This Lord is Very Scientific-Chapter 716 - 648
(Anti-theft, will be published at that time.) 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 the public. The dissemination of games is no longer limited to rigid promotional modes, and the influence of games has gradually extended to all aspects of life. Corresponding game companies also need to continuously integrate resources, innovate, update, and improve performance amidst the rapid development of the era. A diversification strategy aptly meets the planning needs and development goals within the gaming industry. In the context of economic globalization, a 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 measure adopted by enterprises during operation to occupy and explore new markets. It is also a strategic plan used to avoid risks encountered in operating a single business, aimed at entering new business fields with focus and preparation. The practical application of a diversification strategy to game companies can effectively enhance company performance, bringing about a quantitative to qualitative transformation in the development of game companies.
1. The macro background of diversification strategy
Entering 2021, with the effective control of the pandemic by the country, people's lives returned to normal, and the economic and cultural landscape showed a promising resurgence. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the national cultural industry basically resumed to pre-pandemic levels [1], which is very beneficial news for the gaming industry that accounts for a large proportion of the cultural industry. Although the arrival of the pandemic did not significantly impact the gaming industry, the inability to conduct offline activities always affected the performance of game companies. The recovery of the cultural industry means that for most game companies, the great development and prosperity of the cultural industry can promote more game companies to embark on a path of sustainable development [2].
From the outbreak of last year's pandemic to the current stabilization, the country has issued policies from several aspects including finance, regulation, and banking to support the development of the cultural industry. While the pandemic halted people's travel, it could not control the speed of online network dissemination. More and more new media emerged, driving the development of the cultural industry during the pandemic prevention period. However, as companies strive to squeeze into the online market, competition among cultural industries has become very fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society at this time, but numerous successful transformations in cultural industries have emerged during these two short years. These companies mostly rely on the acceleration of transformation and upgrading through diversification strategy models. During the pandemic prevention period, with significant improvement in residents' consumption levels, they have also reaped substantial results, acquiring more diversified development modes and channels for financial income. For instance, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth learning for most game companies [3].
2. Brief analysis and classification of diversification strategy
(1) Brief analysis of diversification strategy
Diversification strategy was proposed by the founding father of strategic management, Igor Ansoff. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic model is involved in management policies of multiple countries, making every enterprise of all sizes seek a place according to the diversification strategy development mode today [4].
(2) Classification and meaning of diversification strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The meanings of the four different modes derived from the diversification strategy vary. Horizontal diversification refers to the enterprise utilizing the original market conditions to produce new products that meet new user needs, thereby driving market consumption. Vertical integration is when enterprises derive vertically based on their own development situation, use product supply chains to penetrate other market fields to seek new consumer targets. Concentric diversification emphasizes innovation of existing technologies, requiring new product production within the original production range, realizing the whole process through the transformation of existing technology. Overall diversification focuses more on expanding the range of operations. Enterprises need to consider factors related to their products, such as raw materials, technology, and market, to expand the scope of operations [5].
3. Impact of diversification strategy on game company performance
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: operational mode changes and strategic planning shifts. The transformation of these two parts gradually produces effects, boosting company performance enhancement. The impact brought by diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on game company performance by using Sanqi Mutual Entertainment Game Company as an example [6].
(1) Changes in operating mode
Currently, the main operating range of Sanqi Mutual Entertainment Game Company is very extensive, relying on the advantages brought by diversification strategy. Not only does the company's business involve interactive entertainment operation, but also the development and distribution of mobile games and web games is fully undertaken by Sanqi Mutual Entertainment Game Company. In recent years' development, the company follows the era of technology with continuous innovation, expanding the market to include film and animation layout, also shaping a market culture industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live broadcasts and other pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was founded in 1995, but the early development path was not all smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small-scale enterprise, which did not involve the operation of games and other entertainment industries in its industrial chain initially, always facing the risk of being swallowed by the market. However, with the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Yet, with later poor operations and market contraction, Sanqi Mutual Entertainment eventually did not avoid being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed asset restructuring of various industries through multi-party cooperation. It is worth mentioning that the strategy consistently operated by Sanqi Mutual Entertainment was already beginning to show its edge at that time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired into the current dual-main-industry listed company of advanced manufacturing and modern cultural creativity. Corresponding changes also occurred in the company's operational strategy, encompassing the scope of business covered by the original cultural creative industry.
