This Lord is Very Scientific-Chapter 647 - 579: Intense Debate! The Legend Who Couldn’t Help but Join

(Anti-theft, to be published in the evening.) Abstract: Along with technological advancements and the coverage model of intelligent networks, the rise of the game industry in recent years has been witnessed by the nation. The spread of games has moved beyond traditional promotional models, and the influence of games has gradually extended to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, update, and improve their performance as they keep pace with the rapid development of the times. A diversification strategy perfectly aligns with the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategy is also applicable as the preferred model for corporate development in the game industry. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of game companies.

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

Diversification strategy is a market strategy tool that enterprises adopt in the process of operation to occupy more new markets and explore new ones. It also allows enterprises to avoid the risks encountered in the operation of a single business. It is a strategic plan for entering new business fields with targeting and preparedness. The practical application of a diversification strategy in game companies can effectively enhance company performance and bring about a transformation from quantitative to qualitative change in the development of game companies.

1. The Macro Background of Diversification Strategy

As we enter 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economic culture also shows a promising revival trend. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the national cultural industry basically recovered to pre-pandemic levels [1]. This is very favorable news for the game industry, which holds a significant proportion within the cultural industry. Although the arrival of the pandemic did not greatly impact the game industry, the inability to conduct offline activities always affects the performance of game companies. The recovery of the cultural industry indicates that, for most game companies, this can promote the larger scale growth and development, driving more game companies to embark on a path of sustainable development [2].

From the outbreak of last year's pandemic to the current stability, the country has promulgated relevant policies from fiscal, institutional, and financial aspects to support the development of the cultural industry. Although the pandemic has blocked people's travel footsteps, it cannot control the speed of online network transmission. More and more new media have emerged, driving the development of the cultural industry during pandemic prevention and control. However, as each enterprise strives to enter the online market, the competitive environment within the cultural industry is very intense. Many traditional offline enterprises cannot withstand the impact of the pandemic and are eliminated by society at this time. However, within these short two years, numerous successful transformations in the cultural industry have emerged, most of which accelerated transformation and upgrading relying on diversification strategies. During the pandemic prevention and control period, when residents' consumption levels significantly increased, they also reaped quite a bit, gaining more diversified development models and funding income channels. For example, the transformation made by Sanqi Mutual Entertainment Company during pandemic prevention and control is worth learning from for most game companies [3].

2. Brief Analysis and Classification of Diversification Strategy 𝚏𝐫𝚎𝗲𝕨𝐞𝐛𝕟𝚘𝐯𝚎𝗹.𝕔𝐨𝗺

(a) Brief Analysis of Diversification Strategy

Diversification strategy was proposed by the father of strategic management, Igor Ansoff, in his book "Corporate Strategy." He mentioned the classification of diversification strategy. This world-influencing strategic model is involved in management policy in multiple countries, so today, enterprises of all sizes seek a place according to the development model of diversification strategy [4].

(b) Classification and Meaning of Diversification Strategy

Diversification strategy is generally divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different models derived from diversification strategy also have different meanings. Horizontal diversification refers to enterprises using original market conditions to produce new products that satisfy new user needs, thereby driving market consumption. Vertical integration is when enterprises longitudinally develop according to their own development situation, utilizing product industry chains to penetrate other market fields to seek new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring new product production within the original production scope through the metamorphosis of existing technology. Conglomerate diversification focuses more on changes in expanding business scope. Enterprises need to connect with factors related to raw materials, technology, and markets of their own products to expand the business range [5].

3. Impact of Diversification Strategy on Game Companies' Performance

It can be said that in the operation process of all game companies, the impact of diversification strategy on game companies' performance is unified into two parts: the change of operating mode and the transfer of strategic planning. The gradual effect generated from these two parts drives company performance improvement. The impact brought about 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 game companies' performance [6].

(1) Change of Operating Mode

Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very broad, which also relies on the advantages brought by diversification strategy. The company's business involves not only the operation of interactive entertainment, but its research, development, and distribution of mobile and web games are also fully encompassed by Sanqi Mutual Entertainment Game Company. In recent years, it has kept pace with era technology to continuously innovate, extending the market to the layout of film and anime subcultures. It has also shaped its own market cultural industry chain within music, VR technology, and various live entertainment businesses.

Sanqi Mutual Entertainment Game Company was established in 1995, but its initial development path was not smooth sailing. Initially, the predecessor of Sanqi Mutual Entertainment was a small business, and its industry chain did not involve entertainment industries like gaming. There was always the risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. Accompanied by poor post-operation and market tightening, Sanqi Mutual Entertainment ultimately could not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity. Although nominally acquired, for Sanqi Mutual Entertainment, this was an opportunity for development worth grasping. The two companies completed the asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the exhibition strategy that Sanqi Mutual Entertainment has been operating initially showed its prowess. Sanqi Mutual Entertainment Company went from a single modern cultural creative company before the acquisition to the current dual-main listed company engaging in advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operation strategy also underwent change, the business scope covered by the original cultural creative industry