This Lord is Very Scientific-Chapter 832 - 764

(Anti-theft, will release later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years has been evident to the public. The mode of game dissemination is no longer confined to rigid promotional methods, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, update and improve performance with the rapid development of the times. A diversification strategy precisely meets the planning needs and development objectives within the gaming industry. In the context of economic globalization, the diversification strategy, as the preferred model for enterprise development, is also applicable to game companies. This paper uses Sanqi Mutual Entertainment as an example to explain the impact of diversification strategy on the performance of game companies.

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

Diversification strategy is a market strategy adopted by enterprises to capture new markets and expand into new ones during their operations. It is also a strategic plan used by enterprises to avoid risks encountered in operating a single business and to enter new business fields with focus and preparation. Applying the diversification strategy to game companies can effectively improve company performance, and bring a process of quantifiable to qualitative change in the development of game companies.

1. Macro background of diversification strategy

Stepping into 2021, under the strong control of the pandemic by the state, people's lives are back on track, and the economic and cultural landscape presents a great recovery. On April 30, 2021, according to the relevant data published by the National Bureau of Statistics, the national cultural industry development basically returned to the pre-pandemic level [1]. This is very favorable news for the gaming industry, which occupies a large proportion of the cultural industry. Although the pandemic did not greatly impact the gaming industry, the inability to conduct offline activities has always affected the performance of game companies. The warming of the cultural industry implies that the great development and prosperity of the cultural industry can promote more game companies to embark on a path of sustainable development [2].

From the outbreak of the pandemic last year to the current stability, the state has issued relevant policies to support the development of the cultural industry from multiple aspects such as finance, institutions, and finance. Although the pandemic blocked people's travel, it could not control the speed of online network dissemination. More and more new media appeared, promoting the cultural industry's development during the pandemic prevention period. However, since all enterprises want to squeeze into the online market, the competitive environment within the cultural industry is very intense. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. But in this short span of two years, many successfully transformed cultural enterprises have emerged, relying on the diversification strategy model to accelerate transformation and upgrading. During the pandemic prevention period, when residents' consumption levels increased significantly, they also reaped substantial benefits, obtaining more diverse development models and revenue channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth emulating for most game companies [3].

2. Simple analysis and classification of diversification strategy

(1) Simple analysis of diversification strategy

Diversification strategy was proposed by the pioneer of strategic management Igor Ansoff. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is involved in the management policies and strategies of many countries, so that today every size of enterprise is seeking a place in accordance with the development model of diversification strategy [4].

(2) Classification and implication of diversification strategy

The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of the four different models derived from the diversification strategy are also different. Horizontal diversification refers to the development of new products that meet users' new needs by the enterprise using the original conditions provided by the market, thereby driving market consumption. Vertical integration means that the enterprise extends vertically according to its development situation, penetrating other market fields through the product industry chain to seek new consumers. Concentric diversification places more emphasis on the innovation of original technologies, requiring the production of new products within the original production range, and the entire process is realized through the transformation of original technologies. Conglomerate diversification places more emphasis on expanding business scope variation. The enterprise needs to contact factors related to its products, such as raw materials and technology, as well as the market, to expand its business scope [5].

3. Impact of diversification strategy on game company performance

In the operation 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 emerge from these two parts of transformation to drive company performance improvement. The impact of the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of the diversification strategy on game company performance [6].

(1) Changes in the operation model

Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also thanks to the advantages brought about by the 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. In recent years, keeping pace with the times' technology and innovation, it has expanded the market to layout film and anime subculture, and created Sanqi Mutual Entertainment Game Company's market cultural industry chain in music, VR technology, and various live broadcast and pan-entertainment businesses.

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, and initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment sectors, 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, but with later poor operations and market contraction, Sanqi Mutual Entertainment ultimately 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, for Sanqi Mutual Entertainment, this was an opportunity worth seizing. The two companies completed the restructuring of various industrial assets through multi-party collaboration. It is worth mentioning that Sanqi Mutual Entertainment's ongoing development strategy had already begun to show its edge. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition into a dual-main business listed company of advanced production manufacturing and modern cultural creativity in parallel. Correspondingly, Sanqi Mutual Entertainment's company operation strategy was changing, the business scope covered by the original cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. first covered the business scope of the cultural creative industry.