This Lord is Very Scientific-Chapter 745 - 677

(Anti-theft, to be released at the time.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years has been evident to the public. The spread of games is no longer confined to rigid promotional methods, and the influence of games has gradually extended to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and improve performance in line with the rapid development of the times. A diversification strategy precisely caters to the planning needs and development goals within the game industry. Against the backdrop of economic globalization, diversification strategy, as a preferred mode of enterprise development, is also applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of game companies.

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

Diversification strategy is a market strategic approach that enterprises adopt in the process of operation to gain more new markets and develop new markets. It is also a strategic planning adopted by enterprises to avoid risks encountered in operating a single business and to target and prepare to enter new business fields. The practical application of diversification strategy in game companies can effectively improve company performance, bringing a process of quantitative to qualitative change to the development of game companies.

1. Macro background of diversification strategy

Entering 2021, with the effective control of the pandemic by the country, people's lives are back on track, and the economy and culture are showing a good trend of revival. 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 favorable news for the game industry, which occupies a large proportion of the cultural industry. Although the pandemic did not significantly impact the game industry, the inability to conduct offline activities has always affected the performance of game companies. With the warming of the cultural industry, this means for most game companies that the great development and prosperity of the cultural industry can promote more game companies to embark on a path of sustainable development [2].

From the outbreak of the pandemic last year to the current stabilization of the pandemic, the country has issued relevant policies from multiple areas such as finance, institutions, and banking to support the development of the cultural industry. While the pandemic has blocked people's travel, it has not controlled the speed of spreading online networks. The emergence of more and more new media has driven the development of the cultural industry during the pandemic prevention and control period. However, because every enterprise wants to squeeze into the online market, the competitive environment between cultural industries is very fierce. Many traditional offline enterprises could not withstand the pandemic's impact and were eliminated by society at this time. In these short two years, many cultural industries have also successfully transformed. These enterprises mainly rely on the diversification strategy model to accelerate transformation and upgrade, also reaping considerable rewards and gaining more diversified development models and funding channels during the pandemic prevention and control period, when the residents' consumption level significantly increased. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period is worth referencing by most game companies [3].

2. Brief analysis and classification of diversification strategy

(a) Brief analysis of diversification strategy

Diversification strategy was proposed by the founder of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is involved in the management guidelines and policies of multiple countries, so much so that today every small and large enterprise seeks a place according to the development model of diversification strategy [4].

(b) Classification of diversification strategy and its meanings

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and total diversification. The four different modes derived from the diversification strategy also have different meanings. Horizontal diversification refers to the enterprise using the original conditions provided by the market to produce new products that meet the new needs of users, thereby driving market consumption. Vertical integration is when an enterprise derives from its development situation vertically, penetrating into other market fields to seek new consumer objects through the product industry chain. Concentric diversification emphasizes more on the innovation of existing technology, requiring the production of new products within the existing production range, with the entire process realized through the transformation of existing technology. Total diversification places more emphasis on expanding the scope of operation changes, requiring enterprises to relate to factors such as raw materials and technology related to their products and markets to expand the scope of operation [5].

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

It can be said that in the operation process of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in the operation mode and the shift in strategic planning. From these two parts of change, effects gradually occur, driving the company's performance improvement. The impact brought by the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on the performance of game companies [6].

(1) Changes in the operation mode

Currently, the main operating scope 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 Sanqi Mutual Entertainment Game Company also single-handedly manages the development and publication of mobile and web games. In recent years, following the technology of the times, they have continuously innovated, broadening the market to include film and anime, and shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various types of live entertainment business.

Sanqi Mutual Entertainment Game Company was founded in 1995, but the development path in the early stages was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and at first, Sanqi's industrial chain did not involve the operation of games and other entertainment industries, always at risk of being swallowed by the market. However, thanks to the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. But with the later mismanagement and market contraction, 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 sixty percent equity. Although acquired in name, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed the asset restructuring of various industries through multi-party cooperation. It is worth mentioning that the strategy always operated by Sanqi Mutual Entertainment showed initial prominence at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before the acquisition to a dual-main business listed company now concurrent with advanced production manufacturing and modern cultural creativity, corresponding to which Sanqi Mutual Entertainment's company operational strategy also underwent changes, as well as the business scope covered by the original cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. first cultural creative industry covered business scope.