This Lord is Very Scientific-Chapter 806 - 738

(Anti-theft, will be posted later.) Abstract: Along with technological advancements and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to all citizens. The method of game dissemination is no longer restricted to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continually integrate resources, innovate, update, and improve performance in accordance with the rapid development of the times. Diversification strategy perfectly caters to the planning needs and development goals within the gaming industry. Under the backdrop of economic globalization, diversification strategy, as a preferred mode for corporate development, is equally 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 Company

Diversification strategy is a market strategy employed by enterprises during operations to occupy new markets and explore new markets more extensively. It is also a strategic planning adopted by enterprises to avoid the risks encountered during operations in a single business, entering a new business field with targeting and preparation. The practical application of diversification strategy in game companies can effectively improve company performance, bringing about a process of quantitative change to qualitative change in the development of game companies.

1. Macroeconomic background of diversification strategy

Entering 2021, under the strong control of the pandemic by the state, people's lives have returned to normal, and the economy and culture demonstrate a promising recovery. On April 30, 2021, according to relevant data published by the National Bureau of Statistics, cultural industry development nationwide basically returned to pre-pandemic levels [1]. This is very favorable news for the gaming industry, which occupies a significant part of the cultural industry. Although the pandemic did not greatly affect the gaming industry, the inability to conduct offline activities continuously impacted the performance of game companies. With the warming of the cultural industry, for most game companies, this signifies that the great development and prosperity of the cultural industry can promote more game companies to embark on a path of sustainable development [2].

From last year's outbreak of the pandemic to the current stabilization, the state has issued relevant policies supporting the development of the cultural industry from multiple aspects such as finance, systems, and finance. Although the pandemic has hindered people's travel, it cannot control the transmission speed of online networks. More and more new media have emerged, driving cultural industry development during pandemic prevention and control period. However, the competitive environment between cultural industries is extremely fierce as various enterprises aim to enter the online market, and many traditional offline businesses have been eliminated by society due to the impact of the pandemic. But in this short span of two years, many cultural industries succeeded in transforming, with most of these enterprises speeding up transformation and upgrades through diversification strategy models, reaping rich rewards during the pandemic prevention and control period when consumer levels significantly improved, acquiring more diverse development modes and revenue channels, such as the transformation of Sanqi Mutual Entertainment Company during the pandemic is worth learning by most game companies [3].

2. Brief analysis and classification of diversification strategy

(I) Brief analysis of diversification strategy

Diversification strategy was proposed by the ancestor of strategic management, Igor Ansoff, in his book "Corporate Strategy." It mentions the classification of diversification strategy. This world-influencing strategy mode is involved in the management policy of multiple countries, so that today every enterprise, big or small, seeks positions according to the development model of diversification strategy [4].

(II) Classification and meaning of diversification strategy

Diversification strategy is categorized into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of these four distinct modes derived from diversification strategy also vary. Horizontal diversification means enterprises use the conditions provided by the market to produce new products meeting new user needs, thereby driving market consumption; Vertical integration means enterprises vertically derive based on their development situation, penetrating into other markets using product industry chains; Conglomerate diversification prefers expanding the variation in business scope, enterprises need to consider factors related to raw materials, technology, and market associated with their products to expand the scope of operations [5].

3. The impact of diversification strategy on game company performance

In the operational processes of all game companies, diversification strategy impacts game company performance divided into two parts: changes in operational modes and shifts in strategic planning. From the changes in these two parts gradually produces effects that drive the improvement of company performance. The impact of diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as an example [6].

(1) Change in operational mode

Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is very broad, which benefits from the advantages brought by diversification strategy. In addition to interactive entertainment operations, Sanqi Mutual Entertainment Game Company also fully undertakes the research, development, and distribution of mobile games and web games. In recent years of development, it continuously innovates by keeping pace with the times, expanding the market to the layout of film and animation and the ACG sector, and shaping its market cultural industry chain of Sanqi Mutual Entertainment Game Company in music and VR technology and various live streaming and other pan-entertainment businesses.

Established in 1995, Sanqi Mutual Entertainment Game Company did not have an entirely smooth path in early development. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise, at first, not involved in game and entertainment industry operations within Sanqi Mutual Entertainment's industrial chain, with the constant risk of being swallowed by the market. However, by relying on the steady development of a single industry, the Sanqi Mutual Entertainment Company went public in 2011. But with subsequent poor operations and market contraction, Sanqi Mutual Entertainment ultimately could not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% stake. Although nominally acquired, this was a grasp-worthy development opportunity for Sanqi Mutual Entertainment. The two companies completed asset restructuring of various industries under multi-disciplinary cooperation. It is worth mentioning that the exhibition strategy operated by Sanqi Mutual Entertainment has already shown initial results. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before acquisition to the present day with dual main listed companies alongside advanced production manufacturing and modern cultural creativity. Correspondingly, the company operation strategy of Sanqi Mutual Entertainment is also changing, originally covered business scope of cultural creative industries. In 2014, the business scope covered by cultural creative industries of Wuhu Shunrong Auto Parts Co., Ltd.