This Lord is Very Scientific-Chapter 804 - 736

(Anti-theft, release later.) Summary: With the advancement of technology and the coverage pattern of smart networks, the rise of the gaming industry in recent years is evident to the public. The spread of games is no longer confined to rigid promotional methods, and the influence of games is gradually extending to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, update, and improve performance as they keep pace with the rapid development of the times. A diversification strategy precisely meets the planning needs and development goals within the gaming industry. Under the background of economic globalization, a diversification strategy as the preferred mode for enterprise development is equally applicable to gaming companies. This article explains the impact of diversification strategy on the performance of gaming companies, using Sanqi Mutual Entertainment Company as an example.

Keywords: Diversification strategy; gaming companies; performance; impact; Sanqi Mutual Entertainment Company

Diversification strategy is a market strategic approach taken by enterprises during operations to capture more new markets and expand existing ones. It is also a strategic plan that enterprises adopt to avoid risks encountered while operating a single business and to enter new business fields with targeted preparations. Applying the diversification strategy to a gaming company can effectively enhance company performance, bringing about a transition from quantitative change to qualitative change in the company's development.

1. Macroscopic Background of Diversification Strategy

Entering 2021, with the effective control of the pandemic by the country, people's lives have returned to normal, and the economic culture is showing a major recovery trend. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically recovered to the pre-pandemic level [1]. This is particularly beneficial news for the gaming industry, which occupies a significant portion of the cultural industry. Although the arrival of the pandemic did not cause significant impacts to the gaming industry, the inability to conduct offline activities has always affected the performance of gaming companies. The warming up of the cultural industry means that for most gaming companies, it can promote and drive more gaming companies to embark on the path of sustainable development [2].

From last year's outbreak of the pandemic to the current stabilization of the pandemic, the country has implemented relevant policies to support cultural industry development from multiple aspects such as finance, systems, and finance. Although the pandemic has hindered people's ability to travel, it cannot control the spreading speed of online networks. The emergence of more and more new media has driven the development of the cultural industry during pandemic prevention and control periods. However, as each company wants to squeeze into the online market, the competitive environment within the cultural industry is very intense. Many traditional offline enterprises at this time could not withstand the pandemic's impact and were eliminated by society, but in these short two years, many successfully transformed cultural industries have emerged. These enterprises mostly relied on diversification strategy models to accelerate transformation and upgrade, amassing considerable gains in diversified development models and revenue channels during periods of increased consumer spending during pandemic prevention and control. For example, the transition made by Sanqi Mutual Entertainment Company during pandemic prevention and control is worthy of reference by most gaming companies [3].

2. Simple Analysis and Classification of Diversification Strategy

(a) Simple Analysis of Diversification Strategy

Diversification strategy was proposed by Igor Ansoff, the founding father of strategic management. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is involved in the management principles and policies of multiple countries. As a result, today every enterprise, big or small, seeks a place according to the development model of the diversification strategy [4].

(b) Classification and Meaning of Diversification Strategy

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 different meanings. Horizontal diversification refers to enterprises using the initial conditions provided by the market to produce new products that meet users' new demands, thereby driving market consumption. Vertical integration refers to enterprises deriving vertically according to their development circumstances, utilizing product industry chains to penetrate into other market fields and seek new consumption targets. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the original production scope, with the entire process achieved through the transformation of existing technology. Overall diversification emphasizes expanding the scope of business changes, requiring enterprises to link factors such as raw materials and technology related to products and markets to expand their business scope [5].

3. Impact of Diversification Strategy on Gaming Companies' Performance

It can be said that in the operations of all gaming companies, the impact of diversification strategy on gaming companies' performance is uniformly divided into two parts: changes in operational modes and shifts in strategic planning. From these two changes gradually emerge effects that enhance company performance. The impact brought about 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 gaming companies' performance [6].

(1) Changes in Operational Mode 𝗳𝐫𝚎𝗲𝚠𝚎𝗯𝕟𝐨𝘃𝚎𝗹.𝗰𝗼𝗺

As of now, the main operations of Sanqi Mutual Entertainment Game Company are very extensive, which is also relying on the advantages brought by diversification strategy. The company's business not only involves the operation of interactive entertainment, but it also undertakes the research and distribution of mobile games and web games. In recent years of development, by keeping up with technological advancements, the company has continuously innovated, expanding the market layout to include film and television and the secondary anime sector. It is also shaping the market cultural industry chain of Sanqi Mutual Entertainment Game Company across music and VR technology, as well as various live entertainment fields.

Founded in 1995, Sanqi Mutual Entertainment Game Company initially did not have a smooth development path. The former self of Sanqi Mutual Entertainment Game Company was a small enterprise, initially not involving the operation of gaming and other entertainment industries in its industry chain, constantly at risk of being swallowed by the market. However, relying on steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Yet, with subsequent unsatisfactory operations and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was an opportunity worth seizing for development. Through multi-party collaboration, the two companies completed asset restructuring of various industries. It is worth mentioning that the operational strategy that Sanqi Mutual Entertainment had been running began to show its prowess. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to the present two-major listed company with advanced production and modern cultural creative industries running concurrently. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment was undergoing changes. The business scope previously covered by cultural creative industries. In 2014, Wuhu Shunrong Auto Parts Co., Ltd. previously covered by cultural creative industries.

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