This Lord is Very Scientific-Chapter 636 - 568: Mom... Mom?? (Extra 3)

(Anti-theft, post at night.) Abstract: With the advancement of technology and the coverage model of smart networks, the rise of the gaming industry in recent years is evident. The way games are propagated is no longer limited to rigid promotional modes. The influence of games is gradually expanding into all aspects of life. Correspondingly, gaming companies need to continuously integrate resources, innovate and upgrade, and improve performance with the rapid development of the times. Diversification strategy perfectly aligns with the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, it remains a preferred mode of development for enterprises and is equally applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of gaming companies.

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

Diversification strategy is a market strategy method adopted by enterprises in the operation process to occupy more new markets and explore new markets. It is also a strategic plan used by enterprises to avoid risks encountered in operating a single business, targeting and preparing to enter new business fields. Applying diversification strategy to gaming companies can effectively improve company performance, bringing about a transition from quantitative change to qualitative change in the development of gaming companies.

1. The macro background of the diversification strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economic and cultural sectors have shown a good recovery trend. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to its pre-pandemic level[1]. This is very favorable news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the arrival of the pandemic did not greatly impact the gaming industry, the inability to conduct offline activities always affected the performance of gaming companies. The revitalization of the cultural industry means 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 the outbreak of last year's pandemic to the current stabilization of the pandemic, the country has introduced relevant policies supporting the development of the cultural industry from various aspects such as finance, systems, and finance. Although the pandemic has hindered people's travel, it cannot control the speed of online network dissemination. More and more new media have emerged to drive the development of the cultural industry during the pandemic prevention period. However, because every enterprise wants to squeeze into the online market, the competitive environment in the cultural industry is very intense. Many traditional offline enterprises have been eliminated by society under the impact of the pandemic at this time, but in just these two years, many successful transformations in the cultural industry have also emerged. Most of these companies rely on the diversification strategy model to accelerate transformation and upgrade, and have also reaped substantial rewards during the pandemic prevention period when residents' consumption level has significantly increased, obtaining more diversified development modes and income channels. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention period is worth learning from for most gaming companies [3].

2. Brief analysis and classification of the diversification strategy

(1) Brief analysis of the diversification strategy

The diversification strategy was proposed by the father of strategic management, Igor Ansoff, in his book "Corporate Strategy." This world-influencing strategic model has been involved in management guidelines and policies of various countries, to the extent that today every large and small enterprise is seeking a place according to the development model of diversification strategy[4].

(2) Classification and meaning of diversification strategy

The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes derived from the diversification strategy have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new user needs, thereby driving market consumption; vertical integration refers to enterprises deriving vertically based on their own development situation and penetrating the product value chain into other market fields to seek new consumers; concentric diversification focuses more on original technology innovation, requiring the production of new products within the original production range, achieving through the transformation of original technology; conglomerate diversification pays more attention to the change of business scope expansion, requiring enterprises to expand the business scope by connecting raw materials, technology, market and other factors related to their own products [5].

3. The impact of diversification strategy on the performance of gaming companies

It can be said that in the operation processes of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: changes in the operating model and shifts in strategic planning. The effects gradually generated by these two parts drive the company's performance improvement. The impact brought by diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on gaming company performance [6].

(1) Changes in the operating model 𝑓𝘳𝘦𝑒𝑤𝑒𝘣𝘯ℴ𝘷𝘦𝓁.𝑐𝑜𝑚

At present, the main operating scope of Sanqi Mutual Entertainment Game Company is very wide, which is also the advantage brought 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 and web games, keeping up with modern technology through continuous innovation in recent years, expanding the market to film and animation in the two-dimensional space, and shaping the market cultural industrial chain belonging to Sanqi Mutual Entertainment Game Company in the fields of music and VR technology as well as various general entertainment businesses like live broadcasting.

In 1995, Sanqi Mutual Entertainment Game Company was established, but its initial development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. At first, Sanqi Mutual Entertainment's industrial chain did not involve the operation of game and entertainment industries, 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 poor late-stage operation and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd.'s shares. Although nominally acquired, for Sanqi Mutual Entertainment, this was a developmental opportunity worth seizing. The two companies completed various industrial asset reorganizations through extensive collaboration. It is worth mentioning that the strategic operations that Sanqi Mutual Entertainment has always pursued are starting to emerge, transforming from a single modern cultural creative company before the acquisition to the now dual-focused listed company combining advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operational strategy is also undergoing changes, with the originally covered business scope of the cultural creative industry.