Netflix has announced the closure of two internal game development studios, Night School Studio and Moonloot, in a move to streamline its gaming efforts. This shift affects the developer behind Oxenfree and the team reportedly working on an Animal Crossing-style game, marking a significant change in Netflix’s approach to its internal game projects.
The announcement, confirmed to Game File by a Netflix spokesperson, explains that the company aims to concentrate its gaming division on titles targeting children, party game enthusiasts, story-driven experiences, and games with broader mainstream appeal. Netflix indicated this would involve organisational changes coupled with job reductions within its internal games teams.
Night School Studio, acquired by Netflix in 2021 during the development of Oxenfree II: Lost Signals, was known for narrative-rich experiences with a focus on walk-and-talk horror elements. More recently, their 2026 release Unhinged incorporated innovative mechanics linking phones and TV screens, featuring voice performances from Zoë Kravitz and Sadie Sink. Despite positive reception to these experimental titles, Netflix has decided to discontinue the studio’s operations.
Impact on Netflix’s Gaming Content and Strategy
Alongside Night School’s closure, Netflix is also shutting down Moonloot, which had reportedly been working on a game similar to Nintendo‘s Animal Crossing. These moves come after Netflix scaled back other internal studios over the past two years, including the closure of Boss Fight in 2025 and the sale of Spry Fox shortly after. Previously, Netflix had hired a former Halo creative director to lead AAA game efforts, which were cancelled in 2024.
The company’s recent partnership with Ustwo Games for Monument Valley 3 also ended with the title’s removal from the Netflix service after struggling to find an audience. Ustwo has since pivoted back towards PC-focused development. Netflix’s current internal game lineup is largely centred on party-style games under Next Games, aligned with this strategic focus on accessible, lighthearted titles.
These closures underscore a pivot in Netflix’s gaming division from more niche, narrative-driven experiences like those produced by Night School Studio to games aimed at mass-market appeal, particularly children and casual audiences. The company’s spokesperson expressed gratitude for the contributions of the affected employees and emphasised the ongoing role of games in Netflix’s entertainment ecosystem, albeit with a refocused approach.
There is no detailed information on whether the closure of Night School Studio will affect the ongoing support or future content for existing titles such as Oxenfree II. The closure of Moonloot similarly leaves the fate of its Animal Crossing-like project unclear.
