This Lord is Very Scientific-Chapter 720 - 652
(Anti-theft, will be published later.) Abstract: Accompanied by technological advancement and intelligent network coverage, the rise of the gaming industry in recent years has been witnessed by the public. The dissemination of games is no longer restricted to rigid promotional models, and the influence of games has gradually extended to all aspects of life. Correspondingly, gaming companies also need to continually integrate resources, innovate, and enhance performance in tandem with the rapid development of the times. The 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 model for enterprise development also applies 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 strategy means adopted by enterprises during the operation process to capture more new markets and develop new markets. It is also a strategic plan adopted by enterprises to avoid the risks encountered in operating a single business, by purposefully and preparedly entering new business fields. Applying the diversification strategy practically to gaming companies can effectively enhance company performance, bringing a process of transformation from quantitative change to qualitative change in their growth.
1. The Macroeconomic Background of Diversification Strategy
Entering 2021, under the strong control of the pandemic by the state, people's lives have gotten back on track, and the economic and cultural sectors are showing a promising 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 returned to pre-pandemic levels [1]. This is extremely beneficial news for the gaming industry, which occupies a significant part of the cultural industry. Although the arrival of the pandemic did not severely impact the gaming industry, the inability to conduct offline activities continually affected the performance of gaming companies. Through the warming-up of the cultural industry, for most gaming companies, this signifies that the great development and prosperity of the cultural industry can promote and bring more gaming companies onto a path of sustainable development [2].
From last year's outbreak of the pandemic to the current stabilization, the country has issued policies in various aspects such as finance, regulations, and finance to support the development of the cultural industry. Although the pandemic has impeded people's ability to travel, it cannot control the rapid spread of online networks. More and more new media have emerged, driving the development of the cultural industry during pandemic prevention and control. However, as various companies strive to enter the online market, the competitive environment within the cultural industry has become extremely fierce. Many traditional offline companies could not withstand the impact of the pandemic and were eliminated by society. But within these short two years, many cultural industries have successfully transformed. These companies mostly relied on the diversification strategy model to accelerate transformation and upgrading, and gained substantially during the pandemic prevention period with significantly enhanced consumer levels, acquiring more diverse development models and revenue channels. For instance, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth emulating by most gaming companies [3].
2. Overview and Classification of Diversification Strategy
(a) Overview of Diversification Strategy
Diversification strategy was proposed by the forefather of strategic management, Igor Ansoff. In his book "Corporate Strategy", he mentioned the classification of diversification strategy. This world-influencing strategic model is involved in management guidelines and policies in multiple countries, so much so that today every large and small enterprise is vying for 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 models derived from the diversification strategy have varying meanings. Horizontal diversification refers to enterprises producing new products that meet new user needs using the original conditions provided by the market to drive market consumption. Vertical integration is enterprises longitudinally deriving based on their own development situation, penetrating other market fields using the product industrial chain to seek new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production scope, realizing the whole process through the metamorphosis of existing technology. Conglomerate diversification emphasizes expansion of the operating scope, requiring enterprises to expand their business scope based on factors related to their own products such as raw materials, technology, and markets [5].
3. Impact of Diversification Strategy on the Performance of Gaming Companies
It is fair to say that in the operation process of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: changes in the operation model and shifts in strategic planning. The effects gradually generated from these two parts drive the enhancement of company performance. The impact of the diversification strategy is multi-faceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on the performance of gaming companies [6].
(1) Changes in Operation Model
Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is quite extensive, which relies on the advantages brought by diversification strategy. The company's business not only involves interactive entertainment operations but also fully manages the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years, the company has closely followed the technological trends of the times and continually innovated, expanding the market layout into films, anime, and secondary dimensions. It also shapes its own market cultural industry chain in various pan-entertainment businesses such as music, VR technology, and various live broadcasts.
Founded in 1995, Sanqi Mutual Entertainment Game Company's initial development journey was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, Sanqi Mutual Entertainment's industrial chain did not involve game and other entertainment industry operations, always having the risk of being absorbed by the market. However, with the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. But with later operational problems and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired sixty percent equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, it was an opportunity worth seizing. With multifaceted collaboration, the two companies completed asset restructuring of various industries. It's worth mentioning that the strategic operation that Sanqi Mutual Entertainment has run has already begun to show prominence. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired into the current dual-main-business listed company of advanced production manufacturing and modern cultural creativity running parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment is also undergoing changes, originally covering business areas of the cultural creative industry.
