This Lord is Very Scientific-Chapter 725 - 657

(Anti-theft, will be released in due course.) Abstract: With the advancement of technology and the coverage model of smart networks, the rise of the gaming industry in recent years has been evident to the public. The dissemination of games is no longer restricted to rigid promotional models, and the influence of games is gradually expanding to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, and enhance performance along with the rapid development of the times. The diversification strategy precisely caters to the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred model for business development, is also applicable to gaming companies. This article explains the impact of the diversification strategy on the performance of gaming companies using the case of Sanqi Mutual Entertainment Company as an example.

Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company

A diversification strategy is a market strategic tool that a company employs during its operations to occupy new markets and explore new markets and to avoid the risks encountered when operating a single business by strategically and preparedly entering new business fields. Applying a diversification strategy to gaming companies can effectively improve company performance and bring about a transformation from quantitative to qualitative changes for the development of gaming companies.

1. The Macro Background of Diversification Strategy

Entering 2021, with the country's effective control of the pandemic, people's lives are back on track, and the economy and culture are showing a good recovery trend. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry had basically returned to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the pandemic did not greatly impact the gaming industry, the inability to conduct offline activities has consistently affected game companies' performance. With the warming of the cultural industry, this means 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 the outbreak of the pandemic last year to the current stabilization, the country has issued relevant policies supporting the development of the cultural industry from multiple aspects such as finance, systems, and finance. Although the pandemic blocked people's movements, 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 various companies rushed to enter the online market, the competitive environment within the cultural industry became very fierce. Many traditional offline enterprises were eliminated by society due to the impact of the pandemic, but over the brief two years, many successfully transformed cultural industries emerged. Most of these companies relied on the diversification strategy model to accelerate transformation and upgrading, and they also reaped substantial benefits in terms of diversified development models and income channels during the pandemic prevention period when residents' consumption levels significantly improved, such as the transformation undertaken by Sanqi Mutual Entertainment during the pandemic prevention period, which is worth emulating by most gaming companies[3].

2. Brief Analysis and Classification of Diversification Strategy

(1) Brief Analysis of Diversification Strategy

The diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff, in his book "Corporate Strategy". This globally influential strategy model is involved in the management policy of various countries, so much so that today every large and small enterprise is seeking a foothold according to the development model of the diversification strategy[4].

(2) Classification and Meaning of Diversification Strategy

The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and comprehensive diversification. The four different modes derived from the diversification strategy also have different meanings. Horizontal diversification refers to a company producing new products that can meet users' new demands using the original conditions provided by the market, thereby driving market consumption; vertical integration refers to a company seeking new consumers by penetrating the product industry chain into other market fields based on its own development situation; concentric diversification focuses more on the innovation of existing technology and requires the production of new products within the existing production scope, realizing it through the transformation of existing technology; comprehensive diversification emphasizes expanding the operational scope, requiring a company to expand its operational range by linking raw materials, technology, market, and other factors related to its products[5].

3. The Impact of Diversification Strategy on the Performance of Gaming Companies

It can be said that in the operation processes of all gaming companies, the impact of diversification strategy on gaming companies' performance is divided into two parts: the change in operational mode and the shift in strategic planning. From these two parts of the reform, an effect gradually emerges, driving the company's performance enhancement. The impact brought by the diversification strategy is multifaceted. This paper will analyze and research the impact of the diversification strategy on gaming companies' performance using the Sanqi Mutual Entertainment Game Company as an example[6].

(1) Change in Operational Mode

Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is also an advantage brought by the diversification strategy. The company's business not only involves operating interactive entertainment but also exclusively handles the development and publication of mobile and web games under Sanqi Mutual Entertainment Game Company. In recent years, following the technological advancement of the times, continuous innovation has been carried out, expanding the market to include films, animation, and two-dimensional enterprises. It is also shaping its own market cultural industry chain in music and VR technology and various live broadcast and pan-entertainment businesses.

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, and initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries, always facing the risk of being swallowed by the market. However, by relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011, but with poor subsequent operations and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% stake. Although the acquisition was nominal, for Sanqi Mutual Entertainment, it was an opportunity worth seizing. The two companies completed asset restructuring of various industries through multi-faceted cooperation. It is worth mentioning that the strategy that Sanqi Mutual Entertainment Company has been operating has already begun to show its capability at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-main business listed company synchronizing advanced manufacturing with modern cultural creativity. Correspondingly, the operating strategy of Sanqi Mutual Entertainment Company is also undergoing changes, along with the scope of business covered by the original cultural creative industry.