This Lord is Very Scientific-Chapter 736 - 668
(Anti-theft, posting it later.) Abstract: With the advancement of technology and the widespread coverage of smart networks, the rise of the gaming industry in recent years is evident to the public. The methods of game dissemination are no longer confined to rigid promotional models, and the influence of games has gradually expanded to every aspect of life. Correspondingly, gaming companies need to continuously integrate resources, innovate, and update to improve performance amid the rapid development of the times. Diversification strategy perfectly aligns with the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, diversification strategy, as the preferred mode for business development, is equally applicable to gaming companies. This paper uses Sanqi Mutual Entertainment Company as an example to elucidate the impact of diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; gaming companies; performance; impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy employed by businesses during operations to conquer new markets and explore them further. It is also a strategic plan used to evade risks encountered while operating a single business by targeted and prepared entry into new business fields. Applying diversification strategy in gaming companies can effectively enhance company performance, bringing about a transformation process in the company's development from quantitative to qualitative changes.
1. Macro Background of Diversification Strategy
Entering 2021, with the strong control of the pandemic by the state, people's lives resumed normalcy, and the economy and culture showcased a promising recovery scenario. On April 30, 2021, data released by the National Bureau of Statistics indicated that the national cultural industry development had largely recovered to pre-pandemic levels [1]. This news is particularly advantageous for the gaming industry, which holds significant weight within the cultural sector. Although the arrival of the pandemic did not heavily impact the gaming industry, the inability to conduct offline activities consistently affected the performance of gaming companies. With the warming up of the cultural industry, for most gaming companies, this symbolizes that the great development and prosperity of the cultural industry can propel 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 state promulgated relevant policies from various aspects, like finance, system, and financial supports, to foster cultural industry development. Although the pandemic hindered people's movements, it could not control the speed of online network spreading. The emergence of ever-increasing new media promoted the development of the cultural industry during the pandemic control period. However, due to multiple enterprises vying to enter the online market, the competitive landscape within the cultural industry became intensely fierce. Many traditional offline enterprises couldn't withstand the pandemic impact and were eliminated from society, yet numerous culturally transformative industries successfully emerged within this short two-year period. Most of these enterprises relied on diversification strategy mode to accelerate transformation and upgrade, which garnered rich rewards during the pandemic prevention period where consumer levels significantly improved, acquiring diverse development modes and income channels. For instance, the transformation undertaken by Sanqi Mutual Entertainment during the pandemic control period is worth emulating by many gaming companies [3]. 𝘧𝘳𝘦ℯ𝓌𝘦𝒷𝘯𝑜𝑣𝘦𝓁.𝒸𝘰𝓂
2. Brief Analysis and Classification of Diversification Strategy
(a) 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 globally influential strategic model finds references in management policy guidelines across multiple countries, leading today to every enterprise, big or small, seeking a foothold in line with diversification strategy development models [4].
(b) Classification and Implications of Diversification Strategy
There are four types of diversification strategies: horizontal diversification, vertical integration, concentric diversification, and comprehensive diversification. The four modes derived from the diversification strategy each carry distinct implications. Horizontal diversification refers to enterprises leveraging original conditions provided by the market to produce new products meeting new user demands, thereby driving market consumption. Vertical integration involves enterprises deriving vertically based on their development conditions, penetrating other market areas to seek new consumer bases. Concentric diversification focuses more on technological innovation within the existing production scope, realizing the entire process via the transformation of existing technology. Comprehensive diversification emphasizes expanding range changes, requiring enterprises to link factors related to their products, such as raw materials, technology, and markets, to expand the business scope [5].
3. Impact of Diversification Strategy on Gaming Companies' Performance
It can be said that during the operation process of all gaming companies, the impact of diversification strategy on gaming company performance is unified into two parts: changes in operation modes and strategic planning transfers. The transformation from these two parts gradually produces effects that drive the enhancement of company performance. Diversification strategy brings multi-faceted impacts, and this paper will analyze and study the impact of diversification strategy on gaming company performance with Sanqi Mutual Entertainment Game Company as the example [6].
(1) Changes in Operation Modes
Currently, Sanqi Mutual Entertainment Game Company's main operation scope is quite extensive. This is also due to the advantages brought by the diversification strategy. The company's business not only involves interactive entertainment operations but also extensively covers the development and distribution of mobile games and web games. Furthermore, in recent years, it has consistently innovated following technological advancements, expanding its market presence in film and anime subculture layout. It also establishes the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company within music, VR technology, and various live entertainment business domains.
Sanqi Mutual Entertainment Game Company was founded in 1995. However, the early development path was not smooth sailing. Initially, the predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and the entertainment industry like game operations was not within its industrial chain. There was always a risk of being merged by the market. However, relying on stable development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Yet, in spite of stable initial development and market contraction later, Sanqi Mutual Entertainment eventually couldn't escape the fate of acquisition.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Despite being nominally acquired, this represented a vital development opportunity for Sanqi Mutual Entertainment. The two companies completed asset restructuring of various industries through comprehensive collaboration. It's worth mentioning that the strategic exhibition managed by Sanqi Mutual Entertainment at that time had already begun to show its edge. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creative company before acquisition to a listed company with parallel advanced manufacturing and modern cultural creativity dual-core businesses. Correspondingly, the company's operation strategies underwent changes, expanding the business scope initially covered by the cultural creative industry.
