Netflix has closed two of its internal video game development studios, including Night School Studio, the developer behind the narrative adventure titles Oxenfree and Afterparty. The streaming service also shuttered Moonloot, a studio that had not yet released a game. These closures, first reported by Game File, come as Netflix reportedly reevaluates its strategy in the gaming sector. The company also confirmed staff reductions within its broader gaming division, though the exact number of affected employees was not disclosed.
Night School Studio, acquired by Netflix in 2021, was a significant early investment for the company in its push into interactive entertainment. The studio released Oxenfree in 2016 and Afterparty in 2019, establishing a reputation for its unique narrative style. Under Netflix, Night School released Oxenfree II: Lost Signals in 2023, Thronglets in 2025, and the recently launched Unhinged on June 30. Despite recent praise for Unhinged from Netflix co-CEO Greg Peters, the studio's closure indicates a potential dissatisfaction with its output relative to broader company goals.
Moonloot, a Helsinki-based team founded in September 2022, never had the opportunity to release a title. Its closure, alongside Night School's, suggests a contraction of Netflix's gaming ambitions. According to Game File, Netflix intends to concentrate its future gaming efforts on "kids gaming, party games, story-driven fare and games with mainstream hooks, such as a recently released FIFA game."
The video game industry has seen a significant number of studio closures and layoffs in recent years. This trend includes multiple rounds of layoffs at Supermassive Games, the developer of Directive 8020, earlier this week. This year also saw layoffs at Battlefield Studios despite the release of a best-selling game, the significant reduction of staff at Bungie culminating in the final update for Destiny 2, and widespread layoffs across Xbox's development studios. The latter instances prompted visible protests, including the appearance of a large inflatable rat outside Bethesda when Xbox's new CEO visited the studio.