This Lord is Very Scientific-Chapter 750 - 682

(Anti-theft, will be released later.) 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 nation. The dissemination of games is no longer confined to rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and upgrade to enhance performance in line with the rapid development of the era. Diversification strategy perfectly caters to the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, diversification strategy as the preferred development mode for enterprises is equally applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on game company performance.

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

Diversification strategy is a market strategic tool adopted by enterprises during their operations to capture more new markets and expand into new markets. It is also a strategic plan used by enterprises to avoid risks encountered in operating a single business by purposefully and preparedly entering new business fields. Applying diversification strategy to game companies can effectively improve company performance and bring about a process of transformation from quantitative change to qualitative change in the development of game companies. 𝒻𝓇𝑒𝘦𝘸𝑒𝒷𝓃ℴ𝑣𝘦𝑙.𝒸ℴ𝘮

1. The macro background of diversification strategy

Stepping into 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economic and cultural scenes are exhibiting a great recovery. On April 30, 2021, data released by the National Bureau of Statistics showed that the nationwide cultural industry development has basically returned to pre-pandemic levels [1]. This is very favorable news for the gaming industry, which holds a large share of the cultural industry. Although the pandemic did not cause severe impacts on the gaming industry, the inability to conduct offline activities has always affected the performance of game companies. The recovery of the cultural industry means that the grand development and prosperity of the cultural industry can promote and drive more game companies to embark on a path of sustainable development [2].

From last year's outbreak of the pandemic to the current stability, the state has issued relevant policies from various aspects such as finance, systems, and finance to support the development of the cultural industry. Although the pandemic hindered people's travel, it could not control the speed of online network dissemination. More and more new media have emerged, driving the development of the cultural industry during the pandemic control period. However, due to each enterprise wanting to compete in the online market, the competitive environment within the cultural industry has become very fierce. Numerous traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. But in this short two-year period, many successfully transformed cultural industries have emerged, and these enterprises mostly relied on the acceleration of transformation and upgrading through diversification strategy. During the pandemic control period, where residents' consumption levels significantly increased, they also gained substantial returns, acquiring more diversified development modes and revenue channels. For example, the transformation Sanqi Mutual Entertainment Company undertook during the pandemic control period is worth emulating for most game companies [3].

2. Brief analysis and classification of diversification strategy

(1) Brief analysis of diversification strategy

Diversification strategy was proposed by Igor Ansoff, the pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic mode is involved in the management guidelines and policies of several countries, resulting in every enterprise, big or small, seeking a place according to the development mode of diversification strategy today [4].

(2) Classification and its meaning of diversification strategy

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different modes derived from diversification strategy have distinct meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new customer demands, thus driving market consumption. Vertical integration is when companies derive vertically based on their development situation, permeating other market fields with their product industry chain to seek new consumer objects. Concentric diversification places more emphasis on the innovation of existing technology, requiring the production of new products within the existing production scope. The entire process is realized through the transformation of existing technology. Overall diversification focuses more on expanding the scope of operation and requires enterprises to expand their business scope by connecting with the raw materials, technology, and market factors related to their products [5].

3. The impact of diversification strategy on game company performance

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 operation mode and shifts in strategic planning. The changes in these two parts gradually generate effects that drive the enhancement of company performance. The impact brought about by diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as an example [6].

(1) Changes in the operation mode

Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very extensive, which also relies on the advantages brought by diversification strategy. The company's business not only involves interactive entertainment operations, but Sanqi Mutual Entertainment Game Company is also solely responsible for the research and distribution of mobile games and web games. In recent developments, it constantly innovates in line with era technology, expanding the market to cover film and television, and anime's second dimension. It is also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various pan-entertainment businesses such as live streaming.

Established in 1995, the development path of Sanqi Mutual Entertainment Game Company was not smooth initially. Its predecessor was a small enterprise, and the initial industrial chain of Sanqi Mutual Entertainment did not involve the operation of game and other entertainment industries, always facing the risk of being merged into the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. But with subsequent poor operations and market contraction, Sanqi Mutual Entertainment did not ultimately 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, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. Through multi-party collaboration, the two companies completed the asset restructuring of various industries. It is worth mentioning that the strategy that Sanqi Mutual Entertainment had been operating began to show its splendor at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural and creative company before acquisition to a dual-main business listed company with advanced production manufacturing and modern cultural creativity in parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment was also undergoing changes, within the business scope covered by the cultural and creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. first included the business scope covered by the cultural and creative industry.