This Lord is Very Scientific-Chapter 629 - 561: Still Trying to Abduct (Monthly Ticket Request at the Beginning of the Month!)
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 everyone. 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, gaming companies need to continually integrate resources, innovate, and upgrade to improve performance in line with the rapid development of the era. A diversification strategy aligns well with the planning needs and development goals within the gaming industry. In the context of economic globalization, a diversification strategy, as a preferred development model for enterprises, is equally applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of a diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; Gaming company; Performance; Impact; The diversification strategy of Sanqi Mutual Entertainment Company is a market strategic measure adopted by enterprises to capture and explore new markets. It also serves as a strategic plan for enterprises to avoid risks encountered during the operation of a single business and to enter new business fields with target and preparation. Applying a diversification strategy to gaming companies can effectively improve company performance, bringing about a transformation in the development of gaming companies from quantitative to qualitative change.
1. The 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 situations show a great recovery. On April 30, 2021, according to the statistics released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to the pre-pandemic level[1]. This is very favorable news for the gaming industry, which occupies a significant portion of the cultural industry. Although the arrival of the pandemic did not greatly affect the gaming industry, the inability to conduct offline activities always impacted the performance of gaming companies. The revival of the cultural industry means, for most gaming companies, that the great development and prosperity of the cultural industry can promote and drive more gaming companies onto a path of sustainable development[2].
From last year's outbreak of the pandemic to the current stabilization, the state has issued relevant policies from various aspects such as finance, systems, and finance to support the development of the cultural industry. Although the pandemic has blocked people's travel, 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, as various enterprises all want to squeeze into the online market, the competition 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. But in these short two years, many successfully transformed cultural industries have also emerged, most of which relied on the diversification strategy model to accelerate transformation and upgrading. During the pandemic prevention and control period, when residential consumption levels significantly improved, they also gained substantial benefits and diversified development models and income channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention and control period is worth learning for most gaming companies[3].
2. A Brief Analysis and Classification of Diversification Strategy
(1) A Brief Analysis of Diversification Strategy
Diversification strategy was proposed by the founding father of strategic management Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic model has been involved in management policies in many countries, so much so that today every sizeable enterprise is seeking a place according to the development model of diversification strategy[4].
(2) Classification and Meaning of Diversification Strategy
There are four types of diversification strategies: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of the four different models derived from diversification strategies vary. Horizontal diversification refers to the enterprise using the original conditions provided by the market to produce new products that can meet new user needs, thereby driving market consumption. Vertical integration is when enterprises, based on their development situation, derive vertically and use the product industry chain to penetrate other market fields to seek new consumption objects. Concentric diversification focuses more on innovation of existing technology, requiring the production of new products within the existing production range, realizing the whole process through the transformation of existing technology. Conglomerate diversification emphasizes expanding the scope of operations, where enterprises need to connect related raw materials, technology, and market factors related to their products for expansion [5].
3. The Impact of Diversification Strategy on the Performance of Gaming Companies
It can be said that in the operation process of all gaming companies, the impact of diversification strategy on the performance of gaming companies is uniformly divided into two parts: the change of operation mode and the shift of strategic planning. The changes in these two parts gradually produce effects that drive the improvement of company performance. The impact brought by the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze the impact of diversification strategy on gaming company performance[6].
(1) Change in Operation Mode
Currently, the main operation range of Sanqi Mutual Entertainment Game Company is very extensive. This is also an advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also undertakes the research and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years of development, it has continued to innovate and broadened the market to the layout of film, television, and anime 2D, also shaping its market cultural industry chain in music, VR technology, and various live broadcast and other 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 that initially did not involve game and other entertainment industry operations in its industrial chain, always facing the risk of being swallowed by the market. But relying on steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, with later mismanagement and market contraction, Sanqi Mutual Entertainment eventually could not escape being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60 percent of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was a developmental opportunity worth seizing. The two companies completed the asset restructuring of various industries through multi-faceted cooperation. Notably, the cultural creative industry always operated by Sanqi Mutual Entertainment has not been covered by other industries. In such a development model, the diversification development strategy has already begun to show its edge, turning Sanqi Mutual Entertainment Company from a previously single modern cultural creative company into today's advanced production manufacturing and modern cultural creativity.
