This Lord is Very Scientific-Chapter 786 - 718

(Anti-theft, to be released in due course.) Abstract: With technological advancements and the coverage of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The mode of spreading games is no longer confined to rigid promotional methods, and the influence of games is gradually expanding into all aspects of life. Correspondingly, game companies need to continually integrate resources, innovate and update in this era of rapid development, to improve performance. A diversification strategy precisely meets the planning needs and development goals within the gaming industry. Under the backdrop of economic globalization, a diversification strategy, as the preferred model for corporate development, is also applicable to game companies. This article explains the impact of diversification strategies on the performance of game companies using the example of Sanqi Mutual Entertainment Company.

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

The diversification strategy is a market strategic measure that enterprises adopt in the process of operation to occupy and explore new markets more effectively. It is also a strategic plan for companies to avoid the risks encountered in operating a single business and to enter new business areas in a targeted and prepared manner. Applying a diversification strategy effectively in a game company can significantly improve the company's performance, bringing about a transformation from quantitative change to qualitative change in the company's development.

1. Macroscopic Background of Diversification Strategy

Stepping into 2021, with the effective control of the epidemic by the state, people's lives have returned to normal, and the economy and culture are showing a great trend of recovery. On April 30, 2021, according to the relevant data released by the National Bureau of Statistics, the overall development of the cultural industry in the country had basically returned to the level before the epidemic[1]. This is very favorable news for the gaming industry, which occupies a large portion of the cultural industry. Although the epidemic did not have a major impact on the gaming industry, the inability to hold offline activities always affects the performance of game companies. The recovery of the cultural industry means the great development and prosperity of the industry, which can promote more game companies onto the path of sustainable development for most game companies[2].

From the outbreak of the epidemic last year to the current stability, the state has issued relevant policies from several aspects such as finance, systems, and finance to support the development of the cultural industry. Although the epidemic hindered people's travel, it could not control the speed of online network transmission. More and more new media emerged, driving the development of the cultural industry during the epidemic prevention and control period. However, since each company wants to squeeze into the online market, the competitive environment within the cultural industry has become intense. Many traditional offline enterprises could not withstand the epidemic's impact and were eliminated by society. But during these short two years, many successfully transformed cultural industries have emerged, and most of these enterprises rely on the diversification strategy model to accelerate transformation and upgrading. They have gained rich benefits during the epidemic prevention and control period when the consumption levels of residents increased significantly, obtaining more diversified development models and funding income channels, for example, the transformation made by Sanqi Mutual Entertainment during the epidemic prevention and control period is worth emulating by most game companies[3].

2. Brief Analysis and Classification of Diversification Strategy

(a) Brief Analysis of 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 the management guidelines and policies of many countries, so much so that today, every company, big or small, seeks a place according to the development model of a diversification strategy[4].

(b) Classification and Meaning of Diversification Strategy

There are four types of diversification strategies: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four distinct modes derived from the diversification strategy each have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user needs, thus driving market consumption. Vertical integration is when an enterprise longitudinally derives according to its development situation, using the product industry chain to penetrate other market areas to seek new consumer targets. Concentric diversification focuses more on the innovation of existing technologies, needing the production of new products within the original production range. The entire process is achieved through the transformation of existing technologies. Conglomerate diversification emphasizes the expansion of the operational scope changes, requiring enterprises to consider factors like raw materials, technology, and markets related to their products for operational scope expansion[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 strategies on game company performance is uniformly divided into two parts: changes in the operation model and strategic planning shifts. From these two parts changes gradually produce effects that promote the company's performance improvement. The impact brought by the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze the impact of the diversification strategy on game company performance[6].

(1) Changes in the Operation Model

Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is the advantage brought by the diversification strategy. The company not only involves in the operation of interactive entertainment, but also wholly undertakes the research, development, and distribution of mobile and web games under Sanqi Mutual Entertainment Game Company. Moreover, in recent developments, the company constantly innovates following the era's technology, expanding the market to include film, animation, ACG culture, as well as shaping the market culture industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live streaming and other pan-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 industrial chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries and always faced the risk of being swallowed by the market. However, through the stable development of a single industry, Sanqi Mutual Entertainment Company became listed in 2011, but with poor later operations and market shrinkage, 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 it was acquired nominally, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. With the cooperation of many parties, the two companies completed the asset restructuring of various industries. It's worth noting that the strategy that Sanqi Mutual Entertainment has been operating is now beginning to show promise. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before being acquired to a dual-main listed company with both advanced manufacturing and modern cultural creativity running parallel. Correspondingly, the company's operational strategy is also changing, along with the scope of business covered by the original cultural creativity industry.