Alibaba to sell Lingxi Games in more than $2 billion deal, source says

Alibaba Group is expected to reap more than $2 billion from the sale of its game developer unit Lingxi Games to private equity firm Trustar Capital, a person familiar with the matter told Reuters.

Alibaba and Trustar have reached a formal agreement after several rounds of talks, according to an internal memo sent to Lingxi staff on Monday by the game developer's CEO Zhou Bingshu and reviewed by Reuters.

Lingxi, Alibaba ‌and Trustar did ⁠not ⁠immediately respond to requests for comment from Reuters.


Under the agreement, Alibaba will transfer all of its Lingxi stake to Trustar, the ​memo said.

The memo did not disclose the value of the deal or when the transaction was expected to close. ​It also gave no details of regulatory approvals or other conditions attached to the deal.

Zhou said in the memo he and Lingxi's management team would continue to lead the company, signalling continuity in the ​studio's operations following the ownership change.

Bloomberg News, which first reported the ⁠memo, said ‌the deal would be worth at least $1.5 billion, citing sources.

AI-focussed Alibaba reviewing non-core assets

Alibaba, one of ​China's largest technology companies, operates e-commerce platforms, cloud-computing services and other digital businesses. ⁠It has been reviewing non-core assets as it directs capital and management ​attention toward strategic priorities including AI and cloud.

The Chinese tech company ​had been seeking a buyer for Lingxi for some time, according to two separate sources familiar with the matter, who spoke on condition of anonymity because the information is confidential.

Trustar, formerly known as CITIC Capital, is an Asia-focused private equity firm that has the industry resources and operational expertise to support Lingxi's next stage of development, according to Zhou.

It was not immediately clear whether Alibaba would retain any ‌commercial ties with Lingxi after the sale, including publishing, cloud services or technology partnerships.

Lingxi in transition

Guangzhou-based Lingxi Games is best known for 'Three Kingdoms: Strategy Edition', a multiplayer strategy title based on China's Three Kingdoms era.

The game ⁠was developed in collaboration with Japan's Koei Tecmo Holdings, whose franchises include 'Romance of the Three Kingdoms' and 'Nobunaga's Ambition'.

The transaction between Alibaba and Trustar would extend a period of change for Lingxi, which had previously ​explored external fundraising, the two sources said. A fundraising process planned in late 2023 stalled after China proposed tighter rules for the online gaming sector, one of them said.

Lingxi also underwent a management reshuffle in 2024. Zhou, who had led the team behind 'Three Kingdoms: Strategy Edition', became CEO after founder Zhan Zhonghui departed, according to Chinese corporate records.