HONG KONG: Alibaba Group is set to sell its game development unit, Lingxi Games, to private equity firm Trustar Capital for more than $2 billion, a person familiar with the matter told The Associated Press on Monday.
The Chinese technology giant and Trustar have reached a formal agreement following several rounds of negotiations, according to an internal memo sent to Lingxi staff by CEO Zhou Bingshu. The memo was reviewed by Reuters.
Under the terms of the agreement, Alibaba will transfer its entire stake in Lingxi to Trustar, the memo said. The memo did not disclose the deal’s value or expected closing date, nor did it provide details on regulatory approvals or other conditions.
Zhou said he and Lingxi’s management team would continue to lead the company, signaling operational continuity after the ownership change.
Bloomberg News, which first reported the memo, cited unnamed sources as saying the deal was worth at least $1.5 billion.
AI-FOCUSED ALIBABA REVIEWING NON-CORE ASSETS
Alibaba, one of China’s largest tech firms, operates e-commerce platforms, cloud-computing services and other digital businesses. The company has been shedding non-core assets as it redirects capital and management focus toward strategic priorities including artificial intelligence and cloud computing.
The company had been seeking a buyer for Lingxi for some time, according to two separate sources familiar with the matter, who spoke on condition of anonymity because the information was confidential.
Zhou described Trustar — formerly known as CITIC Capital — as an Asia-focused private equity firm with the industry resources and operational expertise to support Lingxi’s next phase of development.
It was unclear whether Alibaba would retain any commercial ties with Lingxi after the sale, including publishing, cloud services or technology partnerships.
LINGXI IN TRANSITION
Guangzhou-based Lingxi Games is best known for “Three Kingdoms: Strategy Edition,” a multiplayer strategy title based on China’s Three Kingdoms era. The game was developed with Japan’s Koei Tecmo Holdings, whose franchises include “Romance of the Three Kingdoms” and “Nobunaga’s Ambition.”
The transaction extends a period of transition for Lingxi, which had previously explored external fundraising, the two sources said. A fundraising effort planned in late 2023 stalled after China proposed tighter regulations for the online gaming sector, one source said.
Lingxi also underwent a management reshuffle in 2024. Zhou, who led the team behind “Three Kingdoms: Strategy Edition,” became CEO after founder Zhan Zhonghui departed, according to Chinese corporate records.
