This Lord is Very Scientific-Chapter 746 - 678

(Anti-theft, to be sent later.) Abstract: With the progress of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to the citizens. The dissemination methods of games are no longer limited to rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Consequently, gaming companies also need to continuously integrate resources, innovate, and 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. Under the backdrop of economic globalization, the diversification strategy, as the preferred model for enterprise development, is also applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of gaming companies.

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

Diversification strategy is a market strategy approach adopted by enterprises in their operational processes to occupy and open new markets. It is also a strategic planning employed by enterprises to avoid the risks encountered in operating a single business by intentionally and preparedly entering new business fields. Applying the diversification strategy to gaming companies can effectively improve company performance, bringing about a transformation from quantitative to qualitative changes for the development of gaming companies.

1. The Macro Background of Diversification Strategy

Entering 2021, with the effective control of the epidemic by the state, people's lives have returned to normal, and the economic and cultural sectors are showing a promising trend of recovery. On April 30, 2021, according to data released by the National Bureau of Statistics, the national cultural industry development has basically returned to the pre-epidemic level [1]. This is very favorable news for the gaming industry, which occupies a significant portion of the cultural industry. Although the onset of the epidemic did not greatly affect the gaming industry, the inability to conduct offline activities has always impacted the performance of gaming companies. The warming of the cultural industry implies that the great development and prosperity of the cultural industry can promote and drive more gaming companies onto a path of sustained development [2].

From the outbreak of the epidemic last year to its current stabilization, the state has issued relevant policies from multiple aspects such as finance, system, and finance to support the development of the cultural industry. Although the epidemic 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 epidemic prevention and control period. However, due to the eagerness of various enterprises to enter the online market, the competitive environment within the cultural industry is very intense. Many traditional offline enterprises cannot withstand the impact of the epidemic and are eliminated by society. Yet, in these short two years, many cultural industries have successfully transformed, and most of these companies relied on the diversification strategy model to accelerate transformation and upgrading. In addition, they also gained significantly in the prevention and control period of the epidemic, which saw a significant increase in residents' consumption levels. They obtained more diversified development modes and income channels. For example, the transformation of Sanqi Mutual Entertainment during the epidemic prevention and control period is worth learning from for most gaming companies [3].

2. Brief Analysis and Classification of Diversification Strategy

(1) Brief Analysis of Diversification Strategy

Diversification strategy was proposed by the father of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This globally influential strategic model is involved in management policy guidelines in many countries. Consequently, every enterprise, large or small, is seeking to establish a foothold following the development model of diversification strategies [4].

(2) Classification of Diversification Strategies and Their Meanings

There are four types of diversification strategies: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four derived modes of diversification strategies also have different meanings. Horizontal diversification refers to enterprises using the primary conditions provided by the market to produce new products that can meet new user needs, thereby driving market consumption. Vertical integration is when enterprises deduce vertically based on their own development situation, utilizing the product industry chain to penetrate other market fields to seek new consumer targets. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production range, and the entire process is realized through the transformation of existing technology. Conglomerate diversification pays more attention to expanding the range of operations, needing the enterprise to consider raw materials, technology, and market factors related to their own products to expand the scope of operations [5].

3. The Impact of Diversification Strategy on the Performance of Gaming Companies

It can be said that during the operational processes of all gaming companies, the impact of diversification strategy on company performance is uniformly divided into two parts: the change of operational mode and the shift of strategic planning. The effects gradually generated from these two parts drive the improvement of company performance. The influence 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 gaming company performance [6].

(1) Change in Operational Mode

Currently, the main operational range of Sanqi Mutual Entertainment Game Company is quite extensive. This is also an advantage brought by the diversification strategy. The company's business involves not only the operation of interactive entertainment but also the research and distribution of mobile games and web games handled solely by the Sanqi Mutual Entertainment Game Company. In recent years, the company has continuously innovated in line with the times' technology, expanding the market to include layout in film, television, and animation ACG. It is also shaping the market cultural industry chain of Sanqi Mutual Entertainment Game Company in music, VR technology, and various live streaming and other pan-entertainment businesses.

Sanqi Mutual Entertainment Game Company was established in 1995, but the initial development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small-sized enterprise, which initially did not involve the operation of games and other entertainment industries in its industrial chain, and was at risk of being swallowed by the market at any time. However, relying on stable development in a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, with poor operations and market contraction in later periods, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, it was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed asset restructuring of various industries through multi-faceted collaboration. It is worth mentioning that the strategy consistently operated by Sanqi Mutual Entertainment was beginning to emerge. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before the acquisition into a dual main industry listed company combining advanced production manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment also underwent changes. The business scope previously covered by the cultural creativity industry was transformed. In 2014, the cultural creativity industry initially covered by the business scope of Wuhu Shunrong Auto Parts Co., Ltd.