Alibaba to Sell Gaming Unit Lingxi Games for Over $2 Billion

Chinese e-commerce and technology giant Alibaba has decided to sell its video game development unit, Lingxi Games. The transfer of its shares to Asia-focused private equity firm TruStar Capital could generate more than $2 billion for Alibaba, according to reports.

The two companies have already reached a formal agreement under which 100% of Lingshi Games' shares will be transferred. Reuters confirmed the development in a report.

In an internal memo sent to Lingxi Games employees, the company's CEO Zhou Bingshu said that despite the change in ownership, the existing management team under his leadership would continue to run the game studio.

The memo did not specify the final value of the transaction or when the transfer would be completed. However, a separate Bloomberg report valued the deal at at least $1.5 billion.

Greater Focus on AI and Cloud Technology

As part of its strategy to strengthen its core businesses, Alibaba has recently been selling assets and companies outside its main areas of operation.

The company is now focusing more heavily on emerging sectors such as artificial intelligence (AI) and cloud computing, increasing investment and resources in these areas.

Earlier, Alibaba sold its ownership of the hypermarket chain Sun Art and department-store operator Intime. The decision to sell its gaming unit is part of the same broader strategy.

A New Chapter for Lingxi Games

Guangzhou-based Lingxi Games is best known internationally for its strategy game Three Kingdoms: Strategy Edition, which was developed in collaboration with renowned Japanese game developer Koei Tecmo.

The company's fundraising plans had stalled in 2023 amid tighter Chinese government restrictions on the gaming industry. However, the gaming market has since begun to recover.

Company officials expect the involvement of TruStar Capital to give the studio an opportunity to expand its business and begin a new phase of growth.

//DBTech/BMT/OR//