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In another reshuffle of its video game division, Netflix is closing the first studio it purchased, Oxenfree team Night School, according to Stephen Totilo at Game File. Netflix acquired Night School Studio in 2021, and there it produced Oxenfree II: Lost Signals, the Black Mirror: Thronglets app, and Unhinged, a smartphone-controlled horror game that landed roughly six weeks ago.
Netflix also reportedly plans to shut down Helsinki studio Moonloot Games, which the company founded in September 2022 to build original mobile titles. Additionally, it’s slashing an undisclosed number of jobs from its in-house games team. This is all in the name of prioritizing kids gaming, party games, narrative experiences and mainstream titles like June’s FIFA World Cup: Launch Edition, a Netflix spokesperson told Game File.
The FIFA World Cup game was developed by a third-party studio, Refactor Games, which laid off 85 percent of its staff in early August. The layoffs followed reports that Refactor’s parent company, Delphi Interactive, pulled funding after the game’s release.
In a real salt-rubbing move, Netflix co-CEO Gregory Peters praised Night School’s game Unhinged and FIFA World Cup during the company’s Q2 2026 earnings call on July 16.
“We’ve been building some solid foundations, and now we’re seeing exciting positive signals that help inform and give us increased conviction in our future growth and the nature of that growth here,” Peters said just a few weeks ago. “So you mentioned the cloud-based strategy, those cloud-based TV games, we really see it working. FIFA and Unhinged became our two most successful cloud game debuts, really solid numbers that put it in the top tier of game performance for us.”
Night School co-founders Sean Krankel and Adam Hines were supremely optimistic about the Netflix acquisition when I talked with them at Summer Game Fest 2023, just prior to the release of Oxenfree II. Netflix decided to establish a video game business in 2021, and according to Krankel, that’s when executives wooed the Night School founders with lines like, “What can we do to unblock your team from making your dreams?”
Netflix officially acquired Night School in September 2021. After the purchase, Night School hired more team members and moved into the Netflix offices. In 2023, Krankel and Hines talked about how cool it was to be able to fly in remote workers as needed, and to make Oxenfree II available in 32 languages on day one. The founders discussed how at ease they felt at Netflix.
“Our big concern was the autonomy aspect,” Hines said at the time. “We’ve all worked at bigger studios before, and have just seen and felt how long it would take to get decisions made, how the creative would kind of get choked out of things because there’s too many cooks in the kitchen. But just talking to Netflix a lot before we joined up, we felt really at ease, just like we were talking the same language about how to make games.”
Netflix rapidly expanded its video game division between 2021 and 2024, purchasing a handful of teams including Cozy Grove creator Spry Fox and mobile developer Boss Fight Entertainment, and staffing an internal AAA studio with veterans from Overwatch, Halo and God of War franchises. Then in 2024, Netflix hired former Epic Games executive Alain Tascan to lead its games business, and everything changed.
With this week’s closure of Night School and Moonloot, Netflix has now shut down or sold all but one of its studios. Spry Fox, at least, was able to purchase itself back from Netflix and is still making ambitious, adorable games. The sole survivors at Netflix are Helsinki-based Next Games, which focuses on couch-based experiences, and Netflix Games Studio, which mostly signs deals with external developers.
That group seems to be going strong, with a slew of streamable party games like Overcooked! All You Can Eat and Jackbox titles hitting Netflix in recent months.
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