Is the Force is no longer with LucasArts?

Over the past week, the future of LucasArts has become murky. With last week's layoffs of almost 100 employees, combined with rumors that LucasArts is now closing its development operations and letting go of more employees (which it denies), the game company seems to be headed for some serious downsizing and restructuring.

When LucasArts laid off almost half of its workforce last week, many were confounded by the move. When the company cited development cycles as the reason, many believed that the real reason hid beneath the surface. Wedbush Morgan Analyst Michael Pachter stated that the layoffs may be the result of a deal brewing between LucasArts and Electronic Arts. EA owns two of the major studios, BioWare and Pandemic, that LucasArts currently collaborates with for major Star Wars titles. This combined with the fact that LucasArts' current President Darrell Rodriguez is a former EA executive makes for an interesting theory on the future of LucasArts.

While LucasArts has maintained an internal development studio since its inception more than 25 years ago, it has also acted as a liaison between LucasFilm and other development studios when LucasFilm intellectual property is involved (Star Wars, Indiana Jones). While the list of development studios involved with LucasArts and LucasFilm is a long one, LucasArts has always maintained an active internal development team, producing games based on LucasFilm IP as well as new games and franchise like Grim Fandango and the Monkey Island series.

Despite not having internally developed a game since early 2005 (Star Wars: Republic Commando), LucasArts hadn't showed any signs of slowing down, thanks to the high-profile homegrown title Star Wars: the Force Unleashed. In addition, a brand new IP in Fracture as well as a new Indiana Jones game are slated for release within the next year, and many believed LucasArts to be as strong as ever.

Despite the layoffs, LucasArts has affirmed its commitment to its internal development studio this week. The company recently departed the Entertainment Software Association, the leading trade association of the video game industry, but will take part in the ESA annual E3 event next month in Los Angeles.

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