George Lucas is noted for financing new techniques/technologies in audio at Skywalker Sound and visual effects at Industrial Light & Magic (ILM), in an effort to advance digital filmmaking.
LucasArts was located a few miles from ILM and Skywalker Sound, yet the three organizations did not collaborate until 2002's "Star Wars: Bounty Hunter". Even with this release, the bilateral work was limited to in-game cinematics rather than a true sharing of technical expertise.
In 2003, the germination of a full collaboration between LucasArts and ILM began to take shape in the most innocuous way: during a chance visit by LucasArts engineers to an ILM Research and Development annual open-house event.
The open house was very much like a visual effects science fair. Invitations were distributed throughout the Lucasfilm companies, but only a handful of LucasArts employees attended the events. Among them was senior engineer Nick Porcino, who took great interest in one of the projects on display, ILM's proprietary toolset, known as Zeno. Based on what he saw at the open house, Porcino felt that Zeno could be leveraged for use at LucasArts as a foundation for the tools necessary to build cutting-edge, next-generation video games. In late 2003, Porcino and ILM's director of research and development Steve Sullivan were discussing technologies that LucasArts and ILM could share when the idea came up of building an integrated "virtual studio" (which ultimately led to the plan to create the Virtual Studio for Lucasfilm). Essentially, LucasArts and ILM would integrate their individual tools into one multi-functional tool pipeline.
The resulting proposal was presented to Lucasfilm executives, but full collaboration would need to wait until Zeno could be integrated into the ILM pipeline. By late 2004 however, LucasArts and ILM engineers were actively consulting with one another, creating the foundations for LucasArts' new game development pipeline. In 2005, ILM and LucasArts relocated to Letterman Digital Arts Center in San Francisco's Presidio; at this point, the collaboration became much more focused and intense, with ILM and LucasArts engineers sharing knowledge, techniques, and even office space in order to create a graphics renderer that could be shared across both companies and a game editor (known as "Zed," short for "Zeno Editor").
The first game to take advantage of this tools collaboration would be "Star Wars: The Force Unleashed"...