On Oct. 21, EA announced that it was shutting down the beloved game studio BioWare and canceling its new Mass Effect sequel. The news was quite a blow, sparking theories that the studio was shut down because of pressure from Saudi Arabia's Public Investment Fund, which recently bought out EA. Based on reporting from Bloomberg, we now know the main reason the publisher shut down BioWare: Star Wars.
According to reporter Jason Schreier, EA recently received an opportunity to work with Walt Disney Co.'s Lucasfilm on a third Star Wars Battlefront game. As EA executives reviewed the publisher's upcoming portfolio, they found themselves with two sci-fi action games projected to cost hundreds of millions of dollars. The company was already facing immense financial pressure after the PIF's $55 billion buyout. Seeing the Mass Effect game as potentially competing with Star Wars, they chose to shut down BioWare.
Although development on Star Wars Battlefront 3 has not begun yet, these EA executives viewed this game as the less financially risky of the two projects. Given that EA originally acquired BioWare partly because of the studio's Star Wars: Knights of the Old Republic series, the news carries a bit of sad irony.
An EA spokesperson said in a statement that the company had "collectively reached this decision following months of planning, review, and analysis, including careful consideration of evolving business conditions, industry dynamics, and our long-term priorities."
What else contributed to the shutdown?
While the Star Wars deal was the turning point, Schreier points out other factors that led to BioWare's closure. The studio's most recent game, Dragon Age: Veilguard, fell 50% short of sales expectations. Before that, 2017's Mass Effect: Andromeda was quite poorly received, and 2019's Anthem was considered a live-service failure. BioWare's demise was slow and drawn out, with EA whittling away the staff until only 50 employees remained when the studio closed last week.
EA has been criticized for decades for how it manages the studios it acquires. The company has bought and then shut down numerous beloved developers, including Westwood (Command & Conquer), Origin (Ultima, Wing Commander), Pandemic (Star Wars Battlefront, Destroy All Humans), Black Box Games (Skate), and Visceral (Dead Space).
Shortly after BioWare was shuttered, former employees said EA pressured the company to remove a flag that appeared to support LGBTQ+ rights from the in-development Mass Effect Universe. BioWare has long been known for inclusive representation in its games, something that some speculate could have come under fire given EA's new Saudi backing.
Widespread layoffs across the game industry
2026 has been another brutal year for the video game industry. As game budgets continue to balloon, big publishers are doubling down on existing mega series, while leaving nearly everything else in the lurch. Xbox began a "major reset" in July that will result in around 3,200 job cuts in the coming months. The company cut ties with many of its acclaimed studios, including Ninja Theory, Double Fine, Undead Labs, and Compulsion Games. Meanwhile, it moved Obsidian under Bethesda to work on Fallout games, and handed Halo development over to Call of Duty producer Activision. When it comes to the AAA gaming industry, expect even fewer original ideas and more sequels based on "name brands."
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