This Lord is Very Scientific-Chapter 803 - 735

(To be updated for anti-theft purposes.) 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 mode of game dissemination is no longer confined to rigid promotional methods, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies must integrate resources continuously, innovate and iterate, and improve performance to keep up with the fast-paced development of the times. A diversification strategy perfectly aligns with the planning needs and development goals within the gaming industry. Amidst the backdrop of economic globalization, diversification strategy serves as a prime development mode applicable to game companies. This paper uses Sanqi Mutual Entertainment Company as an example to elucidate the effect of diversification strategy on the performance of game companies. 𝒇𝒓𝙚𝒆𝔀𝓮𝓫𝒏𝓸𝙫𝓮𝓵.𝓬𝙤𝙢

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

Diversification strategy is a market strategy method adopted by enterprises in the course of operations to capture and develop new markets more extensively. It is also a strategic plan that enterprises utilize to avoid risks encountered during the operation of a singular business by entering new business fields purposefully and with preparation. Applying diversification strategy effectively in game companies can significantly improve company performance, bringing about a transformation from quantitative to qualitative change in the development of game companies.

1. Macro Background of Diversification Strategy

Entering 2021, with the country's effective control over the pandemic, people's lives have resumed normalcy, presenting a promising recovery scenario for the economic and cultural aspects. On April 30, 2021, related data released by the National Bureau of Statistics indicated that the development of the national cultural industry had basically returned to pre-pandemic levels[1]. This is exceptionally favorable news for the gaming industry, which constitutes a significant proportion of the cultural industry. Although the outbreak of the pandemic did not noticeably impact the game industry, the inability to conduct offline activities nonetheless affected the performance of game companies. The warm recovery of the cultural industry signifies a great expansion and prosperity of the cultural industry, which can foster and drive many game companies to tread the path of sustainable development[2].

Since the outbreak of the pandemic last year to the present stable state of the pandemic, the country has promulgated relevant policies to support the development of the cultural industry in aspects such as finance, institutions, and finance. While the pandemic has hindered people's movements, it could not contain the spread speed of online networks. Increasingly more new media have emerged, spurring the development of the cultural industry during the pandemic control period. However, the competition environment within the cultural industry is intensely competitive due to every enterprise aspiring to penetrate the online market. Many traditional offline enterprises couldn't withstand the impacts of the pandemic and were thus eliminated by society. Yet, these short two years also witnessed the emergence of many successfully transformed cultural industries that predominantly accelerated their transformation and upgrade through a diversification strategy and also reaped considerably due to the significantly improved consumption levels of residents during pandemic control periods, obtaining more diversified development models and income channels. For instance, the transformation undertaken by Sanqi Mutual Entertainment during the pandemic control period merits emulation by numerous game companies[3].

2. Brief Analysis and Classification of Diversification Strategy

(a) Brief Analysis of Diversification Strategy

Diversification strategy was proposed by Igor Ansoff, the father of strategic management, in his book "Corporate Strategy: An Analytic Approach to Business Policy for Growth and Expansion," wherein he mentioned the categorization of diversification strategy. This globally influential strategic model has been involved in management policy guidelines in multiple countries, causing every enterprise, regardless of size, to seek a foothold in accordance with the development model of diversification strategy[4].

(b) Classification and Meaning of Diversification Strategy

There are four types of diversification strategy: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings derived from these four distinct models of diversification strategy also differ. 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 where enterprises derive vertically based on their development condition, penetrate into other market fields using product industry chains to seek new consumption targets; Concentric diversification places more emphasis on innovation of existing technology, requiring the production of new products within the existing production scope, achieving it through the metamorphosis of existing technology; While conglomerate diversification emphasizes changes in expanding the scope of operation, requiring enterprises to connect factors related to their products such as raw materials, technology, and market, to expand their scope of operation[5].

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

One could argue that in the operational processes of all game companies, the influence of diversification strategy on the performance of game companies can be uniformly divided into two parts: the change of operation mode and the transition of strategic planning. From these two parts, the transformation gradually generates effects, propelling the performance improvement of companies. The impact brought by 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 the performance of game companies[6].

(1) Change of Operation Mode

Currently, the primary operational scope of Sanqi Mutual Entertainment Game Company is exceptionally broad, deriving advantages from the diversification strategy. The company's business not only involves the operation of interactive entertainment but also wholly undertakes the development and release of mobile games and web games under Sanqi Mutual Entertainment Game Company. Moreover, in recent development, the company keeps pace with the times and technological advancements, continuously innovates, and expands the market layout into film, anime second-dimension, as well as in music and VR technology, and various live broadcast and other pan-entertainment businesses, forging a market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company.

The Sanqi Mutual Entertainment Game Company was established in 1995, but its initial development path was not smooth. The precursor of Sanqi Mutual Entertainment Game Company was a small enterprise, with its industrial chain not initially involving the operation of games and other entertainment industries, making it susceptible to market takeover. However, with the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Nonetheless, accompanying subsequent poor management and market constrictions, Sanqi Mutual Entertainment eventually couldn't escape acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% equity. Though nominally acquired, it posed a development opportunity worth seizing for Sanqi Mutual Entertainment. Both companies completed the asset restructuring of various industries through multi-cooperation. It is noteworthy that the strategic exhibit that Sanqi Mutual Entertainment had been operating was beginning to demonstrate its edge by then. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creative company before the acquisition to a dual-main-business listed company now concurrently engaging in advanced production manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment has also undergone changes, altering the previously encompassed business scope of the cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. initially covered the scope of the cultural creative industry.