(Anti-theft, released in the evening.) Abstract: With the advancement of technology and the coverage of smart networks, the rise of the game industry in recent years has been evident to the public. The dissemination of games is no longer confined to stereotypical promotional methods, and the influence of games has gradually expanded to all aspects of life. Accordingly, gaming companies also need to continuously integrate resources, innovate, and update to improve performance in tandem with the rapid development of the times. Diversification strategy perfectly caters to the planning needs and development goals within the game industry. In the context of economic globalization, diversification strategy, as the preferred model for enterprise development, is also applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to elaborate on the impact of diversification strategy on the performance of gaming companies.

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

Diversification strategy is a market strategy adopted by enterprises during operation to occupy new markets and develop new markets more effectively. It is a strategic plan used by enterprises to enter new fields with targeted preparation in order to avoid risks encountered in the operation of a single business. Practically applying diversification strategy to gaming companies can effectively improve company performance and bring about a transformation from quantitative to qualitative change in the development of gaming companies.

1. Macro Background of Diversification Strategy

Entering 2021, with effective control of the pandemic by the state, people's lives are getting back on track, and both economy and culture are showing signs of recovery. On April 30, 2021, relevant data released by the National Bureau of Statistics indicated that the national cultural industry development has basically returned to the pre-pandemic level [1]. This is very favorable news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the arrival of the pandemic did not significantly impact the gaming industry, the inability to conduct offline activities has always affected the performance of gaming companies. With the recovery of the cultural industry, for most gaming companies, this means that the great development and prosperity of the cultural industry can promote more gaming companies to embark on a sustainable development path [2].

From the outbreak of last year's pandemic to the current stability, the state has introduced relevant policies from multiple aspects such as finance, regulations, and finance to support the development of the cultural industry. Although the pandemic has hindered people's travel, it cannot control the rapid spread of online networks. More and more new media are driving the development of the cultural industry during the pandemic prevention period. However, due to the competition among enterprises wanting to enter the online market, the competitive environment within the cultural industry is quite intense. Many traditional offline enterprises have been eliminated by society under the influence of the pandemic. Yet, in this short span of two years, numerous cultural industries have successfully transformed, mostly relying on the accelerated transformation and upgrading brought about by the diversification strategy model. During the pandemic prevention period, when the consumption level of residents increased significantly, they likewise harvested significant gains and acquired more diversified development models and channels for revenue, for example, the transformation undertaken by Sanqi Mutual Entertainment during the pandemic prevention period, which most gaming companies can learn from [3].

2. A 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 involved in the management policies of multiple countries, so today, every small and large enterprise seeks a place by following the development model of diversification strategy [4].

(b) Classification and Meaning of Diversification Strategy

Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different modes derived from diversification strategy have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can satisfy new user demands, thereby driving market consumption. Vertical integration involves enterprises deriving vertically according to their development situation, using the product industry chain to infiltrate other market fields to seek new consumer targets. Concentric diversification emphasizes the innovation of existing technology, requiring the production of new products within the original production scope, achieving this through the metamorphosis of existing technology. Overall diversification emphasizes expanding the range of operations, and enterprises need to connect with factors such as raw materials, technology, and markets related to their own products to expand their range of operations [5].

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

It can be said that in the operating process of all gaming companies, the impact of diversification strategy on gaming company performance is divided into two parts: the change in the operating model and the shift in strategic planning. These two aspects gradually generate effects to drive performance improvement. The impact of diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on the performance of gaming companies using Sanqi Mutual Entertainment Game Company as an example [6].

(1) The Change in Operating Model

Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is also an advantage brought by the diversification strategy. The company's business involves not only the operation of interactive entertainment but also the development and distribution of mobile and web games under its Sanqi Mutual Entertainment Game Company. In recent development, staying abreast of the times and continuously innovating, it expanded the market to encompass film and animation, and also positioned itself in music, VR technology, and various other live streaming and pan-entertainment businesses to shape its own market cultural industry chain.

Sanqi Mutual Entertainment Game Company was founded in 1995, but its early development path was not smooth. Initially, Sanqi Mutual Entertainment's industrial chain did not involve game and entertainment industry operations, and it was at constant risk of being swallowed by the market. However, steadily developing a single industry, Sanqi Mutual Entertainment Company went public in 2011. Yet, with subsequent poor operation and market contraction, Sanqi Mutual Entertainment eventually did not escape the fate of being acquired.

In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was nominally acquired, for Sanqi Mutual Entertainment, it was a development opportunity worth seizing. Through multi-faceted collaboration, the two companies completed the asset restructuring of each industry. It is worth mentioning that the strategic operation that Sanqi Mutual Entertainment had been running began to show promise at this time. Sanqi Mutual Entertainment Company transformed from a single modern creative culture company before acquisition to a dual main industry listed company engaged in both advanced manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operation strategy also changed, but initially, the business scope covered by the cultural creativity industry

Source: Webnovel.com, updated by lotustale.com