Key Highlights
- Chinese e-commerce giant Alibaba has reached an agreement to divest its gaming division Lingxi Games to Trustar Capital for more than $2 billion
- Company CEO Zhou Bingshu confirmed the transaction through an employee memo, noting that current leadership will continue post-acquisition
- This divestiture aligns with Alibaba’s strategic plan to offload peripheral businesses while concentrating resources on artificial intelligence and cloud computing
- The gaming studio’s flagship product is the mobile title “Three Kingdoms: Strategy Edition,” created in partnership with Japanese developer Koei Tecmo
- Since the fourth quarter of 2024, Alibaba has divested more than $4.6 billion worth of peripheral business units, including retail operations Sun Art and Intime
Chinese technology conglomerate Alibaba Group has finalized an agreement to transfer ownership of its gaming subsidiary Lingxi Games to Asian investment firm Trustar Capital in a transaction valued at over $2 billion, according to an individual with direct knowledge of the negotiations. Separate reporting from Bloomberg placed the transaction value at a minimum of $1.5 billion, based on different insider sources.
Shares of Alibaba (BABA) advanced 1.92% following the announcement.
Alibaba Group Holding Limited, BABA
In a company-wide communication distributed to Lingxi employees on Monday, CEO Zhou Bingshu verified that a definitive agreement had been executed following multiple negotiation sessions. Zhou assured staff that both he and the existing executive leadership would maintain their positions following the ownership transition.
Trustar Capital, which previously operated under the name CITIC Capital, specializes in private equity investments across Asia. Zhou characterized the firm as possessing both the sector-specific knowledge and management capabilities necessary to advance Lingxi’s development trajectory.
The internal communication did not reveal specific financial terms, anticipated completion timeline, or any governmental approval requirements tied to the agreement.
Representatives from Lingxi, Alibaba, and Trustar declined to provide statements when contacted by Reuters.
Strategic Portfolio Restructuring Continues
This latest transaction represents a continuation of the strategic direction Alibaba has pursued throughout the latter half of 2024. Previously, the corporation divested its ownership positions in hypermarket operator Sun Art and department store chain Intime, generating aggregate proceeds of $2.6 billionātransactions that Chairman Joe Tsai and CEO Eddie Wu characterized as essential portfolio optimization initiatives.
Multiple sources with knowledge of the situation indicated that Alibaba had been actively pursuing potential acquirers for Lingxi for an extended period. According to one insider, a capital-raising initiative planned for late 2023 was postponed after Chinese regulators floated stricter gaming industry oversight proposals.
The gaming unit experienced executive changes throughout 2024. Zhou, who spearheaded development of “Three Kingdoms: Strategy Edition,” assumed the CEO position following founder Zhan Zhonghui’s exit from the company.
Questions remain regarding whether Alibaba will maintain any business relationships with Lingxi following the acquisition’s completion, potentially involving cloud infrastructure services or content distribution agreements.
About Lingxi Games
Headquartered in Guangzhou, Lingxi Games has built its reputation primarily on “Three Kingdoms: Strategy Edition,” a massively multiplayer mobile strategy experience developed in partnership with Japanese gaming company Koei Tecmo, creator of renowned franchises including “Romance of the Three Kingdoms” and “Nobunaga’s Ambition.”
Alibaba’s strategic withdrawal from gaming operations parallels a similar move by ByteDance, which divested its gaming development arm Moonton earlier in 2025. Both technology companies have significantly expanded their artificial intelligence investments, with their respective ChatGPT-comparable platforms achieving top adoption rates among Chinese AI applications.
No specific closing date or regulatory approval details have been announced for the Lingxi transaction.
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