This Lord is Very Scientific-Chapter 737 - 669
(Anti-theft, to be published in due course.) Abstract: With the advancement of technology and the coverage model of intelligent 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 has gradually expanded to all aspects of life. Correspondingly, gaming companies also need to continuously integrate resources, innovate, and improve performance as the era rapidly evolves. A diversification strategy perfectly 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 enterprise development, is equally applicable to gaming companies. This article 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 companies; performance; impact; Sanqi Mutual Entertainment Company
A diversification strategy is a market strategy means adopted by enterprises during operation to capture more new markets and expand new markets. It is also a strategic plan that enterprises use to avoid risks encountered during the operation of a single business by entering new business fields with preparation and targeting. Effectively applying a diversification strategy to gaming companies can improve company performance and bring about a qualitative change in the company's development process.
1. The macro background of the diversification strategy 𝘧𝑟𝑒𝑒𝘸𝘦𝘣𝑛𝑜𝘷𝑒𝓁.𝘤𝘰𝓂
Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economic culture has presented a positive situation of recovery. 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 very good news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the arrival of the pandemic did not significantly affect the gaming industry, the inability to conduct offline activities consistently impacted the performance of gaming companies. The warming of the cultural industry means, for most gaming companies, that the great development and prosperity of the cultural industry can promote and lead more gaming companies onto the path of sustainable development [2].
From the outbreak of the pandemic last year to the current stability, the state has issued related policies from multiple aspects such as finance, regulations, and finance to support the development of the cultural industry. Although the pandemic has hindered 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 prevention period. However, due to the intense competition environment between cultural industries as every company wants to squeeze into the online market, many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. However, in these short two years, many successful transformations in the cultural industry have also emerged. Most of these companies relied on the diversification strategy mode to speed up transformation and upgrading, and they also gained substantial benefits with more diversified development modes and revenue channels during the pandemic prevention period when residents' consumption levels significantly increased. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth learning from for 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 father of strategic management. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategies. This globally influential strategic model is involved in the management guidelines and policies of multiple countries, leading to every large and small enterprise today seeking a place according to the developmental mode 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 conglomerate diversification. The four different modes derived from the diversification strategy also have different meanings. Horizontal diversification refers to enterprises producing new products that meet new user needs using the primary conditions provided by the market, thereby driving market consumption; vertical integration is when enterprises vertically derive new business fields based on their development, using the product industry chain to penetrate other market areas to seek new consumers; concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production range, implementing the entire process through the transformation of existing technology; conglomerate diversification focuses more on expanding operational range changes, requiring enterprises to expand the operational range by relating to factors such as raw materials, technology, and markets related to their products [5].
3. The impact of diversification strategy on the performance of gaming companies
It can be said that in the operations of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: changes in operational models and shifts in strategic planning. The effects gradually produced by these two transformative parts drive the improvement of company performance. The impact brought by diversification strategy is multifaceted. This paper will use 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 the operational model
Currently, the primary operational range of Sanqi Mutual Entertainment Game Company is quite 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 fully handles the research and development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. Moreover, it has continuously innovated by keeping up with the times and technology in recent years, expanding the market to include layout in films and animation subcultures, and shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain in music, VR technology, and various pan-entertainment businesses such as live streaming.
Founded in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth path in its early development. The predecessor of Sanqi Mutual Entertainment Game Company was a small-scale enterprise, and the industry's initial chain did not involve the operation of game and other entertainment industries, carrying the risk of being annexed by the market at any time. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company listed in 2011. Yet, accompanying poor later-stage operations and market contraction, Sanqi Mutual Entertainment did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% stake in Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. Through multi-party collaboration, both companies completed asset restructuring in various industries. It is worth mentioning that Sanqi Mutual Entertainment's operations strategy, which had been in play all along, was beginning to show its edge. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-main-business listed company running advanced manufacturing and modern cultural creativity in parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment also underwent changes, affecting the range of business covered by the originally cultural creative industry.
