Alibaba has agreed to sell its gaming division Lingxi Games to investment firm Trustar Capital for more than $2 billion, Reuters reports, citing sources familiar with the transaction.

The figure represents a substantial markup from the division's initial valuation. Early talks, which local Chinese media reported roughly a month ago, priced Lingxi Games at between 7 and 9 billion yuan — roughly $1 billion to $1.33 billion. Alibaba ultimately decided to raise the asking price before settling on the final number above $2 billion.

What does the deal change for Alibaba?

The sale fits a broader portfolio shift at the Chinese tech giant. According to Reuters' sources, Alibaba is reassessing its non-core assets as part of a change in business strategy, and the corporation now prioritizes cloud technologies and artificial intelligence over video games. Divesting Lingxi Games follows that logic directly.

For Alibaba, the transaction converts a gaming asset into capital that can support its cloud and AI ambitions. The company originally acquired the studio in 2017, when it was known as Guangzhou Ejoy, paying $1 billion. If the reported sale price holds, Alibaba exits with roughly double its initial investment, plus eight years of operating revenue from the division's catalog.

What does Lingxi Games bring to the buyer?

The division's flagship title is Three Kingdoms Tactics, a mobile strategy game set in Ancient China, released two years after the 2017 acquisition — in 2019. The game remains Lingxi Games' core product and the anchor of its valuation.

For Trustar Capital, an investment firm rather than a traditional games publisher, the deal means taking ownership of a live-service mobile strategy title with a proven, long-running monetization track record in the Chinese market. The mechanics of that business — session-based strategy gameplay built on the Three Kingdoms license and sustained by in-game purchasing — will now operate under new ownership.

How did the valuation move?

The price gap between the early estimates and the final figure is the most notable operational detail in the report:

• Initial valuation: 7–9 billion yuan ($1–1.33 billion), per earlier local media reports
• Final reported sale price: over $2 billion, per Reuters sources
• Alibaba's original 2017 purchase price: $1 billion

That trajectory suggests competitive interest in the asset during the negotiation period. Rumors first surfaced a month ago, with local media reporting that Alibaba was in talks with several companies and that no final decision had been made. Reuters now reports the sale is going ahead.

Who has confirmed what?

Nobody, officially. Alibaba, Lingxi Games and Trustar Capital have all declined to comment on the Reuters report. All figures and deal terms cited here come from Reuters' sourcing and earlier local media reports, and the transaction terms remain unconfirmed by the parties involved.

The reported buyer, Trustar Capital, is an investment firm, which raises the question of how the new owner will structure Lingxi Games' operations — whether as a standalone entity, a portfolio holding, or a candidate for future resale. The studio's development roadmap under new ownership has not been disclosed.

What happens next?

Watch for an official announcement from Alibaba or Trustar Capital confirming the transaction and disclosing final terms. The deal's closing, and whether Three Kingdoms Tactics' live operations see any changes in publishing, monetization or platform strategy afterward, will signal how Chinese tech majors' gaming divestments land in practice.