Alibaba Group is preparing to exit its gaming unit Lingxi Games in a deal expected to generate more than $2 billion, sharpening the Chinese technology giant’s shift toward artificial intelligence and cloud computing while handing the game developer to Asia-focused private equity firm Trustar Capital.
Trustar Will Take Alibaba’s Entire Lingxi Stake
The agreement follows several rounds of negotiations and represents a complete ownership transfer rather than a partial investment.
Reuters said Alibaba and Trustar reached a formal agreement, according to an internal memo sent to Lingxi employees on Monday by CEO Zhou Bingshu and reviewed by the news agency.
The internal memo itself did not disclose the purchase price. Reuters reported that it also provided no closing timetable, regulatory-approval details or other conditions attached to the transaction. Bloomberg News, which first reported the memo, separately valued the deal at at least $1.5 billion, according to Reuters.
Lingxi Management Will Remain After the Sale
The ownership change is not expected to immediately replace the studio’s leadership.
Zhou told employees he and Lingxi’s existing management team would continue leading the business after Trustar takes control, signaling operational continuity despite Alibaba’s departure.
Trustar was previously known as CITIC Capital. Zhou described the Asia-focused private equity company as having the industry resources and operational expertise needed to support Lingxi’s next stage of development.
Whether Alibaba will completely separate from Lingxi commercially remains unresolved. It was unclear whether the companies would maintain relationships involving game publishing, Alibaba Cloud or other technology services after the transaction.
Alibaba Redirects Resources Toward AI and Cloud
The divestment fits into Alibaba’s wider review of businesses outside its highest-priority growth areas.
U.S. News shared Alibaba has been evaluating non-core assets as it directs more capital and management attention toward artificial intelligence and cloud computing.
Alibaba had been seeking a buyer for Lingxi for some time, citing two people familiar with the confidential process.
‘Three Kingdoms’ Studio Enters Another Transition
Guangzhou-based Lingxi is best known for the multiplayer mobile strategy game “Three Kingdoms: Strategy Edition.”
The title was developed with Japan’s Koei Tecmo Holdings, whose franchises include “Romance of the Three Kingdoms” and “Nobunaga’s Ambition.”
The sale follows several years of change inside the studio. Lingxi explored external fundraising in late 2023, but the process stalled after China proposed tighter regulations for online gaming.
Lingxi underwent a management reshuffle in 2024, when Zhou—who had led the team behind “Three Kingdoms: Strategy Edition”—became CEO after founder Zhan Zhonghui left the company.
The $2 billion-plus transaction therefore represents more than a gaming-sector acquisition. For Alibaba, it converts a non-core business into capital as the company concentrates on AI and cloud computing. For Lingxi, it begins another chapter under an investment firm that plans to retain the studio’s existing leadership while taking full ownership from one of China’s biggest technology companies.
