Netflix’s ambitious push into the gaming industry has suffered another significant setback, as the streaming giant announced the closure of two more internal game development studios. Moonloot, a Helsinki-based studio that had yet to release a single title, and Night School Studio, the acclaimed developer behind the critically praised Oxenfree series, are both being shuttered. The news, first reported by Stephen Totilo at Game File, marks yet another retreat in what has become an increasingly troubled gaming venture for the entertainment company.
Night School Studio had just released its latest project, Unhinged, an innovative 30-minute first-person horror experience that debuted in June. Despite Netflix co-CEO Greg Peters acknowledging that the game achieved “solid numbers,” the company moved quickly to close the studio. Netflix expressed gratitude for Night School’s contributions, stating they appreciated the studio’s work “in pushing the boundaries of storytelling through games.” The closure raises serious questions about Netflix’s commitment to gaming and its ability to sustain creative development teams.
A Pattern of Studio Closures and Strategic Uncertainty
The shutdowns continue a troubling pattern for Netflix Games. In 2024, the company closed Team Blue, an ambitious studio staffed by veteran developers from franchises like Call of Duty and Halo, which was working on a high-end first-person shooter. That same year, Boss Fight Entertainment, which had developed a mobile game based on the wildly popular Squid Game franchise, was also shut down. In December 2025, Netflix sold Spry Fox, known for cozy gaming experiences, back to its original founders. Additionally, Delphi Interactive, which created the Netflix FIFA game for the World Cup, had to lay off 85% of its contractor staff at Refactor Games after Netflix ended funding.
Much of the current turmoil appears connected to the strategic vision of former Netflix Games head Mike Verdu, who led the division from 2021 to 2024. Verdu’s approach emphasized building and acquiring internal studios with a strong focus on mobile gaming. Under his leadership, Netflix acquired Night School Studio in Los Angeles in 2021 and Moonloot in Helsinki in 2022. However, since Verdu’s departure, the company’s gaming direction has shifted dramatically under new leadership.
New Leadership, New Direction for Netflix Gaming
Alain Tascan assumed control of Netflix’s gaming division in 2024, bringing a fundamentally different vision for the platform’s gaming future. Rather than continuing Verdu’s mobile-first strategy, Tascan has pivoted toward cloud-based gaming experiences designed for televisions and personal computers, with smartphones serving as controllers rather than primary gaming devices. Unhinged, Night School’s final release, exemplified this new approach. The company has indicated particular enthusiasm for the momentum building around cloud games and children’s gaming experiences.
Despite the studio closures, Netflix maintains that gaming remains a priority. “Games continue to be an opportunity for us to expand the variety of entertainment we offer Netflix members, and we’ve built solid foundations in our key focus areas,” a company spokesperson stated. The current gaming portfolio spans several categories: Kids (Netflix Playground), Party (Netflix Minigolf), Narrative (Unhinged), and Mainstream (FIFA World Cup: Launch Edition). Netflix’s last remaining internal studio is Helsinki-based Next Games, which specializes in couch-centric party games designed for group play.
The Broader Context of Streaming Services in Gaming
Netflix’s gaming struggles reflect broader challenges facing entertainment companies attempting to enter the competitive gaming market. The gaming industry, valued at over $200 billion globally, has attracted numerous non-traditional players seeking to diversify their offerings. However, success in gaming requires different expertise, longer development cycles, and tolerance for the creative risks inherent in game development. Major gaming publishers spend years and hundreds of millions of dollars developing blockbuster titles, and even experienced studios regularly face cancellations and closures.
The streaming giant first launched its gaming service in November 2021, offering mobile games to subscribers at no additional cost. The strategy aimed to increase subscriber engagement and reduce churn by providing additional value beyond film and television content. However, adoption has remained modest compared to Netflix’s core streaming audience of over 260 million subscribers worldwide. Industry analysts have noted that most Netflix subscribers either remain unaware of the gaming offerings or have shown limited interest in mobile gaming experiences delivered through a streaming platform.
For the talented developers affected by these closures, Netflix expressed appreciation. “We are incredibly grateful to the talented colleagues we’re saying goodbye to today. We thank them for all their contributions to Netflix, and wish them the best,” the spokesperson said. The exact number of jobs lost has not been disclosed. As Netflix continues to refine its gaming strategy, the industry will be watching closely to see whether the company can find a sustainable model or whether gaming will ultimately prove to be an expensive distraction from its core entertainment business.
Expert Opinion: Netflix’s continued studio closures suggest a fundamental misalignment between traditional entertainment company expectations and the realities of game development. The pattern of acquiring studios, allowing them to complete one or two projects, then shutting them down indicates Netflix may be applying television production metrics to an industry that operates on entirely different timelines and success criteria. Unless Netflix commits to longer development cycles and accepts the inherent unpredictability of game creation, their gaming division will likely continue to struggle regardless of strategic pivots.
