This Lord is Very Scientific-Chapter 824 - 756

(Anti-theft, to be released later.) Abstract: With the advancement of technology and the pervasive model of intelligent networks, the rise of the gaming industry in recent years is evident to all citizens. The dissemination methods of games are no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to continually integrate resources, innovate, and iterate with the rapid development of the era to enhance performance. A diversification strategy perfectly meets the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as a preferred mode of enterprise development, is also 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. 𝕗𝐫𝐞𝕖𝕨𝐞𝗯𝚗𝕠𝘃𝐞𝚕.𝐜𝗼𝚖

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

Diversification strategy is a market strategy method adopted by enterprises during their operations to occupy more new markets and develop new markets. It is also a strategic plan used by enterprises to avoid risks encountered during the operation of a single business and to enter new business fields with targeting and preparation. Applying a diversification strategy to gaming companies can effectively improve company performance, bringing about a process from quantitative change to qualitative change in the development of gaming companies.

1. The macro background of diversification strategy

Entering 2021, with the effective control of the pandemic by the state, people's lives are getting back on track, and the economic culture is showing a promising trend of recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to pre-pandemic levels[1]. This is very advantageous news for the gaming industry, which holds a significant share in the cultural industry. Although the arrival of the pandemic did not greatly impact the gaming industry, the inability to conduct offline activities still affected the performance of game companies. The warming of the cultural industry means that for most game companies, the great development and prosperity of the cultural industry can promote and drive more game companies to embark on the path of sustainable development[2].

From last year's outbreak of the pandemic to the stabilized situation now, the state has issued relevant policies to support the development of the cultural industry from various aspects including finance, systems, and finance. While the pandemic has hindered people's travel, it cannot control the speed of online network dissemination. An increasing number of new media companies have emerged, driving the development of the cultural industry during the pandemic control period. However, the competitive environment within the cultural industry is very fierce due to each company's desire to squeeze into the online market. Many traditional offline enterprises have been eliminated by society during this time due to the impact of the pandemic. Yet, within this short two-year period, many cultural industries have successfully transformed. These companies mostly rely on the diversification strategy model to accelerate transformation and upgrading, and they have equally reaped substantial rewards during the pandemic control period, when residents' consumption levels improved significantly, obtaining more diverse development models and revenue channels. The transformation made by Sanqi Mutual Entertainment during the pandemic control period is worth most gaming companies learning from[3].

2. Brief analysis and classification of diversification strategy

(1) 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 strategies. This strategic model, which has affected the world, is involved in management policies and plans in many countries, leading to today's situation where enterprises of all sizes are seeking a position according to the development model of diversification strategies[4].

(2) Classification and meaning of diversification strategies

Diversification strategies are generally divided into four types: horizontal diversification, vertical integration, concentric diversification, and holistic diversification. The four different models derived from diversification strategies have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new user needs, thereby driving market consumption. Vertical integration is when enterprises, based on their development situation, vertically derive and use the product industry chain to penetrate other market fields seeking new consumer targets. Concentric diversification places more emphasis on the innovation of existing technologies, requiring production of new products within the existing production range and achieving the entire process through the transformation of existing technologies. Holistic diversification emphasizes expanding business scope variations, where enterprises need to consider factors related to their products' raw materials, technologies, and markets to expand their business scope[5].

3. The impact of diversification strategy on the performance of game companies

It can be said that during the operation of game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in operation mode and shifts in strategic plans. The gradual effects from these two parts lead to improved company performance. The impact brought about by diversification strategy is multi-faceted. This paper will analyze and study the impact of diversification strategy on game companies' performance using Sanqi Mutual Entertainment Game Company as an example[6].

(1) Changes in operation mode

Currently, the main operation range of Sanqi Mutual Entertainment Game Company is quite extensive. This is also due to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also undertakes the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years, closely following the technology of the times and continually innovating, the market has expanded to film and anime ACG plans. It is also shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain in music, VR technology, and various live broadcast and other pan-entertainment businesses.

Sanqi Mutual Entertainment Game Company was established in 1995. However, the early development road was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. At first, Sanqi Mutual Entertainment's industry chain did not involve the operation of games and other entertainment industries, risking being swallowed by the market at any time. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Yet, accompanied by poor later-stage 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 Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% equity stake. Although it was nominally acquired, for Sanqi Mutual Entertainment, this was an opportunity worth seizing. The two companies completed the asset restructuring of various industries through multi-faceted collaboration. It is worth mentioning that the strategy that Sanqi Mutual Entertainment has always pursued was beginning to show promise. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creative company before the acquisition to the present dual-main business listed company with advanced production manufacturing and modern cultural creativity in parallel. Correspondingly, the company operating strategy of Sanqi Mutual Entertainment also underwent changes.