Trustar Capital nears $1.5B acquisition of Alibaba's Lingxi Games
What's the deal? Asian private equity firm Trustar CapitalDealroom has a profile for this one. Try Dealroom → is closing in on an agreement to acquire Lingxi GamesDealroom has a profile for this one. Try Dealroom →, the video game division of Alibaba GroupDealroom has a profile for this one. Try Dealroom →, in a transaction that could value the business at more than $1.5bn, according to Bloomberg. Trustar has emerged as the preferred bidder, beating rivals that included strategic buyers from the gaming industry.
Not done yet: Discussions remain ongoing, and a final agreement has yet to be reached. Lingxi Games and Trustar Capital have not responded to requests for comment.
What does Lingxi do? Lingxi is best known for Three Kingdoms: Strategy Edition , a multiplayer strategy title developed with Japanese firm Koei TecmoDealroom has a profile for this one. Try Dealroom →. Launched in 2019, the game has amassed over 100 million registered users and long ranked among China's top-grossing mobile titles. It is a mature business with stable cash flow rather than an explosive grower.
Why now? The potential sale forms part of Alibaba's wider effort to streamline its portfolio under chief executive officer Eddie Wu. The Chinese technology group has been cutting exposure to non-core businesses while directing more resources towards artificial intelligence and cloud computing.
The price: Alibaba was previously reported to be seeking as much as RMB9bn ($1.3bn) for Lingxi. A transaction above $1.5bn would be more lucrative than those earlier expectations.
Track record: Alibaba has already pursued a series of asset disposals under the strategy. It sold its interest in Sun Art Retail GroupDealroom has a profile for this one. Try Dealroom → to private equity firm DCP CapitalDealroom has a profile for this one. Try Dealroom → for about $1.6bn in 2025.
The signal: The deal underscores how China's biggest technology groups are shedding entertainment assets to concentrate on AI. For Lingxi, whose reporting line shifted to Alibaba's chief financial officer in August 2025, private equity ownership could resolve a long-running question over how a self-developed game studio fits inside the Alibaba system.
Read more: 36Kr · Private Equity Wire
Image credit: Generated with Gemini
