Game Informer has learned that Disney is closing its LucasArts game publishing subsidiary. We received an email from a LucasArts representative confirming the news.

The official statement from Disney (which recently acquired LucasFilm and LucasArts) reads as follows:

"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. 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."

In some ways, the news is not a surprise. LucasArts had seemed directionless in recent years. The company's core business of games based on the Star Wars license have been largely disappointing in both quality and sales. While the company had some success with games like Star Wars: The Force Unleashed and the Battlefront series, both of those franchises seemed to have died on the vine. The cancellation of Star Wars Battlefront III was particularly ugly, which led to nasty public fingerpointing between LucasArts and developer Free Radical. The BioWare developed MMORPG Star Wars: The Old Republic (which was co-published with EA) won strong reviews but failed to maintain subscribers, and was eventually forced into instituting a free-to-play business model.

LucasArt's other big franchise, Indiana Jones, has failed to make much of a dent in games in recent years, with the exception of Traveller's Tales LEGO Indiana Jones series that, once again, was not developed by LucasArts. Meanwhile, series like Uncharted and Tomb Raider, which are both heavily influenced by the Indiana Jones films, have thrived.

More recently, LucasArts caused a stir at E3 2012 with an impressive looking demo for a new Star Wars project entitled Star Wars 1313. However, in the months that followed, the project seemed to lose steam, and rumors circulated that the game had ceased production. [Update: Today, a LucasArts representative spoke to us about the future of Star Wars 1313]

The company seemed to have a revolving door of management. In 2004, LucasArts president Jim Ward led a massive restructuring of the company, laying off many development staffers in the process. Ward left in 2008, to be replaced by EA's Darrell Rodriguez, who lasted only two years at the head of the company. Rodriguez's position was ultimately filled by Epic Games' Paul Meegan, who then stepped down in 2012. The company was co-led by Kevin Parker and Gio Corsi until it was acquired by Disney.

During that time, LucasArts attempted to inject new life into its in-house development by bringing in respected industry vet Clint Hocking (who helped lead the Far Cry and Splinter Cell franchises at Ubisoft) in as its new creative director. Sadly, Hocking lasted only two years in the position and left without completing the game he had been working on.

The last game published by LucasArts as a company is the sub-par Kinect Star Wars.

Ironically, many of the games for which LucasArts is best remembered for are not Star Wars games. Its genre-defining '90s adventure games created by Ron Gilbert and DoubleFine's Tim Schafer like The Secret of Monkey Island, Day of the Tentacle, and Grim Fandango are all still celebrated by fans to this day.

Our sympathies go out to those who have lost their jobs today.

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Source: http://www.gameinformer.com/b/news/archive/2013/04/03/disney-closes-game-publisher-lucasarts.aspx