Alibaba Group is set to sell its entire stake in game developer Lingxi Games to private equity firm Trustar Capital in a deal expected to generate more than US$2 billion, according to a person familiar with the matter.
The transaction comes as the Chinese technology giant continues to review non-core assets and channel capital and management attention towards artificial intelligence and cloud computing.
Trustar said late Monday that it had reached an agreement with Alibaba to acquire the technology group’s entire stake in Lingxi. The value of the transaction was not disclosed in Trustar’s announcement or an internal memo sent to Lingxi staff.
The deal follows several rounds of discussions between Alibaba and Trustar, with Lingxi CEO Zhou Bingshu and the company’s management team expected to remain in place after the ownership change.
Zhou said in the memo that Trustar’s industry resources and operational expertise would support Lingxi in its next stage of development. Trustar also said it would continue to back the existing management team.
Alibaba has been looking to divest Lingxi for some time, according to two people familiar with the matter. The company has also recently sold other non-core assets including hypermarket operator Sun Art and department-store chain Intime.
Lingxi, which is based in Guangzhou, 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 Japan’s Koei Tecmo Holdings.
The game developer had previously explored external fundraising, although a planned fundraising process in late 2023 stalled after China proposed tighter regulations for the online gaming industry. The sector has since recovered from the earlier regulatory uncertainty.
Lingxi also underwent a management reshuffle in 2024, with Zhou, who had led the team behind “Three Kingdoms: Strategy Edition”, taking over as chief executive after founder Zhan Zhonghui departed.
The sale marks another step in Alibaba’s broader portfolio reshaping as it focuses on its core e-commerce operations alongside strategic growth areas such as AI and cloud computing.
It was not immediately clear whether Alibaba would retain commercial ties with Lingxi following the sale, including potential publishing, cloud services or technology partnerships.
