This Lord is Very Scientific-Chapter 751 - 683

(To prevent unauthorized use, it will be published in due course.) Abstract: With the advancement of technology and the widespread coverage of intelligent networks, the emergence of the game industry in recent years has been evident to the public. The way games are disseminated is no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Consequently, game companies must continuously integrate resources, innovate, and improve performance to keep pace with rapid development. The diversification strategy precisely meets the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as a preferred model for enterprise development, is equally applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to illustrate the impact of the diversification strategy on the performance of game companies.

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

The diversification strategy is a market strategy means adopted by enterprises in their operations to capture new markets and expand into new markets. It is also a strategic plan that companies use to avoid the risks encountered in operating a single business and to enter new business fields in a targeted and prepared manner. By practically applying the diversification strategy to game companies, it can effectively enhance company performance and bring about a qualitative change in the company's development.

1. The Macroeconomic Background of the Diversification Strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economy and culture are showing a vibrant 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 the level prior to the pandemic[1]. This is extremely favorable news for the gaming industry, which holds a significant portion of the cultural industry. Although the arrival of the pandemic did not greatly impact the game industry, the inability to conduct offline activities has always affected the performance of game companies. The revival of the cultural industry implies that the large-scale development and prosperity of the cultural industry can lead more game companies onto a path of sustainable development[2].

From last year's outbreak of the pandemic to the current stabilization, the government has introduced relevant policies from various aspects, such as finance, regulations, and finance, to support the development of the cultural industry. Although the pandemic hindered people's travels, it could not control the speed of online dissemination. More and more new media appeared, driving the development of the cultural industry during the pandemic prevention period. However, since all companies wanted to enter the online market, the competitive environment among the cultural industries became very intense. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. But within these short two years, many successfully transformed cultural industries emerged. Most of these companies accelerated transformation and upgrading by relying on the diversification strategy model. During the pandemic prevention, as residents' consumption levels significantly increased, they also gained substantial rewards, obtaining more diversified development models and funding income channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth emulating by most game companies[3].

2. Brief Analysis and Classification of the Diversification Strategy

(a) Brief Analysis of the Diversification Strategy

The diversification strategy was proposed by Igor Ansoff, the founder of strategic management. In his book "Corporate Strategy," he mentioned the classification of the diversification strategy. This world-influencing strategic model has been covered in the management guidelines and policies of several countries, so much so that today every enterprise, big or small, seeks to establish its position through diversification strategy development models[4].

(b) 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 also have varying meanings. Horizontal diversification refers to the enterprise producing new products that meet new user demands using original market conditions, thus driving market consumption. Vertical integration is when an enterprise, depending on its development situation, vertically extends using the product industry chain to penetrate other market fields to seek new consumer targets. Concentric diversification emphasizes the innovation of existing technologies and requires manufacturing new products within the existing production scope. The entire process is realized through the transformation of existing technologies. Conglomerate diversification focuses more on expanding the scope of business changes. Enterprises need to connect with factors related to their products, such as raw materials, technology, and markets, to expand their scope of business[5].

3. Impact of the Diversification Strategy on the Performance of Game Companies

It can be said that during the operation of all game companies, the impact of the diversification strategy on the performance of game companies is uniformly divided into two parts: changes in the operating model and shifts in strategic planning. From the evolution of these two parts, effects gradually emerge, driving the improvement of company performance. The impact brought by the diversification strategy is multifaceted. This paper analyzes and researches the impact of the diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as an example[6].

(1) Changes in the Operating Model

Currently, the main operational range of Sanqi Mutual Entertainment Game Company is extensive, which is an advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also fully undertakes the development and publishing of mobile games and web games. In recent developments, by keeping up with contemporary technology and continuously innovating, they have expanded the market to include film and anime, and they are shaping a market cultural industry chain that belongs to Sanqi Mutual Entertainment Game Company in fields like music, VR technology, and various live broadcasts and pan-entertainment businesses.

Established in 1995, Sanqi Mutual Entertainment Game Company's journey was not smooth in its early development. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise that initially did not involve the operation of entertainment industries like games in its industrial chain, constantly facing the risk of being swallowed up by the market. However, through the steady development of a singular industry, Sanqi Mutual Entertainment Company went public in 2011. Yet, with poor operations and market contractions in the later stages, Sanqi Mutual Entertainment ultimately could 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 it was an acquisition in name, for Sanqi Mutual Entertainment, it marked a developmental opportunity worth grasping. The two companies completed an asset restructuring of various industries through mutual cooperation. Notably, the strategy continuously operated by Sanqi Mutual Entertainment began to show initial signs of success at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company to its current form, encompassing the business scope of the cultural creative industry alongside the auto parts shareholding company.