This Lord is Very Scientific-Chapter 777 - 709

(Anti-theft, to 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 is evident to the public. The distribution method of games is 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 to improve performance in line with the rapid development of the times. Diversification strategy precisely meets the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategy as the preferred model for enterprise development is equally applicable to game 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 means adopted by enterprises in the operation process to occupy new markets and expand into new markets more extensively. It is also a strategic planning approach used to avoid the risks encountered in operating a single business and to enter new business fields in a targeted and prepared manner. Applying diversification strategy to game companies can effectively improve company performance, bringing about a process of change from quantity to quality in the development of gaming companies.

1. The Macroeconomic Background of Diversification Strategy

Entering 2021, under the effective control of the pandemic by the state, people's lives have returned to normal, and the economic culture also shows a promising recovery trend. On April 30, 2021, data released by the National Bureau of Statistics indicated that the development of the national cultural industry had basically returned to the pre-pandemic level [1]. This is very favorable news for the gaming industry, which occupies a large proportion in the cultural industry. Although the arrival of the pandemic did not significantly impact the gaming industry, the inability to conduct offline activities has always affected the performance of gaming companies. With the rebound of the cultural industry, for most gaming companies, this implies that the great development and prosperity of the cultural industry can promote more gaming companies to embark on a path of sustainable development [2].

From last year's outbreak of the pandemic to its current stabilization, the state has introduced relevant policies from financial, institutional, and financial aspects to support the development of the cultural industry. Although the pandemic 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 pandemic prevention and control period. However, as enterprises all want to enter the online market, the competitive environment among cultural industries is very fierce. Many traditional offline enterprises have been eliminated by society under the influence of the pandemic. Yet, in these short two years, many cultural industries that have successfully transformed have emerged. These enterprises mostly rely on diversification strategy models to accelerate transformation and upgrading, and during the pandemic prevention and control period, when residents' consumption levels have significantly increased, they have also harvested rich rewards, gaining more diversified development models and funding income channels. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic 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 Igor Ansoff, the pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is involved in the management guideline policies of many countries, so much so that today every big and small enterprise is seeking a place according to the development model of diversification strategy [4].

(2) Classification and Meaning of Diversification Strategy

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different model meanings derived from diversification strategy are also different. Horizontal diversification refers to producing new products that can meet users' new demands using the original conditions provided by the market to drive market consumption. Vertical integration is when an enterprise, based on its development situation, vertically derives and uses the product industry chain to penetrate other market fields to seek new consumers. Concentric diversification focuses more on innovation on existing technology, requiring the production of new products within the existing production range, with the entire process achieving transformation through existing technology. Conglomerate diversification focuses more on extending the scope of operation. Enterprises need to expand their business scope by connecting with factors such as raw materials, technology, and markets related to their products [5].

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

It can be said that in the operation process of all gaming companies, the impact of diversification strategy on gaming companies' performance is uniformly divided into two parts: the change of operation mode and the shift of strategic planning. These two parts of the reform gradually produce effects that drive the improvement of company performance. The impact of 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 companies' performance [6].

(1) Change in Operation Mode

Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is very broad, relying on the advantages brought by diversification strategy. The company's business not only involves the operation of interactive entertainment but also covers the research and publishing of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years of development, it has continuously innovated by closely following the technology of the times, expanding the market to layout film and animation ACG, as well as shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain in music, VR technology, and various live streaming and other pan-entertainment businesses.

Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise. At first, Sanqi Mutual Entertainment's industrial chain did not involve the operation of games and other entertainment industries, constantly at risk of being swallowed up by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company got listed in 2011. Still, accompanying poor operation and market tightening in the later stage, Sanqi Mutual Entertainment did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% equity stake. Although it was officially acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth grasping. The two companies completed the asset restructuring of various industries under multi-party cooperation. It's worth mentioning that the strategic plan operated by Sanqi Mutual Entertainment at this time was already showing its edge. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before acquisition to the current dual-main business listed company of advanced production manufacturing and modern cultural creativity. Correspondingly, the operational strategy of Sanqi Mutual Entertainment also changed, and the business scope previously covered by the cultural creative industry remained as 2014 Wuhu Shunrong Auto Parts Co., Ltd., initially covered by the cultural creative industry.