On July 16, Netflix co-CEO Gregory Peters said this during the Q2 earnings call: "FIFA and Unhinged are our two best-performing cloud gaming launches, with really solid numbers, representing the top tier of our gaming performance." Six weeks later, Night School, the studio behind Unhinged, was confirmed to be shutting down.
According to a report by Game File reporter Stephen Totilo, Netflix is shutting down Night School Studio—the original team behind the Oxenfree series—and also plans to close Moonloot Games, a Helsinki-based studio founded in September 2022 to handle original mobile game development. Netflix's internal game teams will also cut a certain number of positions, though the exact figure hasn't been disclosed. A Netflix spokesperson told Game File that the company is focusing its resources on kids' games, party games, narrative experiences, and mainstream titles like FIFA World Cup: Launch Edition, which launched in June.
Ironically, FIFA World Cup itself hasn't been smooth sailing either. The game, developed by third-party studio Refactor Games, saw its parent company Delphi Interactive pull funding in early August, leading to an 85% layoff. The same titles executives had just praised have now seen their development teams gutted one after another.
The Sweet Promise of 2021
Night School was the first studio Netflix ever acquired, officially bought in September 2021. Just before that, Netflix had decided to break into gaming, using the pitch: "What can we do to let your team pursue its dreams?"—as co-founder Sean Krankel recalled in a 2023 interview at Summer Game Fest. After joining Netflix, Night School's team expanded, moved into Netflix offices, and Oxenfree II: Lost Signals launched day-one with support for 32 languages. Co-founder Adam Hines said at the time that their biggest worry was whether their autonomy would get worn down by a big company's layers of decision-making, "but after talking with Netflix, we felt reassured—it felt like we were speaking the same language when it came to making games."
That reassurance held up for a while. Under Netflix, Night School made Oxenfree II, Black Mirror: Thronglets, and the mobile-controlled horror game Unhinged, which launched about six weeks ago. Between 2021 and 2024, Netflix also acquired Cozy Grove developer Spry Fox, mobile game maker Boss Fight Entertainment, and brought in veterans from Overwatch, Halo, and God of War to build an internal AAA studio—at one point looking like it was serious about making games.
The turning point came in 2024, when Netflix brought in former Epic Games executive Alain Tascan to lead its gaming business. From there, as Game File put it, "everything changed."
With Night School and Moonloot now shut down, Netflix has sold off or closed nearly all of its studios, leaving just two: Next Games, a Helsinki-based studio focused on couch co-op games, and Netflix Games Studio, which mainly handles partnerships with external developers. As for Spry Fox, it bought back its own shares and continues making games independently. Netflix's recent releases, Overcooked! All You Can Eat and the Jackbox party game series, seem to be the only part of this strategy that's still delivering consistent results.
