This Lord is Very Scientific-Chapter 773 - 705

(Anti-theft, to be published later.) 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 dissemination methods of games are no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate and iterate, and improve performance to keep pace with the rapid development of the era. The diversification strategy precisely meets the planning needs and development goals within the game industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred model for corporate development, is also applicable to game companies. This paper explains the impact of diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Company as an example.

Keywords: diversification strategy; game company; performance; impact; Sanqi Mutual Entertainment

The diversification strategy is a market strategy adopted by companies during operations to occupy and expand new markets further, and it is also a strategic plan for companies to avoid risks encountered in operating a single business by entering new business fields with preparation and focus. Applying the diversification strategy to game companies can effectively improve company performance and bring about a qualitative change in the development of game companies.

1. The macro background of the diversification strategy

Entering 2021, under the strong control of the pandemic by the nation, people's lives have returned to normal, and the economy and culture show a great recovery trend. On April 30, 2021, data released by the National Bureau of Statistics showed that the development of the cultural industry nationwide has basically returned to the pre-pandemic level[1]. This is extremely favorable news for the game industry, which occupies a large proportion of the cultural industry. Although the advent of the pandemic did not significantly affect the game industry, the inability to conduct offline activities always affected the performance of game companies. With the revival of the cultural industry, for most game companies, this means that the great development and prosperity of the cultural industry can promote and drive 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 nation has promulgated relevant policies in finance, systems, and other aspects to support the development of the cultural industry. 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 control period. However, due to various enterprises trying to enter the online market, the competitive environment within the cultural industry is extremely fierce. Many traditional offline enterprises could not withstand the pandemic's impact and were eliminated by society, but in this short span of two years, many cultural industries successfully transformed. Most of these enterprises accelerated their transformation and upgrading relying on a diversification strategy model, and during the pandemic control period, when residents' consumption levels improved significantly, they also reaped substantial benefits, acquiring more diverse development models and income channels. For instance, the transformation made by Sanqi Mutual Entertainment during the pandemic control period is worth emulating by most game companies[3].

2. Brief analysis and classification of the diversification strategy

(1) Brief analysis of the diversification strategy

The 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 world-influencing strategic model has been involved in management policies and guidelines in multiple countries, to the point where every enterprise, big or small, is seeking a foothold following the development model of a diversification strategy[4].

(2) Classification and meaning of diversification strategies

Diversification strategies are divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different modes derived from the diversification strategy have various meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user needs, thereby driving market consumption. Vertical integration is when enterprises, based on their development status, vertically derive and infiltrate the product industry chain into other market fields to seek new consumer targets. Concentric diversification focuses more on the innovation of existing technology, requiring new product production within the existing production range, and the whole process is realized through the transformation of existing technology. Overall diversification emphasizes the expansion of business range changes, where enterprises need to expand their business range by contacting raw materials, technology, and market factors related to their products[5].

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

In the operation process of all game companies, the influence of diversification strategies on their performance can be uniformly divided into two parts: changes in operational models and shifts in strategic planning. The effects gradually generated from these two parts drive the company's performance improvement. The impact of diversification strategy is multifaceted, and this paper will analyze the effect of diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Game Company as an example[6].

(1) Changes in operational models

At present, the primary operation range of Sanqi Mutual Entertainment Game Company is very extensive, which is also due to the advantages brought by the diversification strategy. The company's business not only involves interactive entertainment operations, but Sanqi Mutual Entertainment Game Company is also fully responsible for the development and distribution of mobile games and web games. Moreover, in its recent development, it continuously innovates following the progress of this era, expanding the market layout to film and animation in the secondary dimension, and creating a market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company within music, VR technology, and various live broadcasts and other pan-entertainment businesses.

Sanqi Mutual Entertainment Game Company was established in 1995, but the early development road was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, which initially did not involve the operation of game and other entertainment industries in its industrial chain and was always at risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company got listed in 2011. However, with the subsequent poor operations and market tightening, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd., and although it was acquired nominally, for Sanqi Mutual Entertainment, it was an opportunity worth seizing for development. The two companies completed various industry asset restructurings through multi-party collaboration. It is worth mentioning that the expansion strategy, which Sanqi Mutual Entertainment had always operated, already showed potential at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-main industries listed company of advanced manufacturing and modern cultural creative coexisting, corresponding to the changes in the company's operational strategy. The previous scope of business covered by the cultural and creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd.'s previous business covered by the cultural and creative industry.