TLDR
- Alibaba is selling its gaming unit Lingxi Games to private equity firm Trustar Capital in a deal worth over $2 billion
- An internal memo confirmed the deal, with Lingxi CEO Zhou Bingshu and the management team staying in place
- The sale is part of Alibaba’s broader strategy to shed non-core assets and redirect capital toward AI and cloud
- Lingxi is best known for mobile strategy game “Three Kingdoms: Strategy Edition,” developed with Japan’s Koei Tecmo
- Alibaba has now sold over $4.6 billion in non-core assets since late 2024, including hypermarket chain Sun Art and department store Intime
Alibaba Group is set to sell its gaming unit Lingxi Games to Asian private equity firm Trustar Capital for more than $2 billion, according to a person familiar with the matter. Bloomberg reported the deal at a lower floor of $1.5 billion, citing separate sources.
Alibaba (BABA) stock rose 1.92% on the news.
Alibaba Group Holding Limited, BABA
An internal memo sent to Lingxi staff Monday by CEO Zhou Bingshu confirmed the formal agreement had been reached after several rounds of talks. Zhou said he and the management team would remain in place after the ownership change.
Trustar Capital, formerly known as CITIC Capital, is an Asia-focused private equity firm. Zhou described it as having the industry resources and operational expertise to support Lingxi’s next stage of growth.
The memo did not disclose the exact deal value, expected closing date, or any regulatory conditions attached to the transaction.
Lingxi, Alibaba, and Trustar did not respond to requests for comment from Reuters.
Alibaba Sheds Non-Core Assets
The Lingxi sale fits a pattern Alibaba has followed since at least late 2024. The company sold its stakes in Sun Art and Intime for a combined $2.6 billion, moves that Chairman Joe Tsai and CEO Eddie Wu described as part of a portfolio streamlining effort.
Alibaba had been quietly seeking a buyer for Lingxi for some time, according to two sources familiar with the matter. A fundraising process planned for late 2023 stalled after China proposed tighter gaming regulations, one source said.
The company went through a management reshuffle in 2024. Zhou, who led the team behind “Three Kingdoms: Strategy Edition,” was appointed CEO after founder Zhan Zhonghui departed.
It remains unclear whether Alibaba will retain any commercial ties with Lingxi after the sale, including cloud services or publishing arrangements.
Lingxi’s Background
Guangzhou-based Lingxi is best known for “Three Kingdoms: Strategy Edition,” a multiplayer mobile strategy game built in collaboration with Japan’s Koei Tecmo, whose franchises include “Romance of the Three Kingdoms” and “Nobunaga’s Ambition.”
Alibaba’s move mirrors a decision made by ByteDance earlier this year, which sold its gaming studio Moonton. Both companies have ramped up investment in AI, and their ChatGPT-style services rank among the most-used AI apps in China.
The Lingxi deal has not yet disclosed a closing timeline or details on regulatory approvals.
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