This Lord is Very Scientific-Chapter 742 - 674

(Anti-theft, will be sent later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the recent rise of the gaming industry is evident to the public. The dissemination of games is no longer confined to the rigid promotional models, and the influence of games has gradually extended to various aspects of life. Correspondingly, gaming companies also need to continuously integrate resources, innovate, and iterate to improve performance in line 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 mode of enterprise development, is also applicable to gaming companies. This paper illustrates the impact of the diversification strategy on the performance of gaming companies, using Sanqi Mutual Entertainment Company as an example.

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

Diversification strategy is a market strategy means adopted by enterprises during operations to occupy more new markets and explore new markets. It is also a strategic plan used by enterprises to enter new business fields with targeted preparation to avoid risks encountered during operations of a single business. The practical application of diversification strategies in gaming companies can effectively improve company performance and bring about a transformative process from quantitative change to qualitative change for the development of gaming companies.

1. The macro background of the diversification strategy

Entering 2021, under the effective control of the pandemic by the state, people's lives are back on track, and both the economy and culture show a favorable 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 advantageous news for the gaming industry, which occupies a significant proportion of the cultural industry. Although the pandemic's arrival did not greatly affect the gaming industry, the inability to conduct offline activities still impacts the performance of gaming companies. The warming of the cultural industry implies that for most gaming companies, the great development and prosperity of the cultural industry can promote and drive more gaming companies towards sustainable development [2].

From last year's outbreak to the current stabilization, the state has introduced relevant policies to support cultural industry development from fiscal, institutional, financial, and other perspectives. Although the pandemic has blocked people's travel, it cannot control the speed of online network dissemination. More and more new media are emerging, driving the development of the cultural industry during the pandemic prevention and control period. However, as various enterprises strive to enter the online market, the competitive environment within the cultural industry is very fierce. Many traditional offline enterprises succumbed to the pandemic's impact and were eliminated by society. Nonetheless, many cultural industries successfully transformed during these two short years, relying mainly on diversification strategy models to accelerate transformation and upgrading. During the pandemic control period, when resident consumption levels increased significantly, they also reaped considerable rewards, achieving more diversified development models and income channels. For example, the transformation made by Sanqi Mutual Entertainment during pandemic control is worth learning from for most gaming companies [3].

2. Brief analysis and classification of the diversification strategy

(1) Brief analysis of the diversification strategy 𝒻𝘳ℯℯ𝑤ℯ𝒷𝘯ℴ𝓋ℯ𝘭.𝑐ℴ𝑚

Diversification strategy was proposed by the founding father of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of the diversification strategy. This strategy model, which has influenced the world, is involved in the management policies of multiple countries, so today, every company, big and small, seeks a place by following the development model of the diversification strategy [4].

(2) Classification and meaning of the 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 market-provided original conditions to produce new products that meet new user demands, thereby driving market consumption. Vertical integration is when enterprises derive vertically based on their development status, penetrating other market fields using the product's industry chain to seek new consumers. Concentric diversification focuses more on innovation of existing technologies, and requires new product production within the existing production range, achieving transformation through the metamorphosis of existing technologies. Conglomerate diversification emphasizes expanding the range of operations; enterprises need to connect raw materials, technologies, and market factors related to their products to expand the domain of operation [5].

3. The impact of the diversification strategy on the performance of gaming companies

In the operation process of all gaming companies, the impact of diversification strategy on performance is universally divided into two parts: changes in the operation model and shifts in strategic planning. The changes in these two parts gradually produce effects that drive the improvement of company performance. The influences brought by the diversification strategy are multi-faceted. This paper will analyze and study the impact of diversification strategies on gaming company performance, taking the Sanqi Mutual Entertainment Game Company as an example [6].

(1) Changes in the operation model

Currently, the main operating range of Sanqi Mutual Entertainment Game Company is very broad, which is a benefit brought by the diversification strategy. The company not only engages in the operation of interactive entertainment, but it also undertakes the R&D and distribution of mobile games and web games. In recent years, it keeps innovating in line with the era's technology, expanding the market into film and anime otaku culture, while also creating a market cultural industry chain for Sanqi Mutual Entertainment Game Company in music, VR technology, and various streaming entertainment businesses.

Sanqi Mutual Entertainment Game Company was founded in 1995. But in the early stages of development, the journey was not smooth sailing. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the company's industry chain did not involve the operation of gaming and other entertainment industries, always at risk of being swallowed by the market. However, with the steady development of a single industry, the Sanqi Mutual Entertainment Company was listed in 2011. Nevertheless, due to poor late-stage operations and market tightening, Sanqi Mutual Entertainment could not 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. Although it was nominally acquired, it was a development opportunity worth seizing for Sanqi Mutual Entertainment. With multifaceted collaboration, the two companies completed the asset restructuring of various industries. It is worth mentioning that the strategic plan continuously operated by Sanqi Mutual Entertainment began to show its potential at this time. The company transformed from a single modern cultural creative company before the acquisition to a dual-core listed company parallel in advanced manufacturing and modern cultural creativity, corresponding with changes in Sanqi Mutual Entertainment Company's corporate operational strategy. The scope of business originally covered by the cultural creative industry.