Netflix shut down Night School Studio and Moonloot Games on August 13, 2026. Night School, the studio behind Oxenfree, was the very first video game studio Netflix ever acquired, back in 2021. Its closure comes six weeks after the release of its last game, Unhinged.
Four Studios Shut Down by Netflix in Under Two Years
Night School and Moonloot aren’t the first casualties. Netflix built up and then dismantled a small galaxy of internal studios in just over four years. Here’s the order of departures and closures, as reported by the specialized press.
- October 2024: closure of Team Blue, a AAA studio based in Southern California, founded in 2022 with veterans from Blizzard, Bungie and Sony Santa Monica, including Chacko Sonny, Joseph Staten and Rafael Grassetti. It never released a single game.
- October 2025: closure of Boss Fight Entertainment, acquired in 2022, known for developing Squid Game: Unleashed.
- December 2025: Spry Fox, the studio behind Cozy Grove, left the Netflix fold. This was a departure, not a closure.
- August 13, 2026: Netflix shuts down Night School Studio, its first-ever acquired studio from 2021, and Moonloot, an internal studio founded in Helsinki in 2022.
Four studios shut down, one departed. Only one internal studio remains standing at Netflix: Next Games, in Helsinki, known for Netflix Minigolf. Moonloot, for its part, had been working since 2022 on an Animal Crossing-style life sim that never saw the light of day.
A Game Praised Six Weeks Before the Shutdown
Variety, August 13, 2026, by Jennifer Maas, illustrated with an image from Unhinged, the last game released by the studio.
Night School’s last game is called Unhinged. Released on June 30, 2026, this interactive horror thriller is played on TV through Netflix’s cloud gaming, with the player’s phone serving as both controller and staging prop. The story follows Ava, trapped in her building during a hurricane and stalked by a killer. Zoë Kravitz, Sadie Sink and Troy Baker lend their voices to this 20-to-40-minute experience. During its five years under Netflix, the studio had also delivered Oxenfree II: Lost Signals and Afterparty, as well as Thronglets, a mobile spin-off of Black Mirror.
On July 16, 2026, during the second-quarter earnings call, co-CEO Greg Peters cited Unhinged as an example of success. His exact quote: « FIFA and Unhinged became our 2 most successful cloud game debuts, really solid numbers that put it in the top tier of game performance for us. » A month later, the studio that made it no longer existed. The gap between the two dates measures the real timeline of these decisions at Netflix: a quarter’s good numbers don’t protect a studio from the next one.
Party Games, Kids’ Titles and TV Streaming
Netflix justified the closure with a brief statement: « We see an opportunity to be more focused in our execution, so we are making organizational changes to the business to match those priorities. » The company detailed those priorities elsewhere: kids’ games, party games, narrative games and mainstream-appeal titles.
Concretely, Netflix is betting on cloud gaming streamed directly to TVs through its TV app, with the player’s phone acting as the controller. Boggle, Party Crashers, Netflix Minigolf and Overcooked! All You Can Eat already illustrate this direction. Jackbox Games has signed a partnership to bring three of its titles to the platform. External publishing, cheaper and less risky, is taking precedence over in-house development.
The Same Trend Is Sweeping the Whole Industry
This wave of closures isn’t an isolated case. Xbox went through a wave of layoffs documented in our article on the confidence crisis now gripping the industry. Electronic Arts, acquired by a consortium led by Saudi investors, now has to repay $1.8 billion in interest every year and cut $700 million in costs. Sony, for its part, has stopped physical PS5 games while Xbox laid off staff en masse. Studio closures, budget cuts, layoffs: the same vocabulary keeps repeating from one publisher to another, two years running.
What Remains: Employees, the License and Oxenfree
Netflix refuses to share a number for how many people are affected by the layoffs. The company only confirms it is cutting additional positions within its games team, on top of the Night School and Moonloot staff. No official total has leaked to date, and journalists who asked were turned down.
The catalog, for now, isn’t changing. According to media outlets that covered the announcement, Oxenfree, Oxenfree II: Lost Signals and Unhinged remain available to Netflix subscribers despite the closure of the studio that created them. Netflix, however, has not published any explicit statement guaranteeing their long-term presence on the platform. As for the Oxenfree license, no future has been announced for it yet without the studio that imagined it.
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