Disney's Lucasfilm is shutting down its video game development division, LucasArts, affecting its offices in both San Francisco and Singapore.
"After evaluating our position in the games market, we've decided to shift LucasArts from an internal development to a licensing model, minimising the company's risk while achieving a broader portfolio of quality Star Wars games," Lucasfilm said in an official statement on Wednesday.
This means layoffs across the board for the company's LucasArts staff as it cancels two projects in development, Star Wars: First Assault and Star Wars 1313. These games will only be released if another publisher completes them.
However, not all employees will be let go, said Lucasfilm spokesman Miles Perkins to AFP, who debunked the widely-reported figure of 150. He said that a "small team will be left to manage external partners", a number which The Wall Street Journal reports as fewer than 10.
He declined to confirm how many would be laid off by the change.
Rasa Buckley, the communications manager for Lucasfilm Singapore, also was unable to specify how many employees here would be affected.
She clarified to The Business Times that only the games division would be affected; the rest of the divisions at the Singapore studio (Lucasfilm Animation and Industrial Light & Magic) will continue operations.
Media reports quoted Ms Buckley as saying that the company was doing all it could for those who would be laid off, including transfers to other positions in Lucasfilm if they were available. She told The Business Times that such actions also included outplacement activities like résumé workshops and a job fair.
Lucasfilm Singapore as a whole employs more than 400 people, said Ms Buckley, while the company employs more than 1,800 people in total, as Mr Perkins told AFP.
This shutdown comes after Disney's acquisition of Lucasfilm last year for US$4.05 billion. Disney has its own interactive games division, and is currently undergoing an internal cost-cutting review.
The iconic game developer and publisher has struggled in recent years. Video game blog Kotaku cites its last mainstream hit as being in 2008, with its last game published in 2010,
Kinect Star Wars, being badly received. It has also been without a president since August 2012.
LucasArts was established in 1982, starting production in Singapore in 2007.