Despite a long history of successful games like 1995’s Dark Forces that were produced in-house, Disney has decided to focus LucasArts on managing the licensing of IP.

APRIL 3, 2013 • Acquired as part of the $4.05 billion buyout of LucasFilm by the Walt Disney Co. last October, LucasArts’ new owners have decided the game division will no longer internally develop new titles moving forward. The status of new content under development, such as Star Wars 1313 and Star Wars: First Assault, is unclear as the developers working on the titles have been laid off. Disney’s new course for LucasArts is a shift from internal development to a licensing model that the studio believes will minimize the Disney’s risk while achieving a broader portfolio of quality Star Wars games. Whether LucasArts will pursue outside studios to finish work on the titles is unknown as Disney did not discuss the status of the games. The last internally developed titles to be released by LucasArts were Force Unleashed in 2008 and Force Unleashed II in 2010.

Impact: Dropping development at LucasArts is not a huge surprise. As we said five months ago, it was difficult to see how LucasArts fit in with the model at Disney Interactive. LucasArts always was a hard company to classify, walking a fine line between developer and publisher, but mainly focused on games based on Star Wars, and to a lesser extent Indiana Jones. The last big hit produced in-house was Force Unleashed almost five years ago. In recent years many of their big products were developed externally by Bioware (the Old Republic games), Traveller Tales (Lego products), Sony Online (Galaxies, the first Star Wars MMO), and others. They weren’t doing much development although Star Wars: 1313 was getting buzz.

With Disney backing away from big budget games for some time, and so little on the internal Star Wars projects plate, it is easy to see the context in cancelling in-house development at LucasArts. The upside for the Star Wars brand is that there still is a LucasArts to oversee licensing of IP, which maintains continuity for the brand. Disney, no stranger to managing IP, could have just as easily done away with LucasArts entirely.

Although LucasArts had its fair share of hit titles over the years, the division’s primary legacy is that it was 1) a good shepherd of the Star Wars IP, and 2) was very successful at promoting the opening up new story lines and characters away from the timelines and circumstances of the films – BioWare’s Knights of the Old Republic being a perfect example.

The main message here is that large media companies are still leery of major involvement in the game business. Disney bought Lucas for Star Wars, LucasArts’ development operations just came along with the package but didn’t really fit into Disney’s strategy.