Alibaba Group has reached a formal agreement to sell its gaming subsidiary Lingxi Games to Trustar Capital, a deal valued at more than $2 billion. The transaction highlights Alibaba’s ongoing restructuring to focus on AI and cloud computing.
- Deal exceeds $2 billion valuation
- Lingxi Games to remain under original management
- Part of Alibaba’s AI and cloud strategic realignment
What happened
Lingxi Games, based in Guangzhou and known for its popular game 'Three Kingdoms: Strategy Edition', will continue operations under the leadership of Zhou and the existing management team. The studio had previously attempted fundraising in late 2023 before regulatory changes in China’s gaming sector stalled the process.
Why it matters
This sale reflects Alibaba's strategic pivot by divesting non-core businesses to refocus on artificial intelligence, cloud services, and other growth areas. Gaming, while lucrative, is no longer a top priority for the tech giant as it realigns capital and management attention. The divestment of Lingxi Games fits into a broader trend of Chinese tech companies streamlining portfolios amid regulatory scrutiny and shifting market conditions.
For Trustar Capital, acquiring Lingxi offers an opportunity to leverage its resources and operational expertise in the gaming sector. The firm plans to support Lingxi’s growth while possibly enhancing its market positioning with the studio’s established titles and ongoing projects.
What to watch next
The future direction of Lingxi Games will also be critical to monitor under Trustar’s ownership, especially regarding new game development and strategic initiatives. Given Lingxi’s existing collaborations, such as with Japan’s Koei Tecmo Holdings, expansion or new partnerships could shape the company’s trajectory in the competitive gaming landscape.