Alibaba is offloading its gaming business in a deal that has grown far bigger than anyone expected. The company is selling Lingxi Games in a transaction now valued above $2 billion, according to Reuters, marking one of the clearest signals yet that the Alibaba Lingxi Games sale is really about something else entirely: an all-in bet on artificial intelligence.
Summary
Key takeaways
- Alibaba is selling Lingxi Games in a deal now valued at more than $2 billion, according to Reuters.
- The buyer is Trustar Capital, an Asia-based private equity firm that reportedly beat out several rival bidders.
- Bloomberg had earlier valued the unit at more than $1.5 billion; back in June 2026, early estimates put it in a range of approximately $1.03 billion to $1.33 billion, equivalent to roughly 7 to 9 billion yuan.
- Lingxi Games operates five in-house studios and platforms including 9Game and Jiaoyimao, with “Three Kingdoms: Strategy Edition” as its flagship title.
- CEO Eddie Wu is steering Alibaba’s capital and attention toward artificial intelligence and cloud computing, treating gaming as a non-core business.
Alibaba sells Lingxi Games for over $2 billion
The headline number here is simple: Alibaba’s gaming subsidiary changed hands for more than $2 billion, a figure that surprised even seasoned deal-watchers. Reuters reported the sale price climbed well past earlier estimates, turning what looked like a modest divestment into a genuinely large transaction for China’s gaming sector.
Deal valuation surpasses initial estimates
The number kept climbing at nearly every stage of the process. When Alibaba first floated the idea of selling Lingxi back in June 2026, the estimated value fell between 7 to 9 billion yuan, corresponding to roughly $1.03 billion to $1.33 billion. Bloomberg later reported the figure had moved up to more than $1.5 billion. By the time the deal closed, the final price had pushed past $2 billion — nearly double where talks had started just weeks earlier.
That kind of jump usually points to one of two things: aggressive competitive bidding among suitors, or a buyer’s reassessment of how much the underlying business could actually earn. Either way, it’s a notable data point for a Chinese gaming market that has spent years under regulatory pressure.
Trustar Capital as the buyer
The winning bidder was Trustar Capital, an Asia-based private equity firm that reportedly outbid several competitors to close the deal. Its willingness to pay well above the early asking price suggests real confidence in Lingxi’s earning potential, even as broader sentiment around Chinese mobile gaming has been mixed.
Lingxi Games and its market position
Lingxi Games built its identity around mobile strategy titles, anchored by a portfolio of studios and distribution platforms that gave it real reach inside China’s crowded app ecosystem. Understanding what the buyer is actually getting helps explain why the price climbed so high.
Game studios and platforms under Lingxi
The company operates five self-developed game studios, along with platforms including 9Game and Jiaoyimao. That combination gave Lingxi both a production pipeline and a distribution channel — a structure that made it more than just a single hit game riding on borrowed time.
Flagship title and market presence
Its best-known product is “Three Kingdoms: Strategy Edition,” a mobile strategy game that built a sizable player base in China and abroad. That title has effectively served as the crown jewel of the unit, the kind of asset that gives a private equity buyer a recognizable, revenue-generating anchor rather than a speculative bet.
Lingxi’s origins from earlier acquisitions
Lingxi Games didn’t start out as a standalone gaming company — it was assembled from pieces of Alibaba’s broader tech shopping spree. The unit traces back to Alibaba’s 2014 acquisition of UCWeb and the 2017 purchase of Guangzhou Ejoy. After a rebrand around 2020, Lingxi settled into its current form, focused squarely on mobile strategy and simulation games.
Alibaba’s strategic refocus on AI and cloud computing
This sale is not an isolated housekeeping move. It’s part of a broader pattern of Alibaba trimming businesses that don’t align with where CEO Eddie Wu wants the company’s money and attention to go next.
CEO Eddie Wu’s restructuring vision
Wu has been systematically redirecting Alibaba’s capital and focus toward artificial intelligence and cloud computing, treating other business lines as candidates for the exit door if they don’t serve that core mission. Selling Lingxi fits neatly into that pattern — freeing up capital and management bandwidth that can now flow toward AI infrastructure and cloud services instead of mobile game development.
Gaming as a non-core business
Even though Lingxi built a loyal player base and profitable titles, it was always overshadowed by Alibaba’s e-commerce operations and, increasingly, by its AI ambitions. That’s the real story behind the gaming divestment: gaming, however profitable on its own terms, simply wasn’t central enough to Alibaba’s next chapter to keep it in-house.
Implications amidst China’s gaming regulations
The timing matters too. China’s gaming industry has spent recent years navigating regulatory curbs on minors’ playtime, periodic freezes on new game approvals, and tighter content oversight generally. Against that backdrop, a sale price above $2 billion for a mobile-focused studio stands out as a genuinely strong outcome — one that suggests buyers still see real value in established Chinese gaming assets, even under a tougher regulatory climate.
For the wider industry, the deal also underscores just how entrenched Tencent and NetEase remain at the top of China’s gaming hierarchy. Alibaba’s decision to step back from gaming rather than compete harder for share signals that it sees limited upside in challenging those two giants directly — better, in Wu’s view, to redeploy that capital toward AI and cloud, where Alibaba believes it can carve out a stronger competitive position.
FAQ
Why is Alibaba selling Lingxi Games?
Alibaba is selling Lingxi Games to focus resources on artificial intelligence and cloud computing, viewing gaming as a non-core business.
Who bought Lingxi Games and for how much?
Trustar Capital, an Asia-based private equity firm, bought Lingxi Games for more than $2 billion.
What is Lingxi Games known for?
Lingxi Games operates five studios and platforms including 9Game and Jiaoyimao, with its flagship mobile strategy game “Three Kingdoms: Strategy Edition.”
How does this sale reflect trends in China’s gaming industry?
The sale occurs amid regulatory challenges in China’s gaming sector and signals Alibaba’s shift away from gaming toward AI and cloud computing.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
