The company intends to focus on licensing its Star Wars brand externally, a spokesperson said on Wednesday.
The closure will involve an unknown number of layoffs. A "small team" will remain to handle licensing partnerships but all inhouse development has been halted, including its much-anticipated title Star Wars 1313, said Miles Perkins, a spokesperson for Lucasfilm Ltd.
Film producer, screenwriter and director George Lucas is best known as the creator of the Star Wars franchise. He sold Lucasfilm to Disney last October. It is unclear how many people are employed by LucasArts.
A source close to the company said that affected workers will be informed on Wednesday.The Lucasfilm spokesperson declined to disclose the number of employees currently at LucasArts or those affected by the shutdown.
Disney, which last year announced it will pay $4.05-billion for Lucasfilm and has its own interactive games division, is several months into an internal cost-cutting review.
The decision to shutter LucasArts comes as the developer and publisher, once known for humour-tinged adventure games like Secret of Monkey Island, has struggled in recent years to produce a hit in an industry increasingly dominated by action-oriented games. – Reuters