SINGAPORE — The local games industry will lose one of its most well-known names, after Disney announced that it was shutting down LucasArts — part of Lucasfilm Singapore which opened here in 2004 to great fanfare — with 150 lay-offs worldwide expected.

Lucasfilm declined to say how many staff here were affected, but TODAY understands from an employee, who did not want to be named, that the move would affect about “50 to 70” staff in Singapore.

Lucasfilm has two other divisions here, ILM Singapore and Lucasfilm Animation Singapore. They will move into their Sandcrawler premises at one-north later this year.

The news comes after Disney bought out Lucasfilm last October for US$4.05 billion (S$5.01 billion). Disney, which has its own game studio Disney Interactive, is currently in the midst of a cost-cutting review.

LucasArts had its heyday in the 1980s and 1990s when it published such titles as Star Wars: X-wing vs Tie Fighter and Full Throttle. The Singapore studio last worked on Star Wars: The Force Unleashed 2 in 2010.

However, a string of flops in recent years have left the studio with not much to show.

Lucasfilm Communications Manager Rasa Buckley said in an statement yesterday that after evaluating the studio’s position in the games market, it decided to shift from “internal development to a licensing model”.

She confirmed that in-house development of titles, such as the highly anticipated Star Wars title 1313, have been stopped, and development rights may be transferred to external parties.

One ex-employee who was laid off yesterday said he was saddened and surprised by the closure, which was announced to staff at a meeting yesterday morning — after the news had already broke.

The ex-employee, who spoke on condition of anonymity due to non-disclosure agreements, said the studio was almost finished with a game, and some staff were preparing for a break.

When Lucasfilm opened its studio here, its first and only outside the United States, it was touted as the “beginning of a whole new industry”, as then-Second Trade and Industry Minister Vivian Balakrishnan put it.

It also spun off specialty schools offering digital arts and animation programmes.

Industry players said the closure should not be seen as a sign of doom despite similar problems elsewhere. Game giant THQ closed in January and Electronic Arts had to shelve unpopular titles last year after dismal sales.

Media Development Authority’s Assistant Chief Executive Officer Yeo Chun Cheng said the local games industry “continues to remain strong, shifting its focus towards development of mobile, social and online games”.

He noted how companies such as gumi Asia and Konami Singapore are still recruiting here. Mobile developer LambdaMu Games, for example, recently saw success with its mobile game Pixel People.

Economic Development Board (EDB) Executive Director for Infocommunications and Media Jayson Goh said the EDB would “work closely” to place affected staff.

Also, Lucasfilm would continue its animation and visual effects-related activities here and the EDB “remains optimistic” about the growth of the interactive and digital media industry here, he said.

Mr Ian Tan, Marketing Manager for Interactive Entertainment Business at Microsoft Singapore, who grew up playing games from LucasArts, said he was shocked at the news, but noted that it was not the end.

“Game studios may close but the talent remains within the industry — either by developers opening their own studios or joining others … So the industry as a whole retains itself,” he said.

However, an industry source, who declined to be named, said the console games industry has been in trouble for the past few years, as consumers moved to more casual titles on mobile phones instead and game makers shift to a more cautious outlook of pumping out surefire hits instead.