This Lord is Very Scientific-Chapter 726 - 658
(Anti-theft, to be sent later.) Abstract: With the advancement of technology and the coverage of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The dissemination of games is no longer restricted to rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, gaming companies need to constantly integrate resources, innovate, and improve performance in line with the fast development of the times. A diversification strategy aligns with the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, a diversification strategy, as the primary mode of corporate development, is also applicable to gaming companies. This paper uses Sanqi Mutual Entertainment Company as an example to explain the impact of a diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company
The diversification strategy is a market strategic means used by enterprises to occupy new markets and explore new markets during the operation process. It is also a strategic plan that enterprises employ to avoid the risks encountered in operating a single business by targeting and preparing to enter new business fields. Applying a diversification strategy to gaming companies can effectively improve company performance, bringing about a process of transformation from quantitative to qualitative changes in the development of gaming companies.
1. Macro Background of Diversification Strategy
Entering 2021, with the country effectively controlling the pandemic, people's lives are back on track, and economic culture shows a good trend of recovery. On April 30, 2021, according to the relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to the pre-pandemic level[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 significantly impact the gaming industry, the inability to conduct offline activities has always affected the performance of gaming companies. The recovery of the cultural industry means that for most gaming companies, the great development and prosperity of the cultural industry can promote more gaming companies to embark on a sustainable development path[2].
From the outbreak of the pandemic last year to the current stability of the pandemic, the state has issued relevant policies to support the development of the cultural industry in terms of finance, institutions, and finance, among others. Although the pandemic has halted people's travel, it cannot control the speed of online network dissemination. More and more new media have emerged, driving the development of the cultural industry during the pandemic control period. However, since various companies want to squeeze into the online market, the competitive environment within the cultural industry is very intense. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. However, in just these two years, many successful transitions in the cultural industry have emerged, and most of these companies have relied on a diversification strategy model to accelerate transformation and upgrading, reaping considerable benefits during the pandemic control period, with significantly improved consumer spending levels, obtaining more diversified development models and revenue channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic control period 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 Igor Ansoff, the founding father of strategic management. In his book "What is Corporate Strategy", he mentioned the classification of diversification strategy. This world-influencing strategic model is involved in the management policy of many countries, so that today, enterprises of all sizes are seeking a place according to the development model of diversification strategy[4]. 𝒻𝓇𝑒𝘦𝘸𝑒𝒷𝓃ℴ𝑣𝘦𝑙.𝒸ℴ𝘮
(2) Classification and Meaning of Diversification Strategy
The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes derived from the diversification strategy have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new user needs, thus driving market consumption. Vertical integration is for enterprises to leverage their development situation to penetrate other market fields and seek new consumption objects; concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production range, achieving this through the transformation of existing technology; conglomerate diversification focuses more on expanding the scope of operations, requiring enterprises to contact raw materials, technology, markets, and other factors related to their products to expand the scope of operations[5].
3. Impact of Diversification Strategy on Gaming Company Performance
It can be said that in the operation process of all gaming companies, the impact of a diversification strategy on gaming company performance is uniformly divided into two parts: changes in the operation mode and the shift in strategic planning. The changes in these two parts gradually generate effects that drive the improvement of company performance. The impact brought by diversification strategy is multifaceted. This paper will analyze the impact of diversification strategy on gaming company performance using the example of Sanqi Mutual Entertainment Game Company[6].
(1) Change in the Operation Mode
Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is extensive, which is also the advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but also Sanqi Mutual Entertainment Game Company undertakes the development and distribution of mobile and web games, and in recent years, it keeps innovating by keeping up with the times and technology. It broadens the market to include layout in film and television and anime two-dimensional space, and also shapes its market cultural industry chain in music and 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 smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, initially not involved in the operation of games and other entertainment industries within its industrial chain, always at risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. But with poor operations and market contraction in the later stages, Sanqi Mutual Entertainment still did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% equity stake. Although it was acquired in name, for Sanqi Mutual Entertainment, this was an opportunity for development worth seizing. Under the multi-party collaboration of the two companies, they completed the asset restructuring of various industries. It is worth mentioning that the strategy operated by Sanqi Mutual Entertainment has already shown initial success, with the company transforming from a single modern cultural and creative company prior to the acquisition to a listed company with dual main businesses of advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operation strategy is also undergoing changes, previously covered by the scope of the cultural creative industry.
