This Lord is Very Scientific-Chapter 639 - 571: Perfect Return!

(Anti-theft, to be posted tomorrow.) 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 people. The way games are spread is no longer restricted to stereotypical 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 and update, and improve performance in line with the era's rapid development. The diversification strategy precisely caters to the planning needs and development goals within the gaming industry. Under the background of economic globalization, the diversification strategy, as the preferred mode of corporate development, is also applicable to gaming companies. This paper uses the example of Sanqi Mutual Entertainment Company to illustrate the impact of a diversification strategy on game companies' performance.

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

The diversification strategy is a market strategy tool that enterprises use during their operations to occupy and explore new markets. It is also a strategic plan adopted to avoid risks encountered in operating a single business by entering a new business field with preparation and targeting. Applying the diversification strategy to game companies can effectively improve company performance, bringing the company's development from a quantitative to a qualitative change.

1. Macroscopic Background of Diversification Strategy

Stepping into 2021, with the country's effective control of the pandemic, people's lives have returned to normal, and the economy and culture are showing a magnificent recovery trend. On April 30, 2021, data released by the National Bureau of Statistics indicated that the overall development of the national cultural industry has recovered to pre-pandemic levels [1]. This is very favorable news for the gaming industry, which holds a considerable proportion in the cultural industry. Although the arrival of the pandemic did not significantly impact the gaming industry, the inability to conduct offline activities always affects game companies' performance. The cultural industry's warming means that the great development and prosperity of the cultural industry can promote and drive more game companies to embark on a path of sustainable development [2] for most game companies.

From last year's outbreak of the pandemic to the current stability, the state has promulgated relevant policies from financial, institutional, and financial aspects to support the development of the cultural industry. Although the pandemic blocked people's traveling, it could not control the speed of online network dissemination. More and more new media have appeared, driving the cultural industry development during pandemic prevention and control. However, because many enterprises want to squeeze into the online market, the competition environment within the cultural industry is fierce. Many traditional offline companies could not withstand the pandemic's impact and were eliminated by society. But in these short two years, many successfully transformed cultural industries have emerged. Most of these enterprises rely on the diversification strategy model to accelerate transformation and upgrading, harvesting bountifully and obtaining diversified development modes and revenue channels during the pandemic prevention and control period, when residents' consumption levels have significantly improved. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period is worth emulating by most game companies [3].

2. Brief 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 strategies. This strategic model, which has influenced the world, is addressed in management policies in several countries, so much so that every small and large enterprise today seeks its place according to the development model of the 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 models derived from the diversification strategy have various meanings. Horizontal diversification refers to enterprises utilizing the original conditions provided by the market to produce new products that meet users' new needs, thus driving market consumption. Vertical integration is when an enterprise derives vertically based on its development situation, using the product supply chain to penetrate other market areas to seek new consumers. Concentric diversification focuses more on innovation of existing technology and requires new product production within the original production range, achieving the entire process through the transformation of existing technology. Conglomerate diversification focuses more on expanding the operational scope, requiring enterprises to connect with raw materials, technology, market-related factors to expand their operational scope [5].

3. Impact of Diversification Strategy on Game Companies' Performance

It can be said that during the operation of all game companies, the impact of the diversification strategy on game companies' performance is uniformly divided into two parts: the change of operational mode and strategic planning shift. From these two parts, the transformation gradually produces effects to drive the company's performance improvement. The impact brought by the diversification strategy is multifaceted. This thesis will analyze and study the impact of the diversification strategy on game companies' performance using the example of Sanqi Mutual Entertainment Game Company [6].

(1) Change in Operational Mode

Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is also relying on the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment. At the same time, Sanqi Mutual Entertainment Game Company is in charge of R&D and publishing of mobile games and web games under its umbrella, and in recent years, it has continued to innovate in line with the technology of the times, expanding the market to the layout of film and anime second-dimension. It is also shaping the market cultural industry chain belonging to the Sanqi Mutual Entertainment Game Company in music, VR technology, and various live broadcasts and other pan-entertainment businesses.

The establishment of Sanqi Mutual Entertainment Game Company in 1995, however, was not smooth in its early development path. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise. Initially, Sanqi Mutual Entertainment's industrial chain did not involve the operation of games and other entertainment industries, always at risk of being swallowed by the market. However, relying on the stable development of a single industry, Sanqi Mutual Entertainment Company went public in 2011, but with subsequent poor 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 the equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was nominally acquired, it was a development opportunity worth seizing for Sanqi Mutual Entertainment. Through multiple collaborations, the two companies completed asset restructuring for various industries. It is worth mentioning that Sanqi Mutual Entertainment always operated strategies that initially showed promise. Sanqi Mutual Entertainment Company has transformed from a single modern cultural and creative company before the acquisition to a dual-main-business listed company that now runs advanced manufacturing and modern cultural creativity side by side. Correspondingly, the company's operational strategies have also changed, and the business scope previously covered by the cultural and creative industry.