This Lord is Very Scientific-Chapter 833 - 765

(Anti-theft, will be released 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 methods of game dissemination are no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Accordingly, game companies also need to continually integrate resources, innovate, and improve performance amid the rapid development of the times. A diversification strategy perfectly meets the planning needs and development goals within the gaming industry. Under the backdrop of economic globalization, the diversification strategy, as the preferred model for corporate development, is equally applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of a diversification strategy on the performance of game companies.

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

The diversification strategy is a market strategy and method employed by companies in their operations to capture and develop new markets. It is also a strategy necessary for companies to avoid risks encountered while operating a single business by strategically entering new business areas with targeted preparations. Applying a diversification strategy to a game company can effectively improve company performance, leading to a transformation from quantitative to qualitative development for the game company's growth.

1. Macro Background of Diversification Strategy

As we enter 2021, with effective control of the pandemic by the state, people's lives have returned to normal, and cultural and economic activities have shown a great trend of recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry basically returned to pre-pandemic levels [1]. This is very favorable news for the gaming industry, which holds a significant proportion of the cultural industry. Although the pandemic did not significantly impact the game industry, the inability to conduct offline activities always affected the performance of game companies. The recovery of the cultural industry indicates for most game companies that the great development and prosperity of the cultural industry can promote more game companies to enter a path of sustainable development [2].

From the outbreak of the pandemic last year to the current stabilization, the country has introduced relevant policies from multiple aspects such as finance, systems, and finance to support the development of the cultural industry. Although the pandemic hindered people's travel, it could not control the spread speed of the online network. More and more new media emerged, promoting the development of the cultural industry during the pandemic prevention and control period. Due to the intense competition environment in the cultural industry caused by various companies striving to enter the online market, many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. However, in this short period of two years, many successfully transformed cultural industries emerged. Most of these enterprises relied on a diversification strategy to accelerate transformation and upgrading, gaining substantial achievements amid significantly increased residential consumption levels during the pandemic prevention period. They acquired more diversified development models and income channels. For instance, the transformation carried out by Sanqi Mutual Entertainment Company during the pandemic prevention period is worthy of reference by most game companies [3].

2. Analysis and Classification of Diversification Strategy

(1) Brief Analysis of Diversification Strategy

The diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategy model is involved in the management guidelines and policies of multiple countries, to the extent that today every large and small enterprise is seeking a place using the development model of the diversification strategy [4].

(2) Classification and Meaning of Diversification Strategy

The diversification strategy is divided into four types: concentric diversification, conglomerate diversification, horizontal diversification, and vertical integration. Each of these derived from the diversification strategy has different meanings. Horizontal diversification refers to enterprises producing new products that can meet new user demands using the original market conditions, thus driving market consumption. Vertical integration is when an enterprise, based on its development status, vertically derives and penetrates its product industry chain into other market areas to seek new consumers. Concentric diversification emphasizes innovation in existing technologies and requires the production of new products within the existing production scope, achieving this through the transformation of existing technology. Conglomerate diversification focuses more on expanding the scope of operation changes, needing enterprises to connect related raw materials, technologies, and market factors to expand their operating range [5].

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

It can be said that in the operation process of all game companies, the impact of a diversification strategy on performance is uniformly divided into two parts: changes in the operation model and the shift in strategic planning. These two parts of transformation gradually produce effects that drive the improvement of company performance. The impact of a diversification strategy is multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of a diversification strategy on the performance of game companies [6].

(1) Change in Operation Model

So far, the main operating range of Sanqi Mutual Entertainment Game Company is very extensive, which is also due to the advantages brought by a diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company also fully undertakes the research and distribution of mobile and web games. In recent developments, the company has kept pace with technology, continually innovating, and expanding the market into the fields of film, animation, and the second dimension. It also constructs its market cultural industry chain in music, VR technology, various live broadcasts, and other pan-entertainment businesses.

Sanqi Mutual Entertainment Game Company was established in 1995, but the initial development path was not smooth. The company's predecessor was a small enterprise, and its industrial chain initially did not involve the operation of games and other entertainment industries, making it constantly at risk of being swallowed by the market. However, through the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. But with poor operations and market contraction in later periods, Sanqi Mutual Entertainment still couldn't 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 a development opportunity worth seizing. Through collaboration, the two companies completed asset restructuring across various industries. Notably, the strategic operations consistently operated by Sanqi Mutual Entertainment had begun to show promise at this point. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-main business listed company combining advanced production manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy also changed, affecting the business scope covered by the original cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. covered the business scope of the previous cultural creative industry.