Alibaba Group is expected to receive more than $2 billion from the sale of its game development unit, Lingxi Games, to private equity firm Trustar Capital, according to a person familiar with the matter who spoke to Reuters.
The two companies have reached a formal agreement following several rounds of negotiations, according to an internal memo sent to Lingxi employees on Monday by the company’s CEO, Zhou Bingshu, and reviewed by Reuters.
Under the agreement, Alibaba will transfer its entire stake in Lingxi to Trustar Capital. The value of the transaction and its expected closing date were not disclosed in the memo.
Bloomberg News, which first reported on the deal, said the transaction would be worth at least $1.5 billion.
Alibaba has been reviewing its non-core assets as it focuses investment and management attention on strategic areas such as artificial intelligence and cloud computing. The company, one of China’s largest technology firms, operates major e-commerce platforms alongside cloud and other digital businesses.
Sources said Alibaba had been looking for a buyer for Lingxi for some time. Lingxi had previously explored external fundraising, but a planned fundraising exercise in late 2023 stalled after China proposed tighter regulations for the online gaming industry.
Trustar Capital, formerly known as CITIC Capital, said the firm has the industry resources and operational expertise to support Lingxi’s next phase of growth, according to Zhou’s memo.
Zhou and Lingxi’s management team will remain in charge of the company, suggesting continuity in its operations following the ownership change.
Lingxi’s Gaming Business
Based in Guangzhou, Lingxi Games is best known for “Three Kingdoms: Strategy Edition,” a multiplayer strategy game based on China’s Three Kingdoms era. The title was developed in collaboration with Japanese gaming company Koei Tecmo Holdings, whose franchises include Romance of the Three Kingdoms and Nobunaga’s Ambition.
The sale comes after several changes at Lingxi. The company underwent a management reshuffle in 2024, with Zhou, who had led the team behind Three Kingdoms: Strategy Edition, becoming CEO after founder Zhan Zhonghui left the company.
It remains unclear whether Alibaba will maintain commercial ties with Lingxi after the transaction, including potential relationships involving game publishing, cloud services or technology partnerships.
Source: citinews
