Netflix Shuts Night School Studio and Moonloot in Gaming Pivot
The streaming giant continues to divest from internal development, cutting jobs and closing two more studios to focus on mainstream party games.
Netflix is shutting down two of its internal game development studios, Night School Studio and Moonloot, as part of a broader organizational restructuring. The move includes job cuts across the company's internal games team, signaling a continued retreat from its early ambitions to build a massive first-party development ecosystem.
Night School Studio, the Los Angeles-based creator of the Oxenfree series, was acquired by Netflix in 2021. Moonloot, based in Helsinki, was founded internally by Netflix in 2022. Both are now being shuttered. This follows a string of recent divestments, including the closures of Team Blue and Boss Fight, and the sale of Spry Fox back to its founders in December.
A Shift in Strategy
Netflix entered the gaming market in 2021, initially positioning mobile games as a value-add bonus for its subscribers. However, the company has since pivoted away from owning a diverse roster of internal studios. Instead, Netflix is moving toward a production model that mirrors its film and TV business, relying more heavily on external developers rather than maintaining high-overhead internal teams.
Recent strategic shifts include a focus on games streamed to PCs and televisions using smartphones as controllers. The company is now prioritizing "mainstream hooks," specifically targeting kids' content and party games, such as those produced by its remaining first-party studio, Next Games.
The Cost of Ambition
These closures highlight the high financial risk and operational cost associated with internal AAA and indie development. By narrowing its scope, Netflix is aligning itself with a wider industry trend of consolidation and studio closures seen at other gaming giants, including Sony, Microsoft, and Ubisoft.
According to a Netflix spokesperson, the company sees an "opportunity to be more focused in our execution" and is making organizational changes to match those priorities. Despite the cuts, the spokesperson added that games "continue to be an opportunity for us to expand the variety of entertainment we offer Netflix members."
What's Next
Industry observers will be watching to see if Netflix continues to shed its remaining internal assets or if the pivot toward TV-streamed party games can generate the engagement necessary to justify the investment. While the company maintains that gaming remains a core part of its entertainment offering, the transition from a developer to a publisher suggests a more cautious, risk-averse approach to the medium.