Ethan Crossfield 
Studio closures and layoffs have become a defining part of the modern games business, affecting developers across publishers and platforms. Netflix is now adding to that trend: the company is shutting down Night School, the developer behind Oxenfree, and Moonloot, a Helsinki-based studio that never released a game. Netflix is also reducing staff on its internal gaming team, although it has not disclosed how many positions are affected.
Two Studios Exit Netflix’s Games Division
The closures were reported by Game File as Netflix scales back part of its gaming operation. Moonloot was founded in September 2022 under the leadership of Marko Lastikka, whose previous experience included work at Zynga and EA. The studio was still developing its first title when Netflix closed it, meaning Moonloot’s work will not reach release under the company.
Night School’s closure carries more weight because the studio had an established identity before Netflix acquired it in 2021. Its catalog includes Oxenfree, released in 2016, and Afterparty, released in 2019. The team later produced Oxenfree II: Lost Signals in 2023, followed by Thronglets in 2025 and Unhinged, which launched on June 30.
A Significant Change for an Early Netflix Investment
Night School was among Netflix’s earliest investments in games, making the decision to close the studio a notable reversal of the company’s previous approach. The timing is also striking because Netflix co-CEO Greg Peters recently praised Unhinged during an investor call. That public support did not prevent the studio from being shut down, suggesting that positive comments about an individual release do not necessarily reflect the long-term status of its development team.
Netflix declined to provide Game File with a figure for the internal staff reductions. The company’s decision therefore affects both acquired studio development and its own gaming organization, though the full scale of the change remains unclear.
Netflix Narrows Its Focus
Netflix’s next phase in games is expected to concentrate on children’s titles, party games, story-focused projects, and releases with broader mainstream appeal. The company has also pointed to a recently released FIFA game as an example of that direction.
That strategy represents a move away from pursuing a wide range of studio-led projects. Night School’s closure is especially relevant because its narrative-driven work helped give Netflix a recognizable connection to premium indie games. Whether the company continues funding similar teams will depend on how narrowly it applies its new priorities.
Key points
- Netflix is closing Night School, developer of Oxenfree and Afterparty.
- Moonloot, founded in Helsinki in 2022, is also being shut down before releasing a game.
- Netflix is cutting internal gaming staff but has not disclosed the number of affected jobs.
- Future efforts will emphasize kids’ games, party titles, story-driven projects, and mainstream properties.
The studios affected
| Studio | Confirmed details | Notable games or status |
|---|---|---|
| Night School | Acquired by Netflix in 2021 | Oxenfree, Afterparty, Oxenfree II: Lost Signals, Thronglets, Unhinged |
| Moonloot | Founded in Helsinki in September 2022 | Closed before releasing a game |
Expert View
Netflix’s retreat signals a more selective phase for platform-backed game development. Rather than expanding through a broad portfolio of studios, the company appears to be prioritizing projects with clear mass-market or social appeal. For the wider development community, the closures also show how quickly acquired teams can lose support even after producing respected games. For players, the immediate impact is uncertainty around Night School’s future work and a smaller visible role for narrative-focused indie development within Netflix’s games strategy.
