- Potential deal could value game developer at up to $1.3 billion
- Move would extend Alibaba’s push to shed non-core assets and double down on AI
Alibaba Group is exploring the sale of its gaming subsidiary Lingxi Games (灵犀互娱) in a deal that could value the business at 7 billion to 9 billion yuan ($1 billion to $1.3 billion), according to market chatter circulating in China.
This comes as the e-commerce and cloud computing giant continues to streamline operations and focus resources on AI and cloud computing.
The Guangzhou-based company has approached at least five potential buyers, industry sources said.
If completed, the transaction would mark another significant step in Alibaba’s ongoing effort to divest non-core assets following the sales of department store operator Intime and supermarket chain Sun Art Retail.
Lingxi Games is Alibaba’s only large-scale in-house game development business. The unit employs about 1,200 people and also operates the 9game and Trading Cat gaming platforms.
Hard to replicate success
Its flagship title, Three Kingdoms Strategy Edition (《三国志·战略版》), has attracted more than 100 million players globally, though the company has struggled in recent years to replicate its success with a major new hit.
According to multiple industry sources, the interested parties include four listed gaming companies — 37 Interactive Entertainment (三七互娱), Ruyi Holdings (儒意控股), Century Huatong (世纪华通) and Giant Network (巨人网络) — as well as a consortium backed by two undisclosed private equity firms.
Alibaba and the reported bidders had not publicly commented on the matter as of publication.
Lingxi’s place within Alibaba has shifted repeatedly over the years, moving between the company’s digital entertainment division, an independent business group and, later, the “N” category under Alibaba’s “1+6+N” restructuring plan.
Focusing on AI, cloud
Despite several organizational changes, the unit has largely remained outside the group’s strategic core.
In 2024, then-digital entertainment chief Fan Luyuan sparked controversy internally when he reportedly described Lingxi as a business that “never had Alibaba’s DNA from the beginning.”
The potential sale comes as Alibaba has been doubling down on investment in AI. This year, the company established the Token Foundry business unit under the direct oversight of CEO Eddie Wu.
It also introduced a series of AI products, including the HappyHorse video-generation model and its Qwen-Robot embodied AI models, underscoring its focus on AI and cloud infrastructure as future growth engines.
