Netflix Closes Oxenfree Developer Night School Studio in Major Pivot
Key Takeaways
- Netflix has shut down Night School Studio and Moonloot Games, leaving Next Games as its only remaining first-party developer.
- The closures follow the recent shutdowns of Team Blue and Boss Fight Entertainment as Netflix reduces its internal gaming infrastructure.
- Netflix is shifting its gaming strategy away from expensive in-house development toward external publishing partnerships and cloud-streamed television party games.
Why Did Netflix Close Night School Studio After Releasing Unhinged?
Netflix closed Night School Studio to streamline operations and reallocate resources toward cloud party titles, children’s content, and external licensing agreements. Although Night School released the interactive narrative horror game Unhinged to high player engagement six weeks prior, Netflix executives chose to scale back internal development spending in favor of lower-cost external production models.
A Game File report first revealed that Netflix shut down both Los Angeles-based Night School Studio and Helsinki-based Moonloot Games. Netflix representatives confirmed the decision, citing a corporate mandate to focus on specific entertainment verticals.
Night School Studio served as the foundation of Netflix’s video game expansion when the streaming platform acquired the team in 2021. Night School produced Oxenfree 2: Lost Signals, the Black Mirror tie-in title Thronglets, and Unhinged.
Netflix co-CEO Greg Peters praised Unhinged during a recent shareholder call, highlighting strong player participation for the cloud-streamed title. Former Night School staff confirmed on LinkedIn that the entire development team was released despite the recent launch.
Moonloot Games suffered the same outcome. Netflix established the Helsinki studio in 2022 under the leadership of Marko Lastikka. Moonloot was developing an unannounced life-simulation project prior to the shutdown.
BREAKING: Netflix is shutting down two of its game studios (only one left beyond its central team)
— Stephen Totilo (@stephentotilo) August 13, 2026
– Moonloot, which hadn't released a game
– Night School (Oxenfree), which just released Unhinged
Netflix says it still see games as an "opportunity"https://t.co/R6XYXQhXAU
The Downsizing of Netflix’s First-Party Studio Portfolio
The termination of Night School Studio and Moonloot represents the latest reduction in Netflix’s internal video game infrastructure. A Game Developer confirmation verified that Netflix also eliminated additional staff roles across its central gaming teams.
Netflix systematically dismantled most of its wholly-owned game studios over the last two years:
- Team Blue (Closed in 2024): Netflix founded this Southern California studio to develop a high-budget, original AAA action game with industry veterans from Halo and Call of Duty. The studio shut down before announcing a single project.
- Boss Fight Entertainment (Closed in 2025): Acquired in 2022, Boss Fight developed a Squid Game mobile title before Netflix shuttered the studio as part of a portfolio reduction.
- Spry Fox (Divested in December): Netflix acquired the Cozy Grove developer in 2022, but sold the studio back to its original founders at the end of 2025.
- Next Games (Active): Acquired in 2022 for approximately €65 million, the Helsinki studio stands as the only remaining internal developer at Netflix.
Also, learn more about CD Projekt Red laying off developers working on Project Sirius!
How Netflix Is Changing Its Cloud and TV Gaming Strategy
Netflix redefined its gaming roadmap around four core pillars: party games, mainstream titles, narrative experiences, and children’s entertainment. The business model now mirrors Netflix’s television and film production strategy, which relies primarily on external production companies rather than expensive in-house studios.
Netflix observed strong user growth in its casual ecosystem. The launch of the Netflix Playground mobile application for children produced a 600% year-on-year increase in youth engagement.
The company also shifted technical delivery away from mobile downloads toward cloud-streamed games played on televisions and PC monitors. Players use personal smartphones as wireless controllers to play titles like Boggle, Party Crashers, and Netflix Minigolf.
External development partnerships will supply the platform’s major releases going forward. French developer Don’t Nod is currently creating a narrative game based on an established Netflix intellectual property.
Netflix also secured promotional partnerships with major industry publishers, including a timed broadcast arrangement with Take-Two Interactive and Rockstar Games for Grand Theft Auto 6 promotional footage.
A video game enthusiast ever since I first got my hands on a Game Boy. Over the years, I've played many different games across various genres, discovering hidden gems and niche titles along the way. I'm also passionate about technology, always up-to-date with the latest news and insight in the PC and Console market. Ready to share and bring you the latest news !
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