Shanghai, December 9th (Xinhua) -- Recently, Fan Luyuan, a partner of Alibaba, Chairman and CEO of Alibaba Entertainment Group, and Chairman and CEO of Alibaba Film Group, made a speech on team culture and business development at an internal meeting of Lingxi Interactive Entertainment, which has attracted widespread attention from society.
In response to this public opinion storm, the outside world has paid more attention to Fan Luyuan's "musketeer" style speech, but to some extent ignored Fan Luyuan's requirements and expectations for Lingxi Interactive Entertainment and Alibaba Entertainment at the meeting——
Within five years, Tencent and NetEase will no longer have their advantages. I hope that within the next eight years, Lingxi Interactive Entertainment can become the third largest game company in China. Within 12 years, it must become the second largest in China. Within the next 15 to 18 years, the entire Alibaba Entertainment Group will become the third largest in the global entertainment industry
Can Lingxi Interactive Entertainment break into the top three in the gaming industry as scheduled amidst fierce market competition? Can Alibaba Entertainment, the company behind Lingxi, continue to explore new growth points and maintain its development advantages?
Can Lingxi Interactive Entertainment continue to perform as a 'dark horse'?
As a newcomer in the gaming market in recent years, after being acquired by Alibaba, Lingxi Interactive Entertainment's current market performance is not bad.
According to data, in the global revenue ranking of Chinese mobile game publishers in October 2024, Lingxi Interactive Entertainment jumped from 14th place to 5th place, doubling its revenue and becoming the biggest "dark horse" of mobile games. Alibaba's first quarter financial report for the fiscal year 2025 also mentioned a significant improvement in Lingxi Interactive Entertainment's operating performance this quarter.
The fifth anniversary of its launch, "Romance of the Three Kingdoms: Strategic Edition," continues its hot trend, with the global player count exceeding 100 million in June of this year. The new version of "3D War" launched during the fifth anniversary of the enterprise in the second half of the year brought a breakthrough in gameplay, helping the game regain its top spot on the iOS bestseller chart.
The Strategic Edition of "Romance of the Three Kingdoms" is the "flagship product" of Lingxi Interactive Entertainment. It was launched on all platforms on September 20, 2019, and entered the top ten of the iOS bestseller list the day after its launch. As of the end of last year, it has almost never fallen out of the top 20 of the iOS monthly bestseller list. In 2023, the revenue of Three Kingdoms · Strategic Edition was 379.6 million US dollars, ranking the 15th in the world, and ranking the fourth in domestic mobile games after Glory of the King (1.48 billion US dollars), Genshin Impact (944 million US dollars) and Collapse: The Skyline Railway (660 million US dollars).
The female oriented mobile game "Ruyuan", which was officially launched on September 26th this year, quickly climbed to the top 5 of the iOS national game bestseller list after its launch, with over 100 million yuan in revenue in the first five days. In October, the revenue of "Ruyuan" surged by 206%, ranking 12th on the current China App Store mobile game revenue chart and driving Lingxi Interactive Entertainment's revenue to double.
The game "The Tree of Saviors: New World", which was just launched in overseas markets in October, quickly topped the App Store and Google Play download charts in Japan, Thailand and other markets, as well as the Google Play download chart in the Korean market on its first day of release, becoming one of the fastest-growing mobile games in global revenue that month. As of now, the daily revenue of "The Tree of Saviors: New World" has exceeded 7 million yuan, with a conservative estimate of over 100 million yuan in first month revenue.
In addition to mobile games, Lingxi Interactive Entertainment's globally released buyout PC game "Soul Face Armor" has also sparked a "soul storm" in the survival sandbox category of games this year. Within 30 hours of its launch, it sold 100000 copies and topped the global hot selling list on Steam, with a cumulative sales of about 500000 copies. Recently, it received a "special review" on the Steam platform, with a high praise rate of 87% in Europe and America.
Lingxi Interactive Entertainment's performance in the second half of this year was decent, but before the release of the three new games mentioned above, due to significant changes in the management team in the past two years, including the departure of veteran players such as Zhan Zhonghui, the company was relatively turbulent, the products were weak, and the growth momentum was not obvious. And this challenge will continue until several new games truly establish themselves this year.
The main reason is that Lingxi Interactive Entertainment has not been able to maintain the trend of frequent explosive releases in launching new games. Last year's new game "Forest Kingdom" made it into the top five of the App Store bestseller list at the beginning of its release with its healing Japanese MMO style, but its momentum was insufficient, and the number of players and revenue performance were weak in the future. Games such as "Wind Continent" and "Travel Frog: Journey to China" have never been popular. The other two products on the Three Kingdoms IP, "Three Kingdoms Fantasy Continent" and "Three Kingdoms War Chess Edition", have further enriched the game product line of the Three Kingdoms IP, but have not brought much traffic, and their market effect is far inferior to "Three Kingdoms Strategy Edition".
Overreliance on the single IP of "Three Kingdoms: Strategic Edition" has resulted in a lack of diverse product lines and a lack of diversified sources of revenue. Once the market performance of the game declines, it will have a significant impact on the overall performance of Lingxi Interactive Entertainment.
In an internal meeting, Fan Luyuan did not shy away from this and made it clear that "although we have some so-called innovative games, how much impact does it have on Lingxi? Actually, we still mainly rely on 'Three Battles' (Strategic Edition of Three Kingdoms).' Three Battles' has been five years, and a game without innovation for five years is very dangerous. We cannot afford to rely on old knowledge
With the increasingly fierce competition in the gaming industry, in addition to gaming giants such as Tencent and NetEase, the development momentum of new brands such as miHoYo and Lilith is particularly strong. To become the third largest gaming company in China within 8 years, the path of Lingxi Interactive Entertainment is long and arduous.
Alibaba Entertainment is facing the dilemma of diversification
Alibaba Entertainment, which Fan Luyuan is directly responsible for, has not performed as expected in recent years.
According to the financial report data released by Alibaba Group, the revenue of Alibaba Entertainment has shown a downward trend in recent years. For example, in the third quarter of 2024 (i.e. the second quarter of the 2025 fiscal year), Alibaba Entertainment's revenue was RMB 5.694 billion, a year-on-year decrease of 1%. Although the year-on-year loss has narrowed in terms of profit, it is still in a state of loss.
Alibaba's entertainment industry covers multiple fields such as gaming, audiovisual, and video, and each sub sector faces significant challenges.
Taking the video industry as an example, currently Tencent Video, iQiyi, Youku, Mango TV, and Bilibili account for nearly 90% of the online audio-visual market share. However, specifically speaking, compared with Tencent Video and iQiyi, Youku has certain gaps in market share, user activity, content popularity, and other aspects.
From the perspective of monthly active users, Tencent Video and iQiyi remain in the top two in terms of user size, with 377 million to 386 million and 360 million to 394 million respectively. However, Youku, a subsidiary of Alibaba's Big Entertainment, continues to decline to about 197 million to 199 million, only about half of Tencent Video and iQiyi. Starting from mid May 2024, the daily active users of Youku have fallen below 30 million, which is less than half of Tencent Video and iQiyi. From the perspective of user stickiness, Youku's average user time is also significantly lower than that of Tencent Video and iQiyi.
In the music industry, Alibaba's Xiami Music, under the pressure of applications such as NetEase Cloud Music and QQ Music, ceased operations in 2021.
Alibaba Pictures is one of the best developed segments in Alibaba's entertainment industry. According to Alibaba's Q2 financial report for the 2025 fiscal year, Alibaba Pictures' revenue was 3.05 billion yuan in six months, a year-on-year increase of 17%; The profit attributable to the owners of our company was 336 million yuan, a year-on-year decrease of 27%.
Its revenue growth mainly comes from the performance and ticketing fields. After Alibaba acquired Damai in November last year, it brought new growth space to Alibaba. According to the financial report data, the revenue of ticketing and technology platforms during the reporting period was 1.226 billion yuan, a year-on-year increase of 138.5%. After deducting the sales and service costs of this business and the sales and marketing expenses allocated to related divisions, the performance was 790 million yuan, a year-on-year increase of 285.3%. During the reporting period, barley achieved a high-speed growth of over 50% in Gross Merchandise Volume (GMV); At the same time, in the field of live performance services, Damai has provided over 2000 service projects and served more than 25 million people.
On the contrary, the content business area that Alibaba Pictures has focused on in the past has performed poorly, with revenue of 1.224 billion yuan during the reporting period, a year-on-year decrease of about 17.3%. After deducting the sales and service costs of this business and the sales and marketing expenses allocated to related divisions, there is only 28.63 million yuan left, a year-on-year decrease of 92.4%.
Alibaba Pictures stated that the dual decline in box office revenue and viewership has posed complex profit challenges for film companies. How to create more high-quality movies, attract those who have left the cinema to return, increase the number of moviegoers, and use AI technologies such as virtual filming to reduce costs and improve efficiency, thereby enhancing the profitability of the film industry, are the opportunities and challenges faced by Alibaba Film and all film professionals.
Therefore, although still one of the market leaders, the development status of the entire Alibaba Entertainment Group is not optimistic. Under heavy pressure, there are still many urgent problems to be solved in order to maintain the development advantages of the past, explore new performance growth points similar to barley, achieve diversified development, and promote Alibaba Entertainment to truly become the third largest player in the global entertainment industry in the next 15 to 18 years.