This Lord is Very Scientific-Chapter 709 - 641
(Anti-theft, to be posted later.) Abstract: With the advancement of technology and the proliferation of intelligent networks, the rise of the gaming industry in recent years is evident to all citizens. The mode of spreading games is no longer confined to rigid promotional methods, and the influence of games has gradually expanded to various aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate and upgrade, and improve performance with the rapid development of the times. A diversification strategy precisely 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 game companies. This paper uses 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 means adopted by enterprises in the process of operation to occupy more new markets and develop new markets. It is also a strategic planning used by enterprises to avoid risks encountered during the operation of a single business and to enter new business fields in a targeted and prepared manner. Applying diversification strategy practically to gaming companies can effectively improve company performance and bring a process of transformation from quantitative to qualitative change to the development of gaming companies.
1. The macro background of diversification strategy
Entering 2021, with the country's effective control over the pandemic, people's lives have returned to normal, and the economy and culture also show a splendid 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 the pre-pandemic level [1]. This is very favorable news for the gaming industry, which occupies a large proportion of the cultural industry. Although the arrival of the pandemic did not significantly affect the gaming industry, the inability to carry out offline activities always impacted the performance of gaming companies. Through the revitalization of the cultural industry, for most gaming companies, this means that the great development and prosperity of the cultural industry can promote more gaming companies to embark on a path of sustainable development [2].
From the outbreak of the epidemic last year to the current stabilization of the pandemic, the country has issued relevant policies from multiple aspects such as finance, systems, and finance to support the development of the cultural industry. Although the epidemic blocked people's travel, it could not control the speed of online network dissemination. More and more new media appeared, driving the development of the cultural industry during pandemic prevention and control. However, due to the eagerness of various enterprises to break into the online market, the competitive environment within the cultural industry is extremely fierce. Many traditional offline enterprises were eliminated by society under the influence of the pandemic at this time. However, in just two years, many successfully transformed cultural industries have emerged, and most of these enterprises have relied on the diversification strategy model to accelerate transformation and upgrading. They have also reaped abundant rewards and gained more diversified development models and sources of funding during the pandemic prevention and control period when resident consumption levels improved significantly. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period is worth learning from by most gaming companies [3].
2. A brief analysis and classification of the diversification strategy
(i) A brief analysis of the diversification strategy
Diversification strategy was proposed by Igor Ansoff, the forefather of strategic management, who mentioned the classification of diversification strategies in his book "Corporate Strategy". This world-influencing strategic model is involved in the management policies of multiple countries, so much so that every large and small enterprise today is seeking a place following the development model of diversification strategy [4].
(ii) Classification and meaning of diversification strategy
There are four types of diversification strategies: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different modes derived from diversification strategy each have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new needs of users, thus driving market consumption. Vertical integration is when enterprises vertically derive based on their development situation, using the product industry chain to penetrate other market fields to seek new consumption targets. Concentric diversification focuses more on innovation in existing technology and requires the production of new products within the existing production range, with the entire process achieved through the transformation of existing technologies. Overall diversification focuses more on expanding the range of operations. Enterprises need to connect with factors related to their products such as raw materials, technology, and markets to expand the scope of operations [5].
3. The impact of diversification strategy on the performance of gaming companies 𝒻𝑟ℯℯ𝑤𝑒𝑏𝑛𝘰𝓋𝑒𝓁.𝒸𝑜𝘮
It can be said that in the operation process of all gaming companies, the impact of diversification strategy on gaming companies' performance is uniformly divided into two parts: changes in the operation model and strategic planning shifts. The effectiveness gradually generated by these two parts of changes drives performance improvement in the company. The impact brought by the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on gaming company performance [6].
(1) Changes in the operation model
Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is very extensive, and this is due to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but the research and issuance of mobile games and web games are also fully handled by Sanqi Mutual Entertainment Game Company. Moreover, in recent years, following technological advancements, the market has been expanded to include the layout of film, animation, and ACG (Anime, Comic, and Game) sectors. It is also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live broadcast and pan-entertainment businesses.
In 1995, Sanqi Mutual Entertainment Game Company was established, but the development path in the early stages was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the industrial chain of Sanqi Mutual Entertainment did not involve the operation of entertainment industries such as games, and there was always a risk of being swallowed by the market. However, relying on the stable development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. Yet, with the subsequent poor management and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was acquired in name, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed asset restructuring of various industries through multi-party collaboration. It's worth mentioning that the strategy that Sanqi Mutual Entertainment has always operated on began to show promising prospects at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-major listed company with advanced manufacturing and modern cultural creativity operating in parallel. Correspondingly, the company's operation strategy also underwent changes, and the business scope covered by the original cultural creative industry
