This Lord is Very Scientific-Chapter 697 - 629
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(Anti-theft, to be published later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years has been witnessed by the public. The dissemination methods of games are no longer confined to rigid promotional modes, and the influence of games has gradually expanded to various aspects of life. Correspondingly, gaming companies also need to continuously integrate resources, innovate and iterate, and improve performance in line with the fast-paced development of the era. Diversification strategies perfectly align with the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategies are also applicable to gaming companies as a preferred model for corporate development. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategies on the performance of gaming companies.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy measure taken by enterprises during operation to capture and explore new markets. It is also a strategic planning that enterprises use to avoid risks encountered during operating a single business by purposefully and preparedly entering new fields of business. Applying diversification strategies practically to gaming companies can effectively improve company performance and bring about a process of transformation from quantitative to qualitative for the development of gaming companies.
1. The Macro Background of Diversification Strategy
Entering 2021, under the strong control of the pandemic by the state, people's lives have returned to normal, and the economic and cultural sectors showed a greatly recovering trend. On April 30, 2021, according to the relevant data published by the National Bureau of Statistics, it was shown that the development of the national cultural industry had basically returned to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which holds a significant share in the cultural industry. Although the arrival of the pandemic did not cause severe impact to the gaming industry, the inability to conduct offline activities always affects the performance of gaming companies. With the warming of the cultural industry, for most gaming companies, this signifies the great development and prosperity of the cultural industry, which can promote more gaming companies to embark on a path of continuous development[2].
From the outbreak of the pandemic last year to the current stabilization of the pandemic, the state has issued relevant policies from multiple aspects such as finance, system, and finance to support the development of the cultural industry. The pandemic has blocked people's travels, but it cannot control the speed of online network dissemination. An increasing number of new media have emerged to drive cultural industry development during the pandemic prevention period. However, as each enterprise seeks to enter the online market, the competitive environment within the cultural industry is extremely fierce. Many traditional offline enterprises could not withstand the pandemic's impact and were eliminated by society. Yet within these short two years, many successfully transformed cultural industries emerged, and most of these enterprises relied on diversification strategies to accelerate transformation and upgrade. During the pandemic prevention period, while residents' consumption levels significantly improved, they achieved abundant results and acquired more diverse development models and funding channels, such as Sanqi Mutual Entertainment Company, whose transformation during the pandemic prevention period is worth imitation by most gaming companies[3].
2. Brief Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
Diversification strategy was proposed by Igor Ansoff, the founder of strategic management. In his book "Corporate Strategy," the classification of diversification strategy is mentioned. This globally influential strategic model is involved in several countries' management guidelines and policies, so today every small and large enterprise seeks its place according to the development model of diversification strategy[4].
(2) Classification and Meaning of Diversification Strategy
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 enterprises using the original conditions provided by the market to produce new products that can satisfy new user demands, thereby driving market consumption. Vertical integration is when an enterprise derives vertically according to its development situation, using the product industry chain to infiltrate other market fields to seek new consumers. Concentric diversification focuses more on the innovation of existing technologies and requires the production of new products within the original production range, achieving through the metamorphosis of existing technologies. Conglomerate diversification emphasizes expanding the change in the scope of operations, where enterprises need to connect with raw materials and technologies related to their products and other market factors to expand the scope of operations[5].
3. The Impact of Diversification Strategies on Gaming Company Performance
It can be said that in the operation process of all gaming companies, the impact of diversification strategies on gaming company performance is divided into two parts: the change of operational mode and the shift in strategic planning. The effects gradually generated from these two parts promote the improvement of company performance. The influence brought by diversification strategies is multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategies on the performance of gaming companies[6].
(1) Change in Operational Mode
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is very broad, which is an advantage brought by diversification strategies. The company's business not only involves the operation of interactive entertainment but also undertakes the research and development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. Moreover, in its recent development, it has continually innovated along with the era of technology, expanding the market to layout in films and anime ACG, and shaping its market culture industry chain in music, VR technology, and various live broadcast entertainment businesses.
Established in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth path in its early development. Its predecessor was a small enterprise, and initially, Sanqi Mutual Entertainment's industry chain did not involve gaming and entertainment industry operation, constantly facing the risk of being annexed by the market. Nonetheless, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, with subsequent poor operations and a tight market, Sanqi Mutual Entertainment ultimately couldn't avoid the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% equity stake. Although nominally acquired, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed the asset reorganization of various industries under multi-faceted collaboration. It is worth mentioning that the strategy that Sanqi Mutual Entertainment had always operated began to emerge at this point. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired to a dual-business listed company where advanced manufacturing and modern cultural creativity run parallelly. Correspondingly, Sanqi Mutual Entertainment's company operational strategy also underwent changes, with the originally covered business scope of cultural and creative industries
