This Lord is Very Scientific-Chapter 718 - 650
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(Anti-theft, to be sent later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is obvious to the public. The means of game dissemination are no longer confined to rigid promotion models, and the influence of games is gradually expanding to all aspects of life. Correspondingly, gaming companies also need to continuously integrate resources, innovate, and improve performance with the rapid development of the times. Diversification strategy precisely meets the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategy, being the preferred model for enterprise development, is also applicable to gaming companies. This article 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 tool used by enterprises during their operations to capture more new markets and explore new markets. It also helps enterprises avoid risks encountered when operating a single business, strategically entering new business areas with targeting and preparation. Applying diversification strategy to gaming companies can effectively improve company performance, leading to a transformation from quantitative to qualitative growth in game company development.
1. Macro Background of Diversification Strategy
Entering 2021, with the effective control of the pandemic by the state, people's lives are returning to normal, and the economy and culture are showing a promising recovery. On April 30, 2021, according to data released by the National Bureau of Statistics, the national cultural industry development basically returned to the pre-pandemic level [1]. This is excellent news for the gaming industry, which holds a large share in the cultural industry. Although the pandemic did not significantly impact the gaming industry, the inability to conduct offline activities has affected gaming companies' performance. The recovery of the cultural industry means, for most gaming companies, that the great development and prosperity of the cultural industry can promote more gaming companies to embark on the path of sustainable development [2].
From last year's pandemic outbreak to the current pandemic stabilization, the state has promulgated relevant policies to support cultural industry development from multiple aspects such as finance, systems, and finance. Although the pandemic has hindered people's travel, it cannot control the speed of online network dissemination. More and more new media emerged, driving the development of the cultural industry during the pandemic control period. However, as various enterprises strive to enter the online market, the competition environment within the cultural industry is extremely fierce. Many traditional offline enterprises have been eliminated by society due to the pandemic's impact, but in these short two years, many successfully transformed cultural industries have emerged. These enterprises mostly relied on diversification strategy models to accelerate transformation and upgrading, reaping significant rewards during the pandemic control period with significant increases in residents' consumption levels, obtaining more diversified development modes and funding sources. For example, Sanqi Mutual Entertainment Company's transformation during the pandemic control period is worth emulating for most gaming companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
Diversification strategy was proposed by the father of strategic management, Igor Ansoff. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is involved in management guidelines and policies in several countries, leading to every enterprise today, large or small, seeking a place through diversification strategy development models [4].
(2) Classification and Implication of Diversification Strategy
There are four types of diversification strategy: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of these four modes derived from diversification strategy also differ. Horizontal diversification refers to companies using the original conditions provided by the market to produce new products that meet users' new demands, thereby driving market consumption. Vertical integration is where companies vertically derive according to their own development situations, using the product industry chain to penetrate other market fields to seek new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring new product production within the existing production range, realizing the whole process through the transformation of existing technology. Conglomerate diversification focuses more on expanding business scope changes. Enterprises need to connect with factors related to their own products such as raw materials, technology, and market to expand the business scope [5].
3. Impact of Diversification Strategy on Game Company Performance
It can be said that in the operation of all game companies, the impact of diversification strategy on game company performance is unified in two parts: change in operation mode and shift in strategic planning. The effects generated from these two parts gradually drive the company's performance improvement. The impact brought by diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as an example [6].
(1) Change in Operation Mode
Currently, Sanqi Mutual Entertainment Game Company's main operational scope is quite extensive, relying on the advantage brought by diversification strategy. The company's business not only involves interactive entertainment operations, but also undertakes the R&D and publishing of mobile games and web games. In recent years, keeping pace with contemporary technology, they constantly innovate, expanding the market to include films and anime's two-dimensional space, and also shape Sanqi Mutual Entertainment's game company's market cultural industry chain in music, VR technology, and various entertainment businesses including live streaming.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, whose industry chain initially did not involve gaming or other entertainment industry operations. There was always a risk of being swallowed by the market, but relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. However, with poor operations and a shrinking market in the later stages, Sanqi Mutual Entertainment eventually did not escape the fate of acquisition.
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 an opportunity worth seizing for development. The two companies completed asset restructurings of various industries through multi-party cooperation. Worth mentioning is that the strategy always operated by Sanqi Mutual Entertainment had begun to show its edge at this time. Sanqi Mutual Entertainment Company transformed from being a single modern cultural creative company before the acquisition to a dual-main business listed company now operating both advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operation strategy also underwent changes, with the business scope covered by the former cultural and creative industries.
