Disney announced Wednesday it will be closing LucasArts game studio transitioning it into a "licensing model."

An official statement this morning states, "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.

"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."

Disney decided they would rather work with external partners for the next "Star Wars" game ending months of speculation about the San Francisco-based developer.

Disney Interactive, the company's video game label in a separate statement says it "looks forward to working with Lucasfilm on new games opportunities that leverage their incredible IP (intellectual property) and brings it to life across gaming platforms."

The development of future projects including the action title Star Wars 1313 has been "halted."

It is part of a plan of Disney to reorganize its games business, to focus on projects such as Disney Infinity that combines video games with collectible figurines players can bring to life as well as titles for the Web and mobile devices.

"Layoffs are going to continue to happen fairly regularly in the video game space as companies figure out how to either re-tool for all the mobile opportunities, or how to re-deploy other assets such as licensing out their intellectual properties," says Digital World Research analyst P.J. McNealy.

Despite the end of LucasArts, the "Star Wars" franchise will not disappear from video games anytime soon.

"With Disney now potentially licensing Star Wars out to external developers, the potential for future great versions of the game will grow," says McNealy. "Any platform, whether it be iOS, Android, Xbox, PlayStation or Nintendo, will always want Star Wars games available."