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Disney Halts Game Development at Lucasfilm in Licensing Push

April 3 (Bloomberg) -- Walt Disney Co. is halting video-game development at its recently acquired Lucasfilm division in an effort to cut costs.

Disney, the world’s largest entertainment company, will focus on licensing “Star Wars” content rather than developing games internally, Miles Perkins, a Lucasfilm spokesman, said.

Disney acquired Lucasfilm, the business founded by director George Lucas last year for about $4 billion. LucasArts, the company’s video-game unit, was established in 1982 and its catalog has included titles such as “Lego Star Wars” and “Star Wars Battlefront,” according to its website.

Moving from internal development to licensing is designed to minimize “risk while achieving a broader portfolio of quality Star Wars games,” the company said in a statement. “As a result of this change, we’ve had layoffs across the organization,” according to the statement.

Perkins declined to say how many Lucasfilm jobs will be affected. The company employs more than 1,800 people in San Francisco and other locations, he said. Lucasfilm is looking for external partners to complete games currently in development such as “Star Wars 1313,” he said.

Disney, based in Burbank, California, fell less than 1 percent to $57.25 at the close in New York. The shares are up 15 percent this year.

The decision was reported earlier by the website GameInformer.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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