This Lord is Very Scientific-Chapter 667 - 599

(Anti-theft, will be sent later.) Abstract: Along with the progress of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years has been widely recognized. The dissemination of games is no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate updates, and improve performance with the rapid development of the times. The diversification strategy seamlessly aligns with the planning demands and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred model for enterprise development, is equally applicable to game companies. This paper elucidates the impact of the diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Company as a case study.

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

Diversification strategy is a market strategic method adopted by enterprises to capture more new markets and expand into new market territories during operations. It is also a strategic plan used by enterprises to avoid risks encountered in the operation of singular businesses and enter new business fields with targeted preparation. Applying diversification strategies to game companies can effectively enhance company performance and bring a process from quantitative to qualitative changes in the development of game companies.

1. The macroscopic background of diversification strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economy and culture are showing a promising trend of recovery. On April 30, 2021, data published by the National Bureau of Statistics indicated that the development of the national cultural industry has basically returned to pre-pandemic levels [1]. This is extremely beneficial news for the gaming industry, which occupies a significant portion of the cultural industry. Although the pandemic did not cause much harm to the gaming industry, the inability to conduct offline events still impacted the performance of game companies. The recovery of the cultural industry means, for most game companies, that the great development and prosperity of the cultural industry can promote more game companies to embark on the path of sustainable development [2].

From last year's outbreak of the pandemic to the current stabilization, the country has introduced relevant policies supporting the development of the cultural industry from multiple aspects such as finance, system, and economy. Although the pandemic has halted people's travel, it cannot control the speed of online network transmission. The emergence of more and more new media has driven the development of the cultural industry during the pandemic prevention and control period. However, as companies strive to enter the online market, the competition environment within the cultural industry has become very fierce. Many traditional offline enterprises were unable to withstand the impact of the pandemic and were eliminated by society. However, within these two short years, many successful cultural industry transformations have emerged, most relying on the accelerated transformation and upgrade of the diversification strategy model. During the pandemic prevention and control period, when resident consumption levels increased significantly, they equally gained a wealth of diverse development models and funding income channels. The transformation Sanqi Mutual Entertainment Company underwent during pandemic prevention and control is worth learning from for most game companies [3].

2. Simplified analysis and classification of diversification strategy

(i) Simplified analysis of diversification strategy 𝒇𝓻𝓮𝓮𝙬𝙚𝒃𝒏𝓸𝙫𝒆𝙡.𝓬𝓸𝒎

Diversification strategy was proposed by the father of strategic management, Igor Ansoff. In his book 'What is Enterprise Strategy,' he mentioned the classification of diversification strategies. This globally influential strategic model is involved in the management policy guidelines of many countries, such that today, businesses large and small are seeking a position by following the development model of diversification strategy [4].

(ii) Classification and meanings of diversification strategy

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and comprehensive diversification. The four different modes derived from the diversification strategy also 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 involves enterprises deriving vertically based on their development situation, penetrating the product industry chain into other market fields to seek new consumer objects. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production range, realized through the transformation of existing technology. Comprehensive diversification places more emphasis on expanding changes in business scope, requiring enterprises to connect with factors related to their products such as raw materials, technology, and market to expand business scope [5].

3. Impact of diversification strategy on the performance of game companies

In the operations of all game companies, the impact of diversification strategy on the performance of game companies is uniformly divided into two parts: the change in operating mode and the shift in strategic planning. From the transformation of these two parts, effects gradually arise driving the enhancement of company performance. The impacts of diversification strategy are multifaceted. This paper will analyze and examine the impact of diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Game Company as an example [6].

(1) Change in operating mode

At present, the primary operating range of Sanqi Mutual Entertainment Game Company is quite broad, which is relying on the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also entirely encompasses the research and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. Moreover, in recent years of development, it has continuously innovated by closely following the technology of the era, expanding the market to layout film, anime, and secondary elements, and forging its market cultural industry chain in music, VR technology, and various entertainment businesses like live streaming.

Sanqi Mutual Entertainment Game Company was established in 1995. However, the initial development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise; initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries, always facing the risk of being swallowed by the market. Nevertheless, thanks to the steady development of a single industry, Sanqi Mutual Entertainment Company got listed in 2011. But with subsequent poor operations and market contraction, Sanqi Mutual Entertainment ultimately couldn't escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired sixty percent of the equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, it was a development opportunity worth grasping. The two companies completed asset restructuring across various industries through multifaceted collaboration. It is worth mentioning that the expansion strategy operated by Sanqi Mutual Entertainment had already shown its prominence at that time. Sanqi Mutual Entertainment Company transitioned from a singular modern cultural creative company before being acquired to today's dual-main business listed company of advanced production manufacturing and modern cultural creativity running parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment was also changing. The original scope of business covered by cultural creative industries.