This Lord is Very Scientific-Chapter 759 - 691

(Content protection, will be released later.) Abstract: With the advancement of technology and the widespread coverage of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The methods of disseminating games no longer adhere to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, gaming companies need to continually integrate resources, innovate, and iterate to enhance performance as they keep pace with the rapid development of the times. A diversification strategy perfectly aligns with the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy is the preferred development model for companies, which also applies to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to illustrate the impact of diversification strategy on gaming company performance.

Keywords: Diversification Strategy; Gaming Company; Performance; Impact; Sanqi Mutual Entertainment Company

A diversification strategy is a market strategy that enterprises adopt in their operational processes to occupy and explore new markets, as well as to avoid risks encountered when operating a single business. It is a strategic planning approach for targeted and prepared entry into new business areas. The practical application of a diversification strategy to gaming companies can effectively improve company performance, bringing about a transformation from quantitative to qualitative change in the development of gaming companies.

1. Macro Background of Diversification Strategy

Entering 2021, under the strong control of the pandemic by the state, people's lives have returned to normalcy, and the economy and culture are showing a great trend of 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 pre-pandemic level[1]. This is a very favorable message for the gaming industry, which occupies a significant proportion of the cultural industry. Although the arrival of the pandemic did not greatly affect the gaming industry, the inability to conduct offline activities still impacted the performance of gaming companies. The revitalization of the cultural industry means that the great development and prosperity of the cultural industry can drive more gaming companies to embark on a path of sustainable development[2].

From the outbreak of the pandemic last year to the current stability of the situation, the state has promulgated relevant policies to support the development of the cultural industry in multiple aspects, including finance, institutions, and finance. Although the pandemic has hindered people's travel, it cannot control the spread speed of online networks. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention period. However, due to companies' eagerness to enter the online market, the competitive environment within the cultural industry has become very fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. However, in this short span of two years, many successfully transformed cultural industries have emerged, most of which relied on the diversification strategy model to accelerate transformation and upgrading. They also reaped substantial benefits during the pandemic prevention period when consumer spending levels increased significantly, gaining more diverse development models and income channels. For example, the transformation undertaken by Sanqi Mutual Entertainment during the pandemic prevention period is worth emulating for most gaming companies[3].

2. Brief Analysis and Classification of Diversification Strategy

(1) Brief Analysis of Diversification Strategy

Igor Ansoff, the pioneer of strategic management, proposed the diversification strategy. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This strategy model, which has influenced the world, has been involved in management policies across many countries, so much so that today every enterprise, big or small, is seeking a place by following the development model of diversification strategy[4].

(2) Classification and Meaning of Diversification Strategy

Diversification strategy is classified into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different models derived from the diversification strategy have different meanings. Horizontal diversification refers to companies using the original conditions provided by the market to produce new products that satisfy new user needs, thereby driving market consumption. Vertical integration is when a company, according to its development situation, derivates vertically and penetrates other market fields with its product industry chain to seek new consumers. Concentric diversification focuses more on the innovation of existing technologies, requiring the production of new products within the original production scope, achieving this process through the transformation of existing technologies. Conglomerate diversification pays more attention to the expansion of the business scope; enterprises need to expand their business scope by linking themselves with related raw materials, technologies, markets, and other factors[5].

3. Impact of Diversification Strategy on Gaming Company Performance

In the operational processes of all gaming companies, the impact of diversification strategy on gaming company performance can be primarily divided into two parts: changes in the operational model and shifts in strategic planning. The effects arising from these two changes gradually drive the improvement of company performance. The impact of diversification strategy is multifaceted, and this paper will take Sanqi Mutual Entertainment Game Company as an example to analyze the impact of diversification strategy on gaming company performance[6].

The completion of the asset restructuring of various industries through multi-party collaboration is noteworthy. Sanqi Mutual Entertainment's operational strategy, traditionally maintained, has now... 𝘧𝘳𝘦ℯ𝓌𝘦𝒷𝘯𝑜𝑣𝘦𝓁.𝒸𝘰𝓂

(1) Changes in the Operational Model

At present, Sanqi Mutual Entertainment Game Company's main operational scope is very extensive, which is an advantage brought by the diversification strategy. The company not only engages in interactive entertainment operations but also exclusively handles the development and distribution of mobile and web games under Sanqi Mutual Entertainment Game Company. In recent developments, it has continuously innovated in line with contemporary technology and expanded the market to cover films, anime, and the secondary dimensions. It is also shaping Sanqi Mutual Entertainment Game Company's cultural industry chain in music, VR technology, and various live entertainment businesses.

Founded in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth path in its early development. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of gaming and other entertainment industries and always faced the risk of being swallowed by the market. However, relying on the steady development of its single industry, Sanqi Mutual Entertainment Company went public in 2011. Nevertheless, due to poor operations and market contraction in the later stages, 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, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed the asset restructuring of various industries through multi-party collaboration, and it is worth noting that Sanqi Mutual Entertainment's operational strategy, traditionally maintained...