Update: A Disney spokesperson has told Develop that all current in-development titles are "under evaluation", so Star Wars 1313 has not been cancelled just yet.
We have also been informed that some LucasArts staff will be moving to Disney Interactive, while a team will also stay on board at the company as part of its licensing team.
Original story: Long-standing developer LucasArts been closed by Disney.
The internal development team has now been disbanded, and Disney has said it will now license Lucas property such as Star Wars to external developers.
As a result, layoffs have been enacted across the organisation.
It also likely means that the upcoming Star Wars 1313, which won many plaudits at last year's E3, has been cancelled.
"After evaluating our position in the games market, we've decided to shift LucasArts from an internal development to a licensing model, minimizing the company's risk while achieving a broader portfolio of quality Star Wars games," read a statement from Disney.
"As a result of this change, we've had layoffs across the organization. We are incredibly appreciative and proud of the talented teams who have been developing our new titles."
LucasArts, which was founded almost 30 years ago, originally as LucasFilm Games, was acquired by Disney in October last year as part of its $4 billion purchase of parent company LucasFilm.
At the time, a LucasArts spokesperson told Develop that it was "business as usual" for the studio, and that the team was "excited about all the possibilities that Disney brings".
It was not long however before questions were raised about the developer, with Disney CEO Robert Iger later stating that company would likely focus on social and mobile rather than console, although he suggested it would look at the sector "opportunistically".
The decision to finally let the hammer fall on the studio is not surprising, giving the internal struggles at the developer, its lack of output and mediocre reception to recent titles, licensed or internally-developed.
After just two years at the helm, LucasArts president Paul Meegan left the studio last August, later rejoining Epic Games. This was shortly after he led the studio in revealing work on the aforementioned Star Wars 1313 E3 demo. But even then the developer insisted it would carry on.
Meegan said at the time: “LucasArts has come a long way and I’m extremely proud of what the teams have accomplished. We had a great E3 with Star Wars 1313, and have other exciting projects in the works. It’s been a privilege to be a part of Lucasfilm. I wish the company all the best.”
His departure also came shortly after Clint Hocking's exit from the studio to join Steam giant Valve.
Many titles such as Star Wars: The Old republic, Kinect Star Wars and LEGO Star Wars have been developed outside of the studio in recent years due in part to large internal structuring.
The developer also struggled to get its own titles off the ground, including The Force Unleashed which, although managing to get a sequel, failed to inspire critics the second time around with an average metacritic score of 61 on Xbox 360 upon its release in 2010, nearly three years ago.