Netflix announced the closure of its Los Angeles-based Night School Studio, developer of the Oxenfree series, along with its Helsinki-based Moonloot Games, which had not yet released any titles [1, 2, 3]. The company also disclosed layoffs within its broader internal game development teams [1, 2, 3].

Night School Studio was acquired by Netflix in September 2021 and was known for games such as Oxenfree (2016), Oxenfree 2: Lost Signals (2023), Afterparty (2019), and the Black Mirror companion game Thronglets [1, 2, 4]. The studio’s latest release was Unhinged, a first-person horror narrative game featuring Zoë Kravitz and Sadie Sink, which launched on June 30, 2026, and was praised by Netflix as a top-performing cloud game [1, 2, 4, 5]. Netflix co-CEO Greg Peters said in July that Unhinged and FIFA World Cup: Launch Edition were "the two most successful cloud game debuts," with "really solid numbers that put it in the top tier of game performance" for the company [6]. Despite this, Night School Studio will close about six weeks after Unhinged’s release [1, 4].

Moonloot Games, founded in Helsinki in 2022, was working on an Animal Crossing-style life simulation game but had not launched any games before its shutdown [1, 3, 7].

Netflix said these studio closures and layoffs reflect a strategic shift to focus gaming on kids’ games, party games, narrative-driven titles, and games with more mainstream appeal. A Netflix spokesperson said, "We see an opportunity to be more focused in our execution, so we are making organizational changes to the business to match those priorities" [1]. Another statement added, "Games continue to be an opportunity for us to expand the variety of entertainment we offer Netflix members" [4].

This restructuring follows earlier moves, including closing Team Blue studio in 2024, ending Boss Fight Entertainment in 2025, and selling Spry Fox back to its original owners [1, 3]. The company’s internal teams also lost specialized staff, including its only dedicated accessibility expert [3].

Separately, Refactor Games, publisher of FIFA World Cup: Launch Edition, laid off 85% of its staff after its funding partner Delphi Interactive pulled support [1, 6].

Netflix continues to push gaming as part of its entertainment offerings but is narrowing its approach to lower-cost, mainstream titles with broad appeal. The company did not disclose a timeline for final studio closures or further job cuts [1, 4].