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Disney shuts down LucasArts, 'Star Wars 1313' fate unknown

Star Wars 1313

Less than a year after acquiring the primary video game branch of the legendary “Star Wars” franchise, Disney is closing LucasArts Entertainment Company.

According to a statement originally obtained by Game Informer, Disney is closing down LucasArts in order to move the company away internal game development, choosing instead to license the “Star Wars” IP out to a wider variety of third party developers than was presumably available in-house.

"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,” the statement read. “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 fate of the upcoming action-adventure game “Star Wars 1313,” along with the full extent of the current layoffs from LucasArts, is unclear. The video game website Kotaku is reporting that LucasArts has laid off 150 employees so far and has cancelled “1313,” but another report from Game Informer claims that a representative from the company still thinks the game could come out through a licensing agreement.

The news comes after several years of diminishing returns for the struggling game developer. Despite the iconic stature of “Star Wars” in pop culture today, LucasArts’ core business strategy of developing and licensing games based on the popular sci-fi franchise has steadily declined in sales and critical reception. One of the most recent big-budget reboots of the franchise—BioWare’s massive multiplayer online role playing game (MMORPG) “Star Wars: The Old Republic”—was meant to be Electronic Arts’ response to the unprecedented success of Activision Blizzard’s “World of Warcraft” series. But after opening to initial praise from game critics and fans, the series failed to attract a significant audience to recoup EA and BioWare’s six year-long, $200 million investment, and the game was eventually turned into a free-to-play title in the hopes of drawing in more players.

As a developer, LucasArts has also struggled to retain top talent from competitors in the industry. The company attracted skepticism in the summer of 2012, for instance, when famed game industry veteran Clint Hocking (who had joined LucasArts after working on the “Splinter Cell” and “Far Cry” franchises) left his position without a single “Star Wars” game to show for his two years as a creative director.

Disney acquired LucasArts, along with Lucasfilm, last October for $4.05 billion.

Yannick LeJacq is a contributing writer for NBC News who has also covered games for Kill Screen, The Wall Street Journal and The Atlantic. You can follow him on Twitter at @YannickLeJacq and reach him by email at ylejacq@gmail.com.