Following reports of a new wave of lay-offs at its game division, LucasArts outlined its new strategy to the public. Jim Ward, who was appointed president of the division in May, explained that following a close examination, he concluded major changes were in order to put LucasArts on a long-term growth course. To accomplish this aim, 31 employees were laid off and Peter Hirschmann, producer of Star Wars: Battle Front and Star Wars: Mercenaries, has been appointed vice president of product development.

Hirschmann joined LucasArts from Electronic Arts, where he worked as a producer two years ago. Among the laid off staffers were also those forming the project team working on the early stages of Knights of the Old Republic III. Furthermore, LucasArts will downsize in-house game development and has subsequently sourced out the development of its so far untitled Stars Wars Episode III game to the Newport Beach, California-based developing studio The Collective. The company already has a working relationship with LucasArts, being the developer of Wrath Unleashed and Indiana Jones and the Emperor's Tomb.

• GameSpot