This Lord is Very Scientific-Chapter 689 - 621
(To prevent theft, sent at the time.) Abstract: Accompanied by technological advancement and the coverage model of intelligent networks, the rise of the gaming industry in recent years is self-evident to the public. The mode of spreading games is no longer confined to stereotypical promotional models, and the influence of games has gradually expanded to various aspects of life. Accordingly, game companies also need to continuously integrate resources with the rapid development of the times, innovate, and improve performance, while the diversification strategy perfectly aligns with the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as the preferred development model for enterprises, is also applicable to game companies. This article interprets the impact of diversification strategy on the performance of game companies, using Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification Strategy; Game Company; Performance; Impact; Sanqi Mutual Entertainment Company 𝒇𝒓𝒆𝒆𝙬𝒆𝒃𝓷𝒐𝓿𝙚𝙡.𝒄𝓸𝒎
Diversification strategy is a market strategy adopted by enterprises to occupy and explore new markets and is also used for strategic planning aimed at avoiding risks encountered in operating a single business by entering new business fields with targets and preparation. Applying the diversification strategy to game companies can effectively enhance company performance, driving the development of game companies from quantitative changes to qualitative changes.
1. The Macro Background of Diversification Strategy
Entering 2021, with the strong control over the pandemic by the state, people's lives have returned to normal, and economic culture is also showing a promising trend of recovery. 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 pre-pandemic levels [1]. This is very beneficial news for the gaming industry, which occupies a significant proportion of the cultural industry. Although the arrival of the pandemic did not cause major impacts on the gaming industry, the inability to conduct offline activities always affects the performance of game companies. Through the warming of the cultural industry, for most game companies, this means 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 state has promulgated relevant policies from multiple aspects such as finance, institutions, and finance to support the development of the cultural industry. Although the pandemic has hindered people's travel, it cannot control the spread speed of online networks. Increasingly, new media is emerging, driving the development of cultural industries during pandemic prevention and control periods. However, since various enterprises want to squeeze into the online market, the competitive environment among cultural industries is extremely fierce. Many traditional offline enterprises cannot withstand the impact of the pandemic and are eliminated by society during this period. But in just two years, many successful cultural industry transformations have emerged, and these enterprises mostly rely on the diversification strategy model to accelerate transformation and upgrades, similarly reaping significant benefits during the pandemic prevention and control period when residents' consumption levels significantly increased, gaining more diversified development models and income channels. For example, the transformation made by Sanqi Mutual Entertainment Company during pandemic prevention and control is worth emulating by most game companies [3].
2. Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
Diversification strategy, proposed by the father of strategic management Igor Ansoff, is mentioned in his book "What is Corporate Strategy" in terms of classification. This influential strategic model is involved in management guidelines and policies of multiple countries, so that today, enterprises large and small are seeking a position based on the development model of diversification strategy [4].
(2) Classification and Meaning of Diversification Strategy
Divertification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The distinct meanings arising from the four different models of diversification strategy also vary. Horizontal diversification refers to the enterprise utilizing the original conditions provided by the market to produce new products that can meet new user demands, thus driving market consumption. Vertical integration refers to enterprises deriving vertically based on their development situation, using product industry chains to penetrate into other market fields to seek new consumers. Concentric diversification focuses more on the innovation of existing technologies, requiring the production of new products within the existing production scope, realizing through the transformation of existing technology. Overall diversification focuses more on expanding the scope of business changes, requiring enterprises to relate raw materials and technology related to their own products as well as market factors to expand their scope of operations [5].
3. Impact of Diversification Strategy on the Performance of Game Companies
It can be said that in the operation process of all game companies, the impact of diversification strategy on their performance is uniformly divided into changes in operating modes and shifts in strategic planning. The effects gradually take effect from these two aspects, enhancing the company's performance. The impact brought by diversification strategy is multifaceted. This paper will analyze the impact of diversification strategy on the performance of game companies, taking Sanqi Mutual Entertainment Game Company as an example [6].
(1) Change in Operating Modes
Looking at present, the main operating scope of Sanqi Mutual Entertainment Game Company is very broad, which is also thanks to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also encompasses the research and publishing of mobile games and web games under Sanqi Mutual Entertainment Game Company. In its recent development, it continuously innovates by closely following the times and technology, expanding its market to the layout of film, animation, and the second dimension, also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small-scale enterprise. Initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of game and entertainment industries, always at 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. Yet, accompanying later poor operation 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 sixty percent of the equity. Although nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth grasping. The two companies completed asset restructuring of various industries through extensive collaboration. It is worth mentioning that the exhibition strategy continuously operated by Sanqi Mutual Entertainment has already begun to show signs at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-focused listed company presently, with advanced manufacturing and modern cultural creativity running concurrently. Correspondingly, the company's operational strategy for Sanqi Mutual Entertainment has also undergone changes, with the previously covered business scope of the cultural creative industry
