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LucasArts Lays Off Staff, Halts Game Production

Company to keep small team to handle licensed games.

Lucasfilm is getting out of the videogame-making business.

LucasArts has laid off all its game development and support staff, with a small team remaining to handle licensed products like the Lego “Star Wars” franchise.

Company declined to disclose just how many individuals were pinkslipped or will be involved in the layoffs, but it had around 150 on staff.

“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.”

LucasArts opened its doors in 1982, and while it’s produced games like “Manic Mansion,” “The Secret of Monkey Island” and several based on the “Indiana Jones” franchise, it’s succeeded more with its “Star Wars” titles including “Star Wars: Knights of the Old Republic,” “Star Wars: The Force Unleashed” and “Star Wars: The Old Republic,” a massively multiplayer online role-playing game that was the most expensive game produced when it launched in 2011, with a $150 million pricetag, but has struggled to generate a large fanbase.

With the layoffs, LucasArts is no longer working on “Star Wars 1313,” but still hopes to finish the game with another developer. “Star Wars: First Assault” has also been canceled.

The layoffs are taking place as Disney is focusing its interactive business on social media and mobile games. After paying $4.06 billion for Lucasfilm last year, it was only a matter of time before the home of “Star Wars” also took that approach. Games group’s next high-profile release is “Disney Infinity,” which bows August and is the Mouse House’s answer to Activision’s “Skylanders,” incorporating action figures that interact with a videogame.

It also comes as LucasArts has seen its revenue from games rapidly decline over the years. It collected $173 million from sales in the U.S. in 2006, but just $55 million last year, NPD Group said.

Disney also has been quick to work with Lucasfilm’s other divisions, hiring J.J. Abrams to direct a seventh “Star Wars,” dated for 2015, and pulling the plug on its “Star Wars: The Clone Wars,” ending its run on Cartoon Network, so that Lucas’ animation team can start producing new shows for Disney XD.

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