Disney has shut down LucasArts and cancelled the two Star Wars games currently in development.
Both Star Wars 1313 and the unannounced Star Wars: First Assault have been canned, but hold a remote possibility of being licensed to another publisher and developer.
Kotaku reports that 150 people lost their jobs as a result of the closure.
The LucasArts brand will still be used to license games to other publishers and developers, but as a studio, it's dead.
"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. As a result of this change, we've had layoffs across the organisation. We are incredibly appreciative and proud of the talented teams who have been developing our new titles," a spokesperson told Game Informer.
It follows Disney's $4 billion acquisition of LucasFilm last year and the announcement of Star Wars Episode VII to hit cinemas in 2015.
LucasArts was founded in 1982 and is best known for developing most of the Star Wars games. While that was its focus in more recent times, its first game was the Atari published Ballblazer. LucasArts also developed the renowned Monkey Island series.
By Ben Salter