Alibaba Sells Gaming Studio Lingxi to Trustar Capital in Deal Worth Over $2 Billion

Alibaba Group is selling its gaming studio Lingxi Games to Hong Kong-based private equity firm Trustar Capital, according to Reuters. A person familiar with the matter told Reuters the deal could net Alibaba more than $2 billion. Bloomberg News, which first reported the internal memo announcing the deal, put the value at a minimum of $1.5 billion.

Trustar Capital confirmed late Monday, August 17, that it had reached a transaction agreement to acquire Alibaba's entire stake in Lingxi. Neither company disclosed the price. Lingxi CEO Zhou Bingshu told staff in a memo, reviewed by Reuters, that Alibaba and Trustar reached the formal agreement after several rounds of talks, and that Alibaba would transfer its full stake to Trustar.

No closing date has been set. The memo gave no details on regulatory approvals or other conditions, and Trustar's own statement didn't fill in those gaps either, according to Reuters. Alibaba and Lingxi did not respond to Reuters' requests for comment.

What Lingxi actually is

Lingxi Games, based in Guangzhou, is best known for "Three Kingdoms: Strategy Edition," a multiplayer mobile strategy game built around China's Three Kingdoms era, developed with Japan's Koei Tecmo Holdings, the studio behind "Romance of the Three Kingdoms" and "Nobunaga's Ambition."

The numbers behind that one game are substantial. According to ixbt.games, the title launched in 2019, had drawn more than 100 million players worldwide by 2024, and had generated $1.2 billion in user spending by spring 2021. It topped the App Store's highest-grossing mobile 4X strategy game rankings. Analysts estimate Lingxi's total 2025 revenue at $450 million to $600 million.

Zhou said he and the rest of Lingxi's management team will stay in place after the ownership change, and Trustar said it would support the existing team, signals meant to reassure staff and players that day-to-day operations won't be disrupted.

Why Alibaba is selling

This isn't a one-off. Alibaba has been shedding non-core businesses for a while now, most recently hypermarket chain Sun Art and department-store operator Intime, according to Reuters. The strategy, as ETEnterpriseAI describes it, is "selection and concentration." The approach frees up capital and management bandwidth to pour into AI and cloud computing under CEO Eddie Wu.

Two sources told Reuters that Alibaba had been shopping Lingxi around for some time. Lingxi's recent history explains this interest. ETEnterpriseAI reported that Lingxi tried to raise outside funding in a process that stalled in late 2023, after China proposed tighter regulations on the online gaming sector. Lingxi went through a management shakeup in 2024, with founder Zhan Zhonghui departing and Zhou, who had led the "Three Kingdoms: Strategy Edition" team, taking over as CEO.

Trustar Capital, formerly known as CITIC Capital, is an Asia-focused private equity firm. Zhou described the firm in his memo as having "the industry resources and operational expertise" to support Lingxi's next phase, according to Reuters.

What's still unclear

Reuters flagged that it's not yet known whether Alibaba will keep any commercial ties to Lingxi post-sale. Publishing, cloud hosting, or tech partnerships could all remain in play, or none of them. Alibaba Cloud has been a growth priority for the company, and if Lingxi keeps running on Alibaba's infrastructure, that signals a very different outcome than a clean break.

The price gap between sources also warrants attention. Reuters' source puts the deal above $2 billion. Bloomberg's reporting, cited across multiple outlets including BigGo Finance and ixbt.games, says "at least $1.5 billion." Neither Alibaba nor Trustar has confirmed a number publicly, so both figures should be treated as informed estimates from people close to the deal, not confirmed transaction values.

For context on how this fits into Alibaba's broader balance sheet: none of the sourcing here puts a number on how much Alibaba originally invested in Lingxi or what return this represents.

The next marker to watch is whether Alibaba or Trustar issues a formal joint statement disclosing the actual price and closing timeline, something neither has done as of this reporting. Until that happens, the $1.5 billion to $2 billion-plus range is the best public estimate available.