Alibaba Sells Game Studio Lingxi Games for Over $2 Billion

Alibaba, one of China's largest technology companies, has formalized an important sales decision that it has been working on for a while. The divestiture of game studio Lingxi Games stands out as a concrete step in the group's strategy to direct its resources and executive attention towards artificial intelligence and cloud computing.

Alibaba Group has reached a formal agreement to sell the entire game developer Lingxi Games to Asia-focused private equity firm Trustar Capital (formerly CITIC Capital). According to a source close to the matter told Reuters, the transaction value will be over $2 billion. In the internal memorandum sent by Lingxi CEO Zhou Bingshu to employees on Monday and highlighted in the Reuters report, it is stated that Alibaba will transfer all its shares to Trustar. Bloomberg had previously pointed out a value of at least $1.5 billion. Alibaba, Lingxi and Trustar have not made any official statements yet.

Zhou Bingshu stated in the correspondence that he and the current management team will continue to manage the company, pointing to operational continuity following the change of ownership. No details were provided on the deal's closing date, regulatory approvals or additional terms. It is not yet clear whether Alibaba will maintain commercial ties such as after-sales publishing, cloud services or technology partnerships.

Alibaba, which operates with e-commerce platforms, cloud computing and other digital services, has been focusing on divesting its non-core assets for some time. The company wants to direct capital and management attention to priority areas such as artificial intelligence and cloud. The search for a buyer for Lingxi has been going on for a while, according to two separate sources familiar with the matter.

Guangzhou-based Lingxi Games is best known for its multiplayer strategy game "Three Kingdoms: Strategy Edition" inspired by China's Three Kingdoms period. The game was developed in collaboration with Koei Tecmo Holdings, a Japanese company known for the "Romance of the Three Kingdoms" and "Nobunaga's Ambition" series. The studio had previously sought external financing, but the process was disrupted due to China's tightening proposals for the online gaming industry in late 2023. Lingxi went through a change of management in 2024, and Zhou Bingshu became the CEO after founder Zhan Zhonghui.