This Lord is Very Scientific-Chapter 675 - 607

(Anti-theft, will be sent later) Abstract: Along with the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The method of spreading games is no longer confined to traditional promotion models, and the influence of games has gradually extended to all aspects of life. Correspondingly, game companies also need to constantly integrate resources, innovate, update, and improve performance to keep pace with the rapid development of the times. The diversification strategy aptly meets the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred mode of enterprise development, is equally applicable to gaming companies. This article illustrates the impact of diversification strategies on the performance of game companies, using Sanqi Mutual Entertainment Company as an example.

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

Diversification strategy is a market strategic approach taken by enterprises during the operation process to occupy new markets and explore new markets more extensively. It is also a strategic plan adopted by enterprises to avoid risks encountered in operating a single business and to enter new business fields in a targeted and prepared manner. The practical application of diversification strategies in game companies can effectively improve company performance, providing a process of change from quantitative to qualitative for the development of game companies.

1. The macro background of diversification strategy

Entering 2021, under the effective control of the pandemic by the country, people's lives have returned to normal, and the economy and culture are also showing a great 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 recovered to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which accounts for a significant proportion of the cultural industry. Although the arrival of the pandemic did not greatly affect the gaming industry, the inability to conduct offline activities has always impacted game company performance. Through the recovery of the cultural industry, this means that the great development and flourishing of the cultural industry can promote and drive more game companies onto the path of sustainable development[2].

From the outbreak of the pandemic last year to the current stable situation, the country has introduced relevant policies from multiple aspects such as finance, institutions, and banking 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. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention period. However, due to the fact that many enterprises want to squeeze into the online market, the competitive 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 at this time. But within these short two years, many successfully transformed cultural industries have emerged, most of which rely on diversification strategic models to accelerate transformation and upgrade. During the pandemic prevention period, where resident consumption levels have significantly increased, they have also achieved fruitful results, gaining more diversified development models and sources of income, such as the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention period, which is worthy of reference for most game companies[3].

2. Brief analysis and classification of diversification strategy

(a) Brief analysis of diversification strategy

Diversification strategy was proposed by Igor Ansoff, the pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic model is related to management guidelines and policies in many countries, so that today every enterprise, big or small, is seeking a place according to the development model of diversification strategy[4].

(b) Classification and implications of diversification strategy

There are four types of diversification strategies: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes derived from diversification strategy have different implications. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new user needs, thus driving market consumption. Vertical integration refers to enterprises deriving vertically based on their development situation, using their product industry chain to penetrate other market fields, seeking new consumer targets. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production scope, realizing the whole process through the transformation of existing technology. Conglomerate diversification emphasizes more on expanding operating range variations, requiring enterprises to relate to factors like raw materials, technology, and market associated with their products to expand their operating range[5].

3. Impact of diversification strategy on game company performance

It can be said that in the operation process of all game companies, the impact of diversification strategy on company performance is uniformly divided into changes in operating models and shifts in strategic planning. From these two parts of the transformation gradually produces effects, driving company performance improvement. The impact brought by diversification strategy is diverse. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on game company performance[6].

(1) Change in operating model

Currently, Sanqi Mutual Entertainment Game Company's main operating scope is quite extensive, which is also the advantage brought by diversification strategy. The company not only involves interactive entertainment operations but also takes full charge of the development and distribution of mobile games and web games. Moreover, in recent developments, it has continuously innovated by keeping up with era technology, expanding the market to include film, television, and anime, also shaping its market cultural industry chain in music, VR technology, and various live streaming and pan-entertainment businesses belonging to Sanqi Mutual Entertainment Game Company.

Sanqi Mutual Entertainment Game Company was established in 1995, but the development path in the early stage was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, the industry chain of Sanqi Mutual Entertainment did not involve game and entertainment industry operations, posing a risk of being swallowed by the market at any time. But relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, with poor operations in the later stage and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a sixty percent equity stake. Although nominally acquired, for Sanqi Mutual Entertainment, this was an opportunity worth grasping for development. Through multi-party collaboration between the two companies, they completed the asset restructuring of various industries. It is worth mentioning that the exhibition strategy always operated by Sanqi Mutual Entertainment began to show its edge at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company prior to acquisition to a dual-main business listed company integrating advanced manufacturing and modern cultural creativity, corresponding to changes in company operating strategy. The scope of business covered by the original cultural creative industry