Netflix Shuts Down Night School Studio and Moonloot Games Amid Gaming Retreat

Netflix has closed two more of its internal game studios, shutting down Los Angeles-based Night School Studio, the beloved developer behind the Oxenfree series, and Finnish studio Moonloot Games. The closures come as part of an ongoing strategic pullback from the games industry, with Netflix stating it wants to "operate more strategically and efficiently" within its gaming division. The move eliminates an unspecified number of additional roles across both teams.

The timing has drawn sharp criticism from fans and industry observers alike. Night School had released Unhinged, a horror game playable via Netflix's cloud streaming service on televisions and screens, just six weeks before the shutdowns were announced. Netflix had even praised the title as one of the company's "most successful cloud game debuts" roughly a month prior, making the studio closure feel especially abrupt. Former Night School staff have since spoken out publicly, noting the game's reception had been described internally as "top tier" before the rug was pulled.

Netflix first acquired Night School Studio in 2021, part of an ambitious bid to extend its streaming dominance into the video game space. Night School had built a devoted following through its side-scrolling psychological thrillers Oxenfree and Oxenfree 2: Lost Signals. Moonloot, meanwhile, was a studio Netflix itself founded in 2022. After roughly five years of investment and multiple studio acquisitions, the latest closures signal that Netflix's gaming ambitions have fallen well short of expectations.

Sources