Analyst: LucasArts Layoffs About EA, Studio Politics

LucasArts may be saying publicly that its recent mass layoffs were due to development cycles, but at least one analyst says the decision may be more about film studio politics and a new connection with Electronic Arts.

Analyst Michael Pachter estimated that prior to the layoffs, LucasArts had approximately 200 employees, the balance of whom were tasked essentially with liaising between George Lucas' intellectual properties and the only three development studios ever to build games on those properties: BioWare, Pandemic and UK-based Traveller's Tales.

Their primary role, Pachter said, was to ensure proper treatment of the Star Wars and Indiana Jones IP, manage business relationships with the studios, and handle marketing of the properties.

In April, former Electronic Arts LA COO Darrell Rodriguez took over for the recently-departed Jim Ward as LucasArts' president. We can assume Rodriguez still has close liaisons with EA, or at least a confident familiarity with EA's business practices, said Pachter. And with EA now owning two out of three Lucas IP development studios in BioWare and Pandemic, it would appear there is no further need for such a large staff while Rodriguez is on board at LucasArts.

"If I'm Rodriguez and I know that I'm going to do most of my games with EA going forward, then I'm a lot less anal about double-checking everything EA is up to," said Pachter.

An anonymous former LucasArts employee had the same speculation: "My guess: EA cut a deal and is already making Star Wars games! That's just a guess, but on the heels of the Bioware/EA thing and the hiring of EALA's COO as Lucasarts' new President... that math ain't hard to figure."

Film studio politics could be playing a role here too, said Pachter. Traveller's Tales is owned by Warner Bros., and can be expected to focus on making games based on WB properties like Harry Potter in the future. It would be highly unlikely, said Pachter, that WB would allow Traveller's to work on future Indiana Jones games when rival studio Paramount (Indiana Jones And The Kingdom Of The Crystal Skull) would reap the benefits.

In other words, if WB won't be doing any George Lucas films, then a development studio it owns won't be doing any George Lucas games, and that means LucasArts has a limited need to deal with the UK-based studio.

"Why would Paramount want Warner Bros. to mess with their movie?" Said Pachter. "At least EA has a good reputation with the [film] studios and does a good job on the kid-friendly games."

So with a relationship to the UK studio reduced if not eliminated, and with EA's BioWare within a close radius of LucasArts, and with former EA exec Rodriguez at the helm, there's hardly any need for a large staff to handle IP development, said Pachter.

The analyst added, "If I were EA, I would go in to George Lucas and try to buy LucasArts."

When Kotaku spoke to LucasArts earlier today, a representative stressed the publisher's good health and commitment to its internal studio. "We are healthy," she said. "LEGO Indie was launched on seven platforms to positive reviews, The Force Unleashed and Fracture are on track for this fall. We have a good slate of games and we have some good stuff going on in production.

"We are definitely committed to the internal studio."

Despite the layoff of what sources have told us could be up to 80 percent of LucasArts' staff, Pachter doesn't believe the publisher is in dire straits financially, however.

"Don't think about LucasArts as a stand-alone entity that must make a certain profit," he said. "It's wholly owned by George Lucas, and George has more money than God. I would not ever worry about George Lucas being in financial trouble."

Both LucasArts and EA declined to comment.