BREAKING: Netflix to shut down two more game studios

August 14, 2026 - 04:48

Netflix is staying in the video game business, but it is once again trimming the number of internal studios it owns. The streaming service is closing Night School studio in Los Angeles, which it bought in 2021, and is also shutting down Moonloot in Helsinki, a studio founded in 2022.

The news comes just six weeks after Night School released Unhinged, a short 30-minute horror game designed for TV screens. Netflix co-CEO Greg Peters had praised the title during a call with investors. Now, the studio behind it is being closed.

Night School was known for the award-winning supernatural thriller Oxenfree. A sequel followed after the Netflix purchase, along with a mobile game tied to an episode of Black Mirror. Netflix says the closures are part of a new focus on kids games, party games, story-driven titles, and games with broad mainstream appeal, such as a recently released FIFA game.

A Netflix spokesperson said the company sees a chance to be more focused in its execution and is making organizational changes to match those priorities. The company is also cutting jobs from its internal games team, though it did not say how many positions are affected. The spokesperson thanked the departing employees for their contributions.

Netflix first entered gaming in 2021, offering mobile titles as a free perk for subscribers. By 2023, the company said it was committed to growing carefully. Since then, it has changed course. In 2024, it shut down Team Blue, a studio led by former Call of Duty and Halo developers. Last October, it closed Boss Fight, another studio, shortly after its Squid Game title was praised by leadership. In December, Netflix sold cozy game studio Spry Fox back to its founders.

The company has also shifted from mobile-only games to offering titles on TVs and PCs through streaming, with phones acting as controllers. That is how Unhinged and games like Boggle and Party Crashers were played. After these cuts, Netflix will rely on a central gaming team that works with outside developers, plus one dedicated first-party studio in Helsinki called Next Games.

This move mirrors Netflix's broader approach to shows and movies, which are mostly produced by external companies rather than in-house studios. The gaming industry as a whole is seeing major players like Sony, Ubisoft, and Microsoft close or sell studios, with California-based teams hit especially hard.

Skepticism about Netflix's gaming ambitions has existed for years, and these latest moves are likely to add to it. The company has few announced projects to counter that narrative, though independent studio Don't Nod said last year it was working on a game tied to a major Netflix franchise.