This Lord is Very Scientific-Chapter 826 - 758

(Anti-plagiarism, to be released later.) Abstract: With the advancement of technology and the coverage mode of intelligent networks, the recent rise of the game industry is widely acknowledged by the public. The dissemination method of games is no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Accordingly, game companies need to continuously integrate resources with the rapid development of the times, innovate and upgrade, improve performance, and diversification strategy perfectly aligns with the planning needs and development goals within the game industry. In the context of economic globalization, diversification strategy is also applicable to game companies as the preferred model for enterprise development. This article uses Sanqi Mutual Entertainment Company as a case study to elucidate 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 method adopted by enterprises during their operations to capture more new markets and develop new markets, and it is also a strategic plan used by enterprises to avoid risks encountered in operating a single business and enter new business fields with targeted preparations. Applying diversification strategy to game companies can effectively enhance company performance and bring about a process of transformation from quantitative change to qualitative change for the development of game companies.

1. Macro Background of Diversification Strategy

Stepping into 2021, with the country's strong control over the pandemic, people's lives have returned to normal, and the economic culture is showing a great revival. On April 30, 2021, according to the related data published by the National Statistics Bureau, the development of the national cultural industry has basically returned to the pre-pandemic level [1]. This is very good news for the gaming industry, which occupies a significant portion of the cultural industry. Although the pandemic did not severely impact the gaming industry, the inability to conduct offline activities always affected the performance of game companies. Through the recovery of the cultural industry, for most game companies, this means the great development and prosperity of the cultural industry can promote and drive more game companies towards sustainable development [2].

From last year's pandemic outbreak to the current pandemic stabilization, the country has issued relevant policies to support the development of the cultural industry from multiple aspects such as finance, system, and finance. Although the pandemic blocked people's travels, 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 and control period. However, because various enterprises want to enter the online market, the competitive environment between cultural industries is very fierce. Many traditional offline enterprises cannot withstand the impact of the pandemic and have been eliminated by society, but in this brief period of two years, many successful cultural industry transformations have emerged. Most of these enterprises rely on the diversification strategy model to accelerate transformation and upgrades, and during the pandemic prevention and control period where the residents' consumption level has significantly improved, they also gained substantial results, obtained more diversified development models and revenue channels, such as the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period, which is worth learning from for most game companies [3].

2. Brief Analysis and Classification of Diversification Strategy

(a) Brief Analysis of Diversification Strategy

Diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff, mentioned in his book "What is Corporate Strategy." The classification of diversification strategy is discussed in this book, a strategic model influencing the world involved in the management policies of multiple countries, so today every enterprise, big or small, is seeking a place in the strategic model of diversification strategy development [4].

(b) Classification and Meaning of Diversification Strategy

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different modes derived from diversification strategy have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user demands, thereby driving market consumption; vertical integration is based on the enterprise's development situation, vertically deriving and infiltrating the product industry chain into other market fields to seek new consumer targets; concentric diversification focuses more on innovation of existing technology, requiring new product production within the existing production range, achieving transformation through existing technology; overall diversification pays more attention to the expansion of business scope changes, and enterprises need to connect relevant raw materials, technology, market, and other factors to expand their business scope [5].

3. Impact of Diversification Strategy on Game Company Performance

In the operation processes of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in operation modes and shifts in strategic planning. The transformation of these two parts gradually generates effects that promote company performance enhancement. Diversification strategy brings multifaceted impacts. This paper will analyze and study the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as a case study [6].

(1) Changes in Operation Mode

Currently, the main operation range of Sanqi Mutual Entertainment Game Company is quite extensive, and this relies on the advantages brought by diversification strategy. The company's business not only involves the operation of interactive entertainment but also fully encompasses the research and issuance of mobile games and web games under the Sanqi Mutual Entertainment Game Company. Furthermore, in recent years of development, keeping pace with technological advancements and constant innovation, the market has expanded to layout film and television and animation subcultures, and also creates market cultural industry chains belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live streaming and entertainment businesses.

Founded in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth path in early development. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, Sanqi Mutual Entertainment's industrial chain did not involve the operation of games and other entertainment industries, always facing the risk of being swallowed up by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011, but with poor operations later and market contraction, Sanqi Mutual Entertainment finally did not escape the fate of acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed asset restructuring of various industries through multi-party collaboration, and it is worth mentioning that Sanqi Mutual Entertainment's operation strategy, which has been running constantly, has already begun to show its edge. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired to now an advanced manufacturing and modern cultural creative dual-main industry listed company. Correspondingly, the operating strategy of Sanqi Mutual Entertainment Company is also changing, covering the original cultural creative industry business scope. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. first covered the business scope of the cultural creative industry.