Netflix had only just called its latest release one of its best cloud game debuts.
Netflix is closing Night School Studio, the developer behind Oxenfree, just six weeks after it released its newest game, Unhinged, for the streaming service. The Los Angeles studio is being shut down alongside Helsinki-based Moonloot, while Netflix is also cutting jobs across its wider games team. The closures were first reported by Game File and later confirmed by Netflix. Unhinged, a 30-minute first-person horror game, launched on 30 June as one of Netflix's cloud games, which can be streamed directly to TVs with a phone used as the controller. Just a few weeks later, Netflix was already talking up its launch.
Netflix co-CEO Greg Peters called Unhinged and FIFA its "two most successful cloud game debuts" during the company's second-quarter earnings call. Peters said both had delivered "really solid numbers" that put them in the "top tier of game performance" for Netflix. Twenty-eight days later, Netflix confirmed that Night School is closing.
Which game studios has Netflix closed?
Night School and Moonloot are the latest studios to leave Netflix's internal development roster after several years of the company building up its own teams. In 2024, Netflix shut down Team Blue, a studio staffed by former Call of Duty and Halo developers that had been exploring a high-end first-person game for the service. Boss Fight Entertainment followed last October, shortly after Netflix had praised the studio's work on Squid Game: Unleashed. Then in December, Netflix sold Spry Fox back to its founders.
Why is Netflix closing Night School Studio?
Netflix says it is narrowing its gaming focus around children's games, party games, narrative titles, and games with broader mainstream appeal, including its recently released FIFA game.
"We see an opportunity to be more focused in our execution, so we are making organisational changes to the business to match those priorities," a Netflix spokesperson told Game File. Those changes go beyond Night School and Moonloot. Netflix is also cutting jobs from its internal games team, although the company has not said how many people will be affected.
Night School made its name with Oxenfree, the award-winning supernatural thriller released in 2016, before following it with Afterparty in 2019. Netflix acquired the studio in 2021, after which it released Oxenfree II: Lost Signals in 2023, a mobile game tied to Black Mirror and, most recently, Unhinged. Moonloot, on the other hand, was founded by Netflix in Helsinki in 2022 and is now planned for closure.
Netflix's collection of internal studios is now much smaller than the one it was building just a few years ago. The company started offering games to subscribers in 2021, initially on mobile, and spent the following years buying and opening studios of its own. With Night School and Moonloot now closing, Helsinki-based Next Games is its remaining dedicated internal studio.
Netflix isn't stepping away from games entirely. Its attention has increasingly shifted towards cloud games that can be streamed to TVs and PCs, with phones used as controllers, alongside games made by outside developers. Unhinged was part of that cloud push, as are titles such as Boggle and Party Crashers.
"Games continue to be an opportunity for us to expand the variety of entertainment we offer Netflix members," a Netflix spokesperson said, adding that the company is "especially excited about the momentum" around cloud games and children's games.
