This Lord is Very Scientific-Chapter 835 - 767

(Anti-theft, to be released in due time) Abstract: With the progress of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The ways games are disseminated are no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and improve performance to keep up with the fast-paced development. A diversification strategy fits well with the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred development model for enterprises, is also applicable to gaming companies. This paper illustrates the impact of the 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

The diversification strategy is a market strategy means that enterprises adopt in the process of operation to capture more new markets and develop new markets. It also serves as a strategic plan for enterprises to avoid risks encountered in operating a single business and purposefully and preparedly enter new business fields. Applying the diversification strategy to a game company can effectively improve company performance, leading to a qualitative change from a quantitative one in the development of the game company.

1. The macro background of the diversification strategy

Stepping into 2021, with the country's effective control of the pandemic, people's lives have returned to normal, and the economic culture is showing a good recovery trend. On April 30, 2021, relevant data released by the National Bureau of Statistics showed that the development of the national cultural industry has basically returned to the pre-pandemic level [1]. This is very favorable news for the game industry, which accounts for a large proportion of the cultural industry. Although the arrival of the pandemic did not significantly impact the game industry, the inability to conduct offline activities has always affected game company performance. With the warming of the cultural industry, this means that the great development and prosperity of the cultural industry can promote and drive more game companies onto the path of sustainable development [2].

From last year's pandemic outbreak to the current pandemic stability, the country has issued relevant policies from the perspectives of finance, systems, and finance, among others, to support the development of the cultural industry. Although the pandemic has blocked people's travel, it cannot control the spread speed of the online network. More and more new media have emerged to drive the development of the cultural industry during the pandemic prevention and control period. Yet, since every enterprise aims to break into the online market, the competitive environment within the cultural industry is very fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. However, many successfully transitioned cultural industries have emerged in these short two years, most of which have accelerated their transformation and upgrading by relying on a diversification strategy model. During the pandemic prevention period, when residents' consumption levels notably increased, they also gained substantial returns, obtaining more diversified development models and channels of financial income. For instance, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention period is worth learning from for most game companies [3].

2. A brief analysis and classification of the diversification strategy

(1) A Brief Analysis of the Diversification Strategy

The diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff. In his book "Corporate Strategy," he discussed the classification of diversification strategies. This strategy, which has influenced the world, is involved in the management policies of several countries, so that today every enterprise, large and small, is seeking development according to the diversified strategy development model [4].

(2) The classification and meaning of the diversification strategy

In total, diversification strategy is classified into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. Four different modes derived from the diversification strategy have distinct meanings. Horizontal diversification refers to an enterprise using the original conditions provided by the market to produce new products that meet new user needs, thus driving market consumption. Vertical integration is the enterprise's vertical derivation according to its development situation, using the product industrial chain to penetrate other market fields to seek new consumer targets. Concentric diversification focuses more on innovation in existing technology, requiring the production of new products within the existing production range. The whole process is achieved through the transformation of the existing technology. Conglomerate diversification pays more attention to expanding the scope of operation changes, where enterprises need to liaise with factors such as raw materials and technology related to their own products and the market to expand the scope of operation [5].

3. The Impact of the 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 the performance of game companies is uniformly divided into two parts: the change of the operation mode and the shift of strategic planning. From the reform of these two parts, they gradually produce effects that drive the enhancement of company performance. The impact brought by the diversification strategy is multi-faceted. This thesis will take Sanqi Mutual Entertainment Game Company as an example to analyze and examine the impact of the diversification strategy on the performance of game companies [6].

(1) Change in operation mode

At present, it seems that the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also supported by the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company also fully handles the research and publishing of mobile and online games. In recent developments following the latest technologies, they have expanded the market to encompass film and anime, creating their own cultural industry chain within the field of pan-entertainment business, including music, VR technology, and various live broadcasts.

Sanqi Mutual Entertainment Game Company was established in 1995, but the early development road was not smooth sailing. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and at first, its industrial chain did not involve the operation of games and other entertainment industries. There was always the risk of being swallowed by the market. However, thanks to the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. Yet, with poor later-stage operation and market contraction, Sanqi Mutual Entertainment was ultimately not able to 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 it was nominally acquired, it was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies, through multiple collaborations, completed the assets restructuring of various industries. It is worth mentioning that the exhibition strategy that Sanqi Mutual Entertainment had been operating was beginning to show promise. Sanqi Mutual Entertainment Company transitioned from a single modern cultural and creative company before being acquired to today's dual-major listed company with advanced production manufacturing and modern cultural creativity running parallel. Correspondingly, Sanqi Mutual Entertainment's company operating strategy is also undergoing change, extending the business scope covered by the cultural and creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. initiated the coverage of the business range in the cultural and creative industry.