Alibaba Lingxi is once again rumored to be sold for 1.5 billion US dollars, which may be the reality of China's gaming industry.

Is Lingxi Games really about to change ownership this time?

According to Bloomberg, Asian private equity firm Trustar Capital is close to reaching a deal to acquire the video game business of Alibaba Group Holding Limited. People familiar with the matter said that Trustar Capital has become the most likely buyer of Lingxi Games, with its bid higher than that of other bidders including video game manufacturers. According to them, the transaction could value the studio at more than 1.5 billion US dollars.

Source: Bloomberg

As of press time, Lingxi Games and Trustar Capital have not responded to the request for comment.

Back on June 23 earlier this year, multiple media reported that Alibaba Group was planning to sell its gaming brand Lingxi Games, with an overall asking price of 7 billion to 9 billion RMB (approximately 1.038 billion to 1.335 billion US dollars), which is lower than the selling price revealed in this latest news.

In terms of market valuation and revenue performance, Lingxi Games is not in a stage of explosive growth, but a mature business with stable cash flow and a long-term steady growth curve. As for why it has been frequently reported that the business is up for sale, the reason may lie in Lingxi Games' product lineup and development path.

01

Lingxi's most important cash cow product is *Three Kingdoms: Strategic Edition*.

Launched in 2019, *Three Kingdoms: Strategic Edition* has accumulated over 100 million registered users worldwide to date. It has long ranked among the top of China's mobile game revenue lists on platforms such as Sensor Tower, and is one of the most commercially stable products in the domestic SLG track.

According to data from major third-party platforms, the monthly revenue of this product in 2025 was roughly maintained in the range of 180 million to 250 million RMB. Considering the inherent feature of the SLG category that revenue is mainly driven by "season card packs + new generals", this level of revenue for a product that has been online for 7 years is already a model of long-term operation.

Of course, Lingxi's value and vision go far beyond a single hit product.

Lingxi Games currently has 5 R&D studios (Pingpingwuqi, Pumpkin, Star, Yuan, Innovation) and 2 operation business lines (Jiuyou, Trading Cat).

*Ruyuan*

Among them, *Fantasy Land of Three Kingdoms* and *Fantasy Land of Three Kingdoms 2: Ode to the Hero* are extensions of the Three Kingdoms IP in the direction of card games and derivative creation; *Ruyuan* is its successful attempt at the female-oriented Three Kingdoms theme; other products such as *Tree of Savior: New World* and *Nobunaga's Ambition: Real Battle* are also the achievements of Lingxi's exploration in self-development or publishing.

Judging from the self-developed and operated product matrix, Lingxi Games is trying to build a second growth curve beyond the SLG track. Of course, up to now, the scale of these products is not at the same level as *Three Kingdoms: Strategic Edition*.

*Fantasy Land of Three Kingdoms 2: Ode to the Hero*

Apart from products, Lingxi's internal organization has also undergone changes.

In August 2025, Lingxi Games' reporting line within Alibaba was adjusted from Fan Luyuan, Chairman of the Big Entertainment Business Group, to Xu Hong, CFO of Alibaba Group. In large companies, changes in reporting lines are usually not simple organizational behaviors.

Fan Luyuan once sparked controversy in an internal speech in December 2024, which led many people outside the company to believe that the self-developed game business was difficult to integrate into the Alibaba system. Fundamentally, this controversy is related to the origin of Alibaba's gaming business.

The origin of Lingxi Games is Guangzhou Jianyue (founded by Zhan Zhonghui, former COO of NetEase), which Alibaba acquired for about 1 billion RMB in 2017. After being merged into Alibaba's Big Entertainment business, the brand was upgraded to Lingxi Games. Since its inception, Lingxi Games has been a game company with the genes of the NetEase system, and after being acquired by Alibaba, it may never have fully integrated into the Alibaba system in terms of corporate culture. The line "it does not have the blood of Alibaba" in Fan Luyuan's speech also expresses this long-existing identity gap.

The background of Xu Hong taking over is the 1+6+N business reform that Alibaba is advancing. From the adjustment of non-core assets such as Intime, RT-Mart, to Freshippo, all directions seem to point to the same thing, that is, Alibaba is shifting its focus to areas such as AI and cloud computing.

In other words, is it more important to "make the game business a top player in the industry" or "how much can this business be sold for"? The answer to this question may be glimpsed from the frequent acquisition rumors.

*Three Kingdoms: Strategic Edition*

In June 2026, the news that Lingxi Games was to be sold came out. From expanding its gaming territory by acquiring Lingxi to giving an answer at the capital and strategic level, the time span in between is exactly ten years.

02

The ten years since Alibaba acquired Lingxi Games is, to some extent, a footnote to the rise and fall of the ecological expansion logic of Chinese Internet companies.

Around 2014, the BAT trio all entered the stage of boundary expansion: Tencent extended from social networking to gaming, Baidu moved from search to content, and Alibaba built a super ecosystem covering consumption, entertainment, finance and services around e-commerce. Almost all fields that can occupy users' time, including film, music, sports, literature and gaming, were included in its territory.

Alibaba's logic for developing gaming is not complicated: since users are already shopping on Taobao and making payments on Alipay, theoretically they can also get entertainment, consume and socialize in Alibaba's ecosystem. From agency, publishing to self-development, from acquisition to investment, almost all paths have been tried.

Guangzhou Alibaba office area where Lingxi Games is located

But the game industry later proved that it is not a business that can succeed only by relying on traffic import.

Tencent and NetEase occupy the top positions in the industry not because they have more users, but because they have established a mature R&D system, publishing system and hit product production mechanism. Games are essentially closer to the content industry, which requires creativity, R&D, operation, community building and long-term investment. These capabilities are difficult to replicate quickly through capital or traffic.

From a longer-term perspective, the story of Lingxi Games can be divided into two phases.

The first phase was from 2017 to 2019. Alibaba acquired Guangzhou Jianyue for about 1 billion RMB, and the team with NetEase genes joined the Alibaba system. Three years later, *Three Kingdoms: Strategic Edition* was launched. This Three Kingdoms-themed SLG, which was led by the early team of Lingxi Games, broke the existing pattern of the domestic SLG market at that time, and has long been ranked among the top 10 of the domestic iOS bestseller list. From the product perspective, this is the most iconic hit in the history of Alibaba's gaming business. From the organizational perspective, it is also the most important report card submitted by the Jianyue team within the Alibaba system.

The second phase is from 2019 to the present. The success of *Three Kingdoms: Strategic Edition* has not brought a second phenomenal product of the same level. The entire revenue and profit structure of Lingxi Games mainly revolves around this single product. When a company's valuation increasingly depends on a single product, its valuation logic will gradually shift from a growth-oriented company to a cash flow asset.

And cash flow assets are exactly the type that are most likely to be put on the market for sale.

*Top Clash*

The change of ownership of Lingxi Games is not an isolated case in the industry.

Take Moonton Technology as an example, the developer of the MOBA mobile game *Mobile Legends: Bang Bang* (Chinese server: *Top Clash*), was acquired by ByteDance in 2021, and then resold to Saudi Arabia's Savvy Games Group in 2026, with the valuation of the two transactions rising from 4 billion US dollars to 7 billion US dollars.

Over the past five years, Moonton's representative work MLBB has always been the top MOBA game in Southeast Asia, and even a national-level game in many countries, but it still cannot prevent the company from changing ownership twice.

For Alibaba, 1.5 billion US dollars may be a relatively reasonable valuation range. For Lingxi's employees, this is another reality of the Chinese game industry that "the company belongs to someone else, but the projects are still yours".

This article was first published on "36Kr Games".