Netflix Closes Night School and Moonloot Studios, Cuts Jobs, Pivots to Kids and Party Games

Netflix has further scaled back its gaming business, announcing the closure of Night School studio in Los Angeles and Moonloot studio in Helsinki. Night School was acquired by Netflix in 2021, while Moonloot was founded in 2022. Just six weeks ago, Night School launched a 30-minute first-person horror game, Unhinged, on the Netflix platform, which supports streaming directly on television and was praised by Netflix co-CEO Greg Peters for its "very impressive numbers." Night School was previously known for developing the supernatural thriller Oxenfree, and after the acquisition released a sequel and a mobile game tied to Black Mirror.

A Netflix spokesperson said the company's focus will shift to children's games, party games, narrative-driven titles, and games with mainstream appeal, such as a recently released FIFA-related game. The company is adjusting its organizational structure to match these priorities. In addition to closing the studios, Netflix's internal gaming team also faces layoffs, though the official did not disclose the number of affected employees. The spokesperson expressed gratitude to departing employees and wished them well.

Netflix entered the video game sector in 2021, initially offering mobile games free to subscribers. In 2023, then-head of gaming Mike Verdu said the company was committed to cautious growth, building internal studios and not making game-related layoffs. Since then, the strategy has shifted: in 2024, the company closed a startup studio composed of former Call of Duty and Halo developers; in October 2025, shortly after Greg Peters praised Boss Fight studio's Squid Game-related work to investors, that studio was closed; and in December of the same year, Netflix sold Spry Fox studio back to its founders.

Currently, Netflix's game distribution focus has shifted from mobile to streaming to televisions and computers, with phones used as controllers. Games such as Unhinged, Boggle, and Party Crashers operate this way. After this reduction, Netflix retains only a core gaming team responsible for working with external developers, and a first-party studio, Next Games, in Helsinki, which has produced several living-room party games. This approach aligns with Netflix's strategy of relying mainly on external production for series and films.

In the gaming industry, large companies cutting studio sizes is common; Sony, Ubisoft, Embracer, and Microsoft are among those closing or selling studios, with California-based studios facing high operating costs particularly affected. Notable independent studio Don't Nod revealed in 2025 that it is developing a game related to a major Netflix IP franchise. The Netflix spokesperson reiterated that games will continue to be an important opportunity for the company to provide members with a more diverse entertainment experience.