This Lord is Very Scientific-Chapter 822 - 754:

(Anti-theft, will be posted later.) Abstract: With technological progress and the coverage mode of intelligent networks, the game industry's rise in recent years is evident to the nation. The dissemination of games has moved beyond rigid promotional modes, and their influence gradually extends to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, and improve performance amidst the fast-paced development of the era. A diversification strategy perfectly aligns with the planning needs and development goals within the game industry. In the context of economic globalization, the diversification strategy, as the preferred development mode for enterprises, is also applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to illustrate the impact of diversification strategy on game company performance.

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

Diversification strategy is a market strategy adopted by enterprises during their operations to occupy and explore new markets more effectively. It also serves as a strategic planning means to avoid risks encountered in single business operations by targeting and preparing for entry into new business fields. The practical application of diversification strategy to game companies can effectively enhance company performance, bringing about a transformation from quantitative to qualitative changes in their development.

1. Macroeconomic Background of Diversification Strategy

Entering 2021, under the country's effective control of the pandemic, people's lives returned to normal, and the economic culture showed a good recovery trend. On April 30, 2021, related data released by the National Bureau of Statistics indicated that the development of the national cultural industry had fundamentally returned to pre-pandemic levels[1]. This is very favorable news for the game industry, which occupies a significant part of the cultural industry. Although the pandemic did not significantly impact the game industry, the inability to conduct offline activities continued to affect game companies' performance. With the warming of the cultural industry, this indicates that the major development and prosperity of the cultural industry can drive more game companies to embark on sustainable development paths[2].

From the outbreak of last year's pandemic to the current stability, the country has introduced relevant policies supporting cultural industry development through various aspects such as finance, institutions, and finance. Although the pandemic has halted people's travel, it cannot control the speed of online network dissemination. The emergence of more and more new media has driven the development of cultural industries during the pandemic prevention period. However, the intense competition environment among cultural industries, as various enterprises aim to enter the online market, has led to the elimination of many traditional offline enterprises affected by the pandemic. In the short span of two years, many cultural industries successfully transformed, relying heavily on diversification strategy to accelerate transformation and upgrade. During the pandemic prevention period, characterized by significantly improved consumer levels, they also reaped substantial rewards, gaining more diverse development models and revenue channels. For instance, Sanqi Mutual Entertainment Company's transformation during the pandemic prevention period is worth emulating for most 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 pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic model is addressed in management policies of various countries, leading businesses of all sizes today to seek a place in line with diversification strategy development mode[4]. 𝒇𝒓𝒆𝒆𝙬𝒆𝒃𝓷𝒐𝓿𝙚𝙡.𝒄𝓸𝒎

(b) Classification and Meaning of Diversification Strategy

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings derived from these four diversified strategy modes differ accordingly. Horizontal diversification refers to enterprises utilizing the basic conditions provided by the market to produce new products that can meet new user demands, thereby driving market consumption. Vertical integration involves enterprises vertically deriving development according to their conditions, using the product industry chain to penetrate other market fields in pursuit of new consumers. Concentric diversification emphasizes innovation on existing technology, requiring new product production within the existing production range, achieving transformation through the evolution of existing technology. Conglomerate diversification focuses more on expanding the scope of operations, necessitating enterprises to connect with factors related to their products, such as raw materials, technology, and market, to expand their operational scope[5].

3. 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 strategy on game company performance can be categorized into two parts: changes in operational mode and shifts in strategic planning. This two-part transformation gradually produces effects that boost company performance. The influence brought by 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) Changes in Operational Mode

Currently, Sanqi Mutual Entertainment Game Company's primary operational scope is very extensive, thanks to the advantages brought by diversification strategy. The company's business not only covers interactive entertainment operations, but also independently undertakes mobile game and web game development and distribution. In recent years, it has continuously innovated by keeping pace with technological trends and expanded its market layout to encompass film and animation, and also in music, VR technology, and various live streaming entertainment businesses, shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain.

Established in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth sailing in its early development path. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise, initially without involvement in game and entertainment industry operations, always at risk of being swallowed by the market. However, through steady development in a single industry, Sanqi Mutual Entertainment Company was listed in 2011, yet due to later poor operations and market contraction, Sanqi Mutual Entertainment ultimately could not escape acquisition.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Despite being acquired in name, this became a valuable development opportunity for Sanqi Mutual Entertainment. Through multi-party collaboration, the two companies completed various asset restructurings in the industry. It's noteworthy that the strategy always operated by Sanqi Mutual Entertainment began to show promise at this time. Sanqi Mutual Entertainment Company transformed from a sole modern cultural and creative company before acquisition to today's dual major public listed company with advanced production manufacturing and modern cultural creativity running alongside each other, corresponding strategic changes occurring in the company's operations, impacting the business scope from the originally covered cultural creative industry. In 2014, Wuhu Shunrong Auto Parts Co., Ltd.'s previously covered business scope of cultural creative industry.