Alibaba Sells Gaming Arm for $1.5B in AI Pivot
Synopsis
Alibaba is selling Lingxi Games to Trustar Capital for a deal potentially worth more than $1.5 billion as it doubles down on AI and cloud computing.
Alibaba's gaming unit will be sold to Trustar Capital, a private equity firm, for no less than $1.5 billion, reports show, restructuring a part of the Chinese firm's operations.
The Alibaba gaming business is going to be sold due to a shift towards artificial intelligence and cloud computing under the leadership of the new chief executive Eddie Wu. The transfer will allow it to focus on its own business, said Zhou Binshu, Lingxi Games' chief executive.
Alibaba gaming unit sale: $1.5 billion deal
The latest Alibaba gaming unit sale decision follows the company's overall restructuring as a result of which Lingxi Games, its subsidiary, gained fame for developing Koei Tecmo-published Three Kingdoms: Strategy Edition multiplayer strategy video game.
The deal would make Lingxi Games' operations independent from Alibaba Group's overseas business activities for investors and Australian and U.S. partners. As of March 31, 2026, the e-commerce marketplace brand has been operated in more than 200 countries and regions worldwide and is part of the International Digital Commerce Group within Alibaba Group.
The Alibaba Group's international business operations also include Australia as evidenced by the Australian Business Register listing Alibaba Cloud (Australia) Company Pty Ltd as an operating entity and Alibaba E-Commerce (Australia) Pty Ltd as a NSW company.
AI and cloud businesses show stronger growth
For the fiscal year ended March 31, 2026, Alibaba Group reported revenue of RMB1.024 trillion ($148.4 billion) in revenue, following a sale of its gaming arm for $1.5 billion). Revenue for the current year grew by 3% compared to the previous year, while net income fell by 19% to RMB102.1 billion. The Cloud Intelligence Group of Alibaba has generated revenues of RMB158.1 billion or USD22.9 billion, up 34%.
Alibaba's results suggest that external cloud revenue grew 40% in the third quarter of fiscal 2026 and accounted for 30% of revenues from the same period last year.
Meanwhile, the local Chinese market for games also continues to grow, which has prompted the $1.5 billion sale of Alibaba's gaming unit. According to the China Gaming Industry Report for Jan-Jun 2026, domestic sales of games reached RMB188.45 billion in the first half of 2026, an increase of 12.17% year-over-year.
The report estimates the number of game users in China during the same period at 684 million people. Moreover, the domestic games market abroad is also growing, as revenue from Chinese games sold outside the country grew by 30.22% to $12.37 billion.
Thus, the decision to sell off Alibaba's gaming unit is not related to the company's main business of international trade or cloud computing, but to its participation in the Australian and U.S. markets.
Source: Bloomberg
Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
You Might Also Like
Fusion Books: The ‘Practice Round’ That Nearly Broke Melanie Perkins
Nearly 600 employees told roles may be at risk in KPMG audit review
