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LucasArts To Lay Off Most of Staff; Will Cease Game Creation

Disney wants LucasArts to focus on licensing games

Disney has taken Lucasfilm out of the videogame business, ceasing videogame production at LucasArts, a major producer of games for the past 30 years.

LucasArts will now focus on licensing its intellectual property to developers, handing off the task of making “Star Wars” videogames. In transitioning to this new model, the company wil lay off the majority of its staff, keeping a small team that will handle licensing.

The company would not disclose how many staffers are laid off, but according to a dated page of comany facts, LucasArts employed more than 350 people. More than 200 people will lose their jobs, according to The Wall Street Journal's Ben Fritz.

“After evaluating our position in the games market, we’ve decided to shift LucasArts from an internal development to a licensing model, minimizing the company’s risk while achieving a broader portfolio of quality Star Wars games,” LucasArts said in a statement. “As a result of this change, we’ve had layoffs across the organization.  We are incredibly appreciative and proud of the talented teams who have been developing our new titles.”

The company dates to 1982, when George Lucas founded it as an offshoot of LucasFilm. Its first games were made in collaboration with Atari under the Lucasfilm Games name. The company adopted the name LucasArts in the early 1990s right around the time it began making games based on "Star Wars."

LucasArts has also made games based on the "Indiana Jones" film franchise, but "Star Wars" remained its most successful and reliable source of new products. The company was at work on two new games, "Star Wars 1313" and "Star Wars: First Assault," both of which will cease production. An outside developer could still resurrect them.

The closing of the legendary gaming division comes less than a year after Disney shelled out $4.06 billion for Lucasfilm. According to an individual with knowledge of the decision, a major factor was LucasArts' history making games for consoles.

Console games are far more expensive to make, and the individual dubbed the company's business model unsustainable. The videogame industry continues to adjust to a world where almost everyone has a smartphone, and Disney has catered its gaming strategy around mobile offerings.