This Lord is Very Scientific-Chapter 691 - 623
(Anti-theft, to be released later.) Abstract: 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 way games are disseminated is no longer limited to rigid promotional methods, and the influence of games has gradually expanded to various aspects of life. Correspondingly, gaming companies need to continuously integrate resources, innovate, update, and improve performance to keep pace with rapid development. The diversification strategy perfectly caters to the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as the preferred mode for corporate development, is equally applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to elucidate the impact of diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; gaming company; performance; impact; Sanqi Mutual Entertainment Company
The diversification strategy is a market strategy employed by companies during operations to capture and explore new markets. It also serves as a strategic planning tool for companies to avoid risks encountered in operating a single business by entering new business fields with targeted preparation. Applying a diversification strategy to a gaming company can effectively improve company performance, bringing about a process of transformation from quantitative change to qualitative change in the company's development.
1. The macro background of the diversification strategy
Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economic and cultural landscape has shown great revival. On April 30, 2021, according to data published 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 occupies a large proportion of the cultural industry. Although the pandemic did not severely impact the gaming industry, the inability to carry out offline activities always affects gaming companies' performance. The warming of the cultural industry implies that the great development and prosperity of the cultural industry can lead more gaming companies toward sustainable development[2].
From the outbreak of last year's pandemic to its current stabilization, the state has issued relevant policies from financial, institutional, and financial aspects to support the development of the cultural industry. Although the pandemic hindered people from traveling, it could not control the spread speed of online networks. More and more new media appeared, driving the development of the cultural industry during pandemic prevention, but the competitive environment within the cultural industry is fierce as various enterprises vie to enter the online market. Many traditional offline enterprises couldn't withstand the pandemic's impact and were eliminated by society, but in these short two years, many cultural industries have successfully transformed. These companies largely rely on diversification strategy models to accelerate transformation and upgrading, and during the pandemic prevention period, when residents' consumption levels have significantly increased, they also gained considerable benefits, achieving more diversified development models and revenue channels, such as the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period, setting an example for most gaming companies to follow[3].
2. Brief analysis and classification of the diversification strategy
(1) Brief analysis of the diversification strategy 𝓯𝓻𝒆𝙚𝒘𝓮𝙗𝓷𝒐𝓿𝙚𝒍.𝙘𝓸𝙢
The diversification strategy was proposed by the founder of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is included in many countries' management policies, so much so that today every large and small enterprise strives to gain a position according to the diversification strategy development model[4].
(2) Classification and meaning of the diversification strategy
The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. Each of the four modes derived from the diversification strategy has a different meaning. Horizontal diversification refers to enterprises using the basic conditions provided by the market to produce new products that meet new user needs, thereby driving market consumption. Vertical integration is when enterprises, based on their development situation, derive vertically and penetrate other market fields with the product industry chain to seek new consumer groups. Concentric diversification focuses more on innovation in existing technologies, requiring the production of new products within the existing production range, achieving the process through the transformation of existing technologies. Conglomerate diversification emphasizes expanding the scope of operations, requiring the company to connect related raw materials, technology, market factors, etc., to expand the scope of operations[5].
3. The impact of the diversification strategy on gaming companies' performance
In all gaming companies' operations, the impact of the diversification strategy on gaming companies' performance can be divided into two parts: changes in the operating model and shifts in strategic planning. The effects from these two parts gradually stimulate a company's performance improvement. The impact of the diversification strategy is multifaceted. This paper will analyze and study the impact of the diversification strategy on gaming companies' performance using Sanqi Mutual Entertainment Game Company as an example[6].
(1) Changes in the operating model
Currently, the primary operating range of Sanqi Mutual Entertainment Game Company is quite extensive, which is also due to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also covers mobile games and web games' research and publication. In recent years, keeping abreast of technological advances and continuing to innovate has broadened its market to include film, animation, music, VR technology, and various live entertainment, shaping a cultural industry chain unique to Sanqi Mutual Entertainment Game Company.
Sanqi Mutual Entertainment Game Company was established in 1995. However, the initial development journey was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, initially not involved in the entertainment industry such as gaming, always facing the risk of being annexed by the market. But with the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, inadequate management and a contracted market eventually led to Sanqi Mutual Entertainment being unable to escape the fate of acquisition.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. shares. Although it was technically acquired, it was still a development opportunity worth seizing for Sanqi Mutual Entertainment. Through multi-party collaboration, the two companies completed various industry asset restructurings. Notably, the exhibition strategy that Sanqi Mutual Entertainment has always operated began to show its prowess; the company transformed from a single modern cultural and creative company before the acquisition into a dual-main business listed company where advanced manufacturing and modern cultural creativity run parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment Company is also undergoing changes, with the business range that the original cultural and creative industry covered
