This Lord is Very Scientific-Chapter 663 - 595

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(Anti-theft, will send it when the time comes.) Summary: With the advancement of technology and the coverage model of smart networks, the rise of the game industry in recent years has been apparent to the public. The mode of spreading games is no longer confined to rigid 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 improve performance with the rapid development of the era. A diversification strategy precisely caters to the planning needs and development goals within the game industry. In the context of economic globalization, a diversification strategy, as a model of choice for enterprise development, is equally applicable to game companies. 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

A diversification strategy is a market strategy used by enterprises during their operations to conquer new markets and expand into new markets. It is also a strategic planning method that enterprises adopt to avoid risks encountered when operating a single business by strategically entering new business fields. Applying a diversification strategy to game companies can effectively improve company performance and bring a transformation from quantitative change to qualitative change in the company's development.

1. The macro background of diversification strategy

Entering 2021, under the strong control of the pandemic by the state, people's lives are back on track, and the economy and culture are showing a positive 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 the pre-pandemic level[1]. This is very favorable news for the game industry, which holds a large proportion within the cultural industry. Although the pandemic has not significantly impacted the game industry, the inability to conduct offline activities has always affected the game companies' performance. The warming of the cultural industry means that for most game companies, the development and prosperity of the cultural industry can promote more game companies to embark on the road of sustainable development[2].

From the outbreak of the epidemic last year to the current stabilization, the state has introduced relevant policies from multiple aspects such as finance, system, and finance to support the development of the cultural industry. Although the pandemic has hindered people's travel, it cannot control the speed of online network dissemination. The emergence of more and more new media promotes the development of the cultural industry during the pandemic prevention and control period. However, as every company wants to enter the online market, the competition environment within the cultural industry has become extremely fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society, yet in this short two-year span, many successfully transformed cultural industries have also emerged. Most of these companies accelerated transformation and upgrading by relying on the diversification strategy model, and during the pandemic prevention and control period when consumption levels of residents rose significantly, they also yielded substantial returns, gaining more diverse development modes and revenue channels. For instance, the transformation of Sanqi Mutual Entertainment during the pandemic prevention and control period is worth emulating by most game companies[3].

2. Brief analysis and classification of diversification strategy

(a) Brief analysis of diversification strategy

The diversification strategy was proposed by the father of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model has been involved in the policy frameworks of multiple countries' management guidelines, so much so that today, enterprises of all sizes are striving for a place following the development mode of a diversification strategy[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 four different modes derived from diversification strategy also have different meanings: horizontal diversification refers to producing new products that can meet users' new needs using the original conditions provided by the market, thus driving market consumption; vertical integration refers to enterprises vertically deriving based on their own development situations, using product industry chains to infiltrate other market fields to seek new consumption objects; concentric diversification focuses more on the innovation of original technology, requiring the production of new products within the original production range, realizing the process through the metamorphosis of original technology; conglomerate diversification emphasizes expanding the scope of operations, requires enterprises to expand their scope by connecting with raw materials, technology, and market factors related to their own products[5].

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

It can be said that in the operations of all game companies, the impact of diversification strategy on company performance is divided into two parts: the change of operation mode and the shift of strategic planning. The effects gradually generated from these two parts drive the improvement of company performance. The impact brought by diversification strategy is multi-faceted. This paper will analyze and study the impact of diversification strategy on the performance of game companies, using Sanqi Mutual Entertainment Game Company as an example[6].

(1) Changes in operation mode

Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is also the advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but it also fully undertakes the R&D and distribution of mobile games and web games, and in recent years, keeping up with the times, innovates constantly. It has expanded the market to include film and anime post-production and is shaping the market cultural industry chain of Sanqi Mutual Entertainment Game Company within genres like music, VR technology, and various live broadcasts, among other pan-entertainment businesses.

In 1995, Sanqi Mutual Entertainment Game Company was founded, but in the initial stage of development, it was not all plain sailing. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the industrial chain of Sanqi Mutual Entertainment did not involve the operation of game and other entertainment industries, always facing the risk of being annexed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011, but with poor management and market contraction in the later period, Sanqi Mutual Entertainment ultimately could 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 it was acquired in name, for Sanqi Mutual Entertainment, it was an opportunity worth seizing. The two companies completed the asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the strategy that Sanqi Mutual Entertainment has always operated in showed its brilliance at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before the acquisition to a current dual-main-business listed company integrating advanced manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's corporate operational strategy also underwent changes, and the business coverage of the original cultural creative industry was...