This Lord is Very Scientific-Chapter 655 - 587: Three Books Released Simultaneously, Abyss Riots, and Great Wilderness Paper Prices Soar!

(Anti-theft, release when due.) Summary: 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 public. The way games are spread has moved beyond rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, gaming companies need to continuously integrate resources, innovate, iterate, and improve performance in line with the rapid development of the times. A diversification strategy aptly meets the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, diversification strategy, as the preferred model for corporate development, is also applicable to gaming companies. This paper uses Sanqi Mutual Entertainment Company as an example to illustrate the impact of diversification strategy on the performance of gaming companies. 𝙛𝒓𝓮𝙚𝔀𝒆𝒃𝓷𝒐𝓿𝙚𝓵.𝙘𝒐𝒎

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

Diversification strategy is a market strategy method employed by companies during operations to occupy and explore new markets more effectively. It is also a strategic plan adopted to avoid risks encountered in operating a single business, allowing targeted and prepared entry into new business fields. Applying diversification strategy practically to gaming companies can effectively enhance company performance, bringing about a transition from quantitative to qualitative change in the development of gaming companies.

1. Macro Background of Diversification Strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives return to normal, presenting a great picture of economic and cultural recovery. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the cultural industry nationwide has basically returned to pre-pandemic levels[1]. For the gaming industry, which accounts for a significant proportion of the cultural industry, this is very good news. Although the pandemic did not significantly impact the gaming industry, the inability to hold offline activities always affected the performance of gaming companies. The recovery of the cultural industry means that for most gaming companies, the substantial development and prosperity of the cultural industry can promote and drive more gaming companies to embark on a path of sustainable development[2].

From the outbreak of the pandemic last year to the current stabilization, the state has promulgated relevant policies supporting the development of the cultural industry from multiple aspects such as finance, institutions, and finance. Although the pandemic hindered people's travel, it could not control the spread speed of online networks. The emergence of more new media led to the development of the cultural industry during the pandemic prevention period. However, the fierce competition environment within the cultural industry resulted from each company wanting to enter the online market. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. In this short span of two years, many successfully transformed cultural industries emerged, and these enterprises mostly relied on the diversification strategy model to accelerate transformation and upgrading, and during the pandemic prevention period, when residents' consumption levels significantly increased, they also gained substantial benefits, obtaining more diversified development models and income channels. For instance, the transformation undertaken by Sanqi Mutual Entertainment Company during the pandemic prevention period is worthy of emulation by most gaming companies[3].

2. Brief Analysis and Classification of Diversification Strategy

(a) Brief Analysis of Diversification Strategy

Diversification strategy was proposed by Igor Ansoff, the originator of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model has been involved in the management policies of multiple countries, leading to every enterprise, large or small, seeking a place according to the diversification strategy's development model[4].

(b) Classification and Meaning of Diversification Strategy

The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of these four different modes derived from diversification strategy vary as well. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products meeting new user demands, thereby driving market consumption. Vertical integration is the enterprise vertically deriving according to its development situation, penetrating other market fields through the product industry chain to seek new consumer targets. Concentric diversification focuses more on innovating existing technology, requiring the production of new products within the existing production scope, realizing the transformation through the metamorphosis of the original technology. Conglomerate diversification emphasizes expansion of the business scope, requiring enterprises to connect with factors like raw materials, technology, and market related to their products to expand the business scope[5].

3. Impact of Diversification Strategy on Gaming Companies' Performance

It can be said that during the operation of all gaming companies, the impact of diversification strategy on gaming companies' performance is uniformly divided into two parts: the change of operating models and the shift of strategic planning. The transformations in these two parts gradually generate effects that drive the enhancement of company performance. The impact brought by diversification strategy is multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on gaming companies' performance[6].

(1) Change of Operating Models

Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also due to the advantages brought by diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company also undertakes the development and distribution of mobile games and web games. In recent years, following the trend of technological advancements, it has constantly innovated and extended the market to layouts in film and anime, and has also shaped the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live broadcast activities and other pan-entertainment businesses.

In 1995, Sanqi Mutual Entertainment Company was established, but the initial development path was not smooth. The predecessor of Sanqi Mutual Entertainment Company was a small-scale enterprise and initially its industry chain did not involve the operation of games and other entertainment industries, with the risk of being swallowed by the market always looming. But relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. However, with subsequent poor operations and market contraction, Sanqi Mutual Entertainment Company ultimately did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although officially acquired, for Sanqi Mutual Entertainment Company, this was a development opportunity worth seizing. Through multiple cooperation, the two companies completed the asset restructuring of various industries. It is worth noting that the exhibition strategy always operated by Sanqi Mutual Entertainment Company was already showing initial promise at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to now a dual-industry listed company with advanced production manufacturing and modern cultural creativity running parallel, corresponding with changes in the company's operating strategy. The scope of business covered by the original cultural creative industry...