Alibaba Group Holding has officially confirmed the sale of its wholly owned gaming division, Lingxi Games, to Trustar Capital. The decision was communicated to employees via an internal letter signed by Lingxi CEO Zhou Bingshu on Monday. The divestment marks a significant shift in Alibaba’s corporate structure as the company continues to streamline its operations.

According to the internal communication, the sale is intended to allow Alibaba to sharpen its focus on its primary business pillars: e-commerce and artificial intelligence. By offloading Lingxi Games, Alibaba is effectively exiting the gaming sector to concentrate resources on sectors it deems more central to its long-term growth strategy. Trustar Capital, a private equity firm, will take over the operations of the gaming unit. While the financial terms of the deal were not disclosed in the initial announcement, the move is consistent with Alibaba’s broader trend of restructuring its various business units into more independent entities. This strategy has been a hallmark of the company’s leadership over the past year as they seek to improve agility and operational efficiency in a competitive Chinese tech market.