Netflix’s latest studio closures mark another contraction in its once‑ambitious push into internal game development. Night School Studio — the streamer’s first-ever game studio acquisition — and Moonloot Studios — a young internal team built from scratch — have both been shut down, ending two very different but symbolically important chapters in Netflix’s gaming experiment.
🧩 Night School Studio: From indie darlings to Netflix’s flagship narrative team
Night School Studio’s story begins long before Netflix entered the gaming space. Founded in Los Angeles, the studio became an indie sensation with Oxenfree (2016), a supernatural narrative adventure celebrated for its atmospheric storytelling and naturalistic dialogue. The success of Oxenfree positioned Night School as one of the most promising narrative-focused studios in the industry.
They followed with Afterparty (2019) — a stylish, witty adventure about two friends attempting to outdrink Satan to escape Hell — further cementing their reputation for inventive narrative design.
Netflix acquired Night School in 2021, marking its first-ever studio acquisition and signaling a serious commitment to narrative gaming. Under Netflix, the studio released:
- Oxenfree II: Lost Signals (2023)
- A Black Mirror–inspired mobile title, Thronglets
- And most recently, Unhinged (2026) — a 30‑minute cloud-streamed horror experience starring Zoë Kravitz, Sadie Sink, and Troy Baker, playable on TVs using a smartphone as a controller.
Unhinged was released just six weeks before the shutdown and was publicly praised by Netflix leadership for delivering “really solid numbers.” Yet despite this momentum, Night School was closed as part of Netflix’s strategic pivot.
🌱 Moonloot Studios: A promising internal experiment cut short
Moonloot, founded in Helsinki in 2022, represented Netflix’s attempt to build a studio from the ground up. Unlike Night School, Moonloot never released a game. Reports indicate the team was developing an Animal Crossing–style life simulation title, aligning with Netflix’s interest in cozy, replayable experiences.
Moonloot’s closure is particularly abrupt — the studio was still early in development and had not yet had the chance to establish its identity or ship a debut project.
🎯 Why Netflix is shutting down studios
Across all sources, Netflix’s reasoning is consistent: the company is narrowing its gaming strategy to four pillars:
- Kids games (e.g., Toca Boca Jr Kitchen)
- Party games (e.g., Netflix Minigolf)
- Narrative titles (e.g., Unhinged)
- Mainstream hooks (e.g., FIFA World Cup: Launch Edition)
Netflix says it wants to be “more focused in our execution,” leading to organizational changes and layoffs across its gaming division.
This shift follows a pattern:
- Team Blue (AAA studio) shuttered in 2024
- Boss Fight Entertainment (Squid Game mobile) closed in 2025
- Spry Fox (Cozy Grove) sold back to its founders
- Refactor Games, developer of Netflix’s FIFA title, laid off 85% of staff after funding issues
Netflix’s early mobile-focused strategy has now pivoted toward TV-based cloud games, emphasizing accessibility, replayability, and mainstream appeal.
🧠 What these closures mean for Netflix’s gaming future
Night School’s shutdown is the most symbolically significant. It was Netflix’s first acquisition, its most critically acclaimed studio, and the team behind its most ambitious narrative experiments. Closing it just weeks after praising Unhinged suggests Netflix is prioritizing strategic alignment over creative prestige.
Moonloot’s closure, meanwhile, signals that Netflix is stepping back from building internal studios from scratch — a costly, long-term investment — in favor of external partnerships and smaller, more casual experiences.
Together, these closures underscore a broader retreat from the prestige‑indie and narrative‑focused identity Netflix once seemed eager to cultivate.
