This Lord is Very Scientific-Chapter 710 - 642
(Anti-theft, to be issued later.) Abstract: With the advancement of technology and the coverage mode of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The dissemination methods of games have moved beyond rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate and iterate with the rapid development of the times to improve performance. Diversification strategy precisely meets the planning needs and developmental goals within the gaming industry. Against the backdrop of economic globalization, diversification strategy, as the preferred mode of enterprise development, is equally applicable to game companies. This article explains 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
Diversification strategy is a market strategic approach adopted by enterprises in the operation process to occupy new markets and develop new markets further. It is also a strategic plan adopted by enterprises to avoid risks encountered during the operation of a single business and to enter new business fields with target and preparedness. Applying diversification strategy in game companies can effectively enhance company performance, bringing the development of game companies from quantitative to qualitative change.
1. The macro background of diversification strategy
Entering 2021, with the country's strong control of the pandemic, people's lives are returning to normal, and the economic culture also shows a promising revival. On April 30, 2021, according to the relevant data released by the National Bureau of Statistics, the national cultural industry development has basically returned to pre-pandemic levels [1]. This news is extremely favorable for the gaming industry, which occupies a significant proportion of the cultural industry. Although the arrival of the pandemic did not significantly affect the gaming industry, the inability to conduct offline activities has always affected the performance of game companies. The warming of the cultural industry means that, for most game companies, the great development and prosperity of the cultural industry can promote and drive more game companies onto a path of sustainable development [2].
From the outbreak of last year's pandemic to the current stabilization, the country has issued relevant policies from finance, systems, 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 the online network. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention period. However, since various enterprises are striving to enter the online market, the competition environment within the cultural industry is very fierce. Many traditional offline enterprises have been eliminated by society due to the impact of the pandemic. However, in these short two years, many successfully transformed cultural industries have emerged, and these enterprises mostly rely on diversification strategy models to accelerate transformation and upgrading. Even during the significant rise in resident consumption levels during the pandemic prevention period, they have reaped substantial benefits and gained more diversified development models and funding income channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth learning from for most game companies [3].
2. Brief analysis and classification of diversification strategy
(a) Brief analysis of diversification strategy
Diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff. In his work What is Corporate Strategy, he mentioned the classification of diversification strategy. This globally influential strategic model is involved in management guidelines and policies across many countries, so today, every small and large enterprise is seeking a place according to the development model of diversification strategy [4].
(b) 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 have different meanings. Horizontal diversification refers to enterprises using the original market conditions to produce new products that meet the new needs of users, thereby driving market consumption. Vertical integration is where enterprises derive vertically according to their own development conditions, penetrating the product industry chain into other market fields to seek new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring new product production within the original production range, achieving it through the metamorphosis of existing technology. Conglomerate diversification focuses more on expanding the range of operations, where enterprises need to connect factors related to their own 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 game companies
It can be said that in the operation process of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: the change of operational model and the shift in strategic planning. The effectiveness generated from these two aspects gradually drives the enhancement of company performance. The impact brought by diversification strategy is multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and research the impact of diversification strategy on game company performance [6].
(1) Change in operational model 𝐟𝐫𝕖𝗲𝘄𝚎𝗯𝕟𝐨𝕧𝐞𝚕.𝕔𝕠𝐦
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is extensive, relying on the advantages brought by diversification strategy. The company's business is not limited to interactive entertainment operations. Sanqi Mutual Entertainment Game Company also undertakes the research and development and distribution of mobile and web games. In recent developments, it has kept pace with technological advances and continually innovated, expanding the market to include film and television and anime subcultures. Additionally, it is shaping its own market cultural industry chain within music, VR technology, and various live-streaming entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but its early development wasn't smooth sailing. The company's predecessor was a small enterprise, and initially, its industry chain didn't involve the operation of games and other entertainment industries, facing the constant risk of being annexed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. But with subsequent poor operations and market shrinkage, Sanqi Mutual Entertainment ultimately could not escape the fate of 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, this was a development opportunity worth seizing. Both companies completed asset restructuring of various industries through multi-party cooperation. Notably, the strategic operation that Sanqi Mutual Entertainment had always managed began to show its edge. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-listed company with both advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operation strategy also changed, with the scope of business initially covered by the cultural creative industry expanding.
