expand the scope of operations[5].

3. The Impact of Diversification Strategy on the Performance of Game Companies

In the operation process of all game companies, the impact of diversification strategy on company performance is uniformly divided into two parts: changes in the operational model and shifts in strategic planning. These two parts of transformation gradually produce effects to drive performance improvement. The impacts of diversification strategy are multifaceted. This paper will take the Sanqi Mutual Entertainment Game Company as a case study to analyze and research the impact of diversification strategy on the performance of game companies[6].

(1) Changes in Operational Model

Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is very broad, which is also the advantage brought by the diversification strategy. The company's operations are not only involved in interactive entertainment but also encompass the development and publishing of mobile and web games under Sanqi Mutual Entertainment Game Company. Moreover, in recent developments, Sanqi Mutual Entertainment Game Company continues to innovate by keeping up with technology trends, expanding the market to include layouts in film, animation, music, VR technology, and various live streaming and pan-entertainment businesses, thereby shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company.

Sanqi Mutual Entertainment Game Company was established in 1995, but its 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 or other entertainment industries, always facing the risk of being overwhelmed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, with subsequent poor operations and market contraction, Sanqi Mutual Entertainment eventually could not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, it was a valuable development opportunity for Sanqi Mutual Entertainment. The two companies completed restructuring of assets in various industries through multi-faceted collaboration. It is worth noting that the strategy continuously operated by Sanqi Mutual Entertainment had already shown its initial edge. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition into a dual-core listed company with advanced manufacturing and modern cultural creativity parallelly operating. Correspondingly, the company operation strategy of Sanqi Mutual Entertainment changed, covering the business scope formerly under the cultural creative industry. 2014, Wuhu Shunrong Auto Parts Co., Ltd. initially covered the business scope under the cultural creative industry.

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