This Lord is Very Scientific-Chapter 708 - 640
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(Anti-theft, will be released in due course.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years has been evident to citizens. The modes of game dissemination are no longer confined to rigid promotional methods, and the influence of games is gradually expanding to all aspects of life. Correspondingly, gaming companies also need to continuously integrate resources, innovate and iterate, and improve performance with the rapid development of the era. The diversification strategy perfectly meets the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategy, as the primary mode of enterprise development, is equally applicable to gaming companies. This article takes Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic measure adopted by enterprises during operations to occupy and expand new markets further. It is also the strategic planning that enterprises need to adopt to avoid risks encountered during the operation of a single business and intentionally and preparedly enter new business fields. Applying diversification strategy practically to gaming companies can effectively improve company performance, bringing about a transformation process from quantitative change to qualitative change for gaming companies' development.
1. The macro background of the diversification strategy
Entering 2021, with the state's effective control over the pandemic, people's lives have returned to normal, and both the economy and culture have shown a positive 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 restored to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which occupies a significant portion of the cultural industry. Although the arrival of the pandemic did not cause much impact on the gaming industry, the inability to conduct offline activities affected the performance of gaming companies. The warming of the cultural industry implies a great development and prosperity for most gaming companies, promoting more gaming companies to embark on a path of sustainable development[2].
From last year's outbreak to the current stabilization of the pandemic, the state has issued relevant policies from aspects such as finance, systems, and finance to support the development of the cultural industry. Although the pandemic blocked people's steps out, it could not control the speed of online network spread. More and more new media emerged, driving the development of the cultural industry during pandemic prevention and control. However, as businesses competed to enter the online market, the competitive environment within the cultural industry became very fierce. Many traditional offline businesses could not withstand the impact of the pandemic and were eliminated by society, but in these short two years, numerous successfully transformed cultural industries have also emerged, mainly relying on diversification strategy modes to accelerate transformation and upgrade. During the pandemic prevention and control period, when residents' consumption levels significantly increased, they also harvested abundantly, obtaining more diversified development modes and income channels. Examples include the transformation Sanqi Mutual Entertainment Company underwent during pandemic prevention and control, which is worth most gaming companies' imitation[3].
2. Simplified analysis and categorization of diversification strategy
(a) Simplified analysis of diversification strategy
Diversification strategy is proposed by Igor Ansoff, the father of strategic management. In his book "What is Corporate Strategy," he discusses the categorization of diversification strategy. This globally influential strategic mode is involved in the management guidelines and policies of several countries, resulting in many corporations, both large and small, seeking a place according to the development mode of diversification strategy[4].
(b) Categorization and meanings 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 each have different meanings. Horizontal diversification refers to the use of original market conditions by enterprises to produce new products that can meet new user demands, thereby driving market consumption; vertical integration is where enterprises vertically derive based on their development conditions, penetrating other market fields using product industry chains to seek new consumers; concentric diversification focuses more on innovation of existing technologies, requiring new product production within the existing production scope, with the entire process realized through the metamorphosis of existing technology; conglomerate diversification focuses more on expanding operating range changes, requiring businesses to expand operating scope by connecting factors related to their products such as raw materials, technology, and markets[5].
3. The impact of diversification strategy on gaming company performance
It's said that in the operation processes of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: changes in operating modes and shifts in strategic planning. The effects gradually generated from these two changes drive the enhancement of company performance. The impact of diversification strategy is multifaceted, and this paper will analyze and research the impact of diversification strategy on gaming company performance using Sanqi Mutual Entertainment Game Company as an example[6]. 𝙛𝒓𝓮𝙚𝔀𝒆𝒃𝓷𝒐𝓿𝙚𝓵.𝙘𝒐𝒎
(1) Changes in operating modes
At present, Sanqi Mutual Entertainment Game Company's main operating scope is very extensive, which is the advantage brought by diversification strategy. The company is not only involved in interactive entertainment operations but also exclusively handles the research and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent developments, it has kept pace with modern technology and continuously innovated, expanding the market layout to areas including film, animation, and ACG. It also shapes its market cultural industry chain in music, VR technology, and various live broadcast fields and other pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth sailing. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise, initially involving in the industrial chain did not encompass game and entertainment industry operations, constantly facing the risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Yet, with poor post-development operation and market contraction, Sanqi Mutual Entertainment could not escape being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity. Although it was nominally acquired, for Sanqi Mutual Entertainment, it was an opportunity for development worth seizing. The two companies, through multifunctional collaboration, completed the asset restructuring of various industries. It is worth mentioning that the strategy that Sanqi Mutual Entertainment has been operating revealed its prowess at this time. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creative company before acquisition to today's dual-core listed company combining advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operation strategy also underwent changes, with the original cultural creative industry business scope covered.
