Netflix Shuts Down Two Gaming Studios, Including Night School, Developer of Oxenfree

Over the past five years, Netflix has steadily worked to translate its massive dominance in film and television into the interactive entertainment landscape, though results have proven mixed. According to a recent report from Game File, the streaming titan is scaling back its gaming ambitions by shuttering two internal development studios: Moonloot—which never managed to ship a title—and Night School, the acclaimed studio behind Oxenfree and Afterparty. Alongside these closures, Netflix is implementing workforce reductions across its broader internal gaming division, though representatives opted not to disclose specific layoff figures to Game File.

Based in Helsinki, Moonloot was established in September 2022 under the leadership of industry veteran Marko Lastikka, whose resume includes prominent stints at EA and Zynga. Tragically, the studio wound down operations before its debut project ever saw the light of day.

In contrast, Night School built a stellar reputation long before its acquisition by Netflix, captivating players with 2016’s Oxenfree and 2019’s Afterparty. Under the Netflix umbrella, the studio went on to deliver Oxenfree II: Lost Signals in 2023, followed by Thronglets in 2025 and the recently debuted Unhinged on June 30. While Game File notes that Netflix co-CEO Greg Peters publicly lauded Unhinged during a recent investor briefing, these sweeping closures suggest corporate satisfaction remained elusive.

Acquired in 2021, Night School represented one of Netflix’s inaugural ventures into game development, marking this closure as a monumental shift in strategy. Game File indicates that the company intends to pivot its future gaming initiatives toward broad-appeal categories, including family-friendly experiences, casual party games, narrative-driven adventures, and high-profile mainstream titles—such as its newly released football simulation.

Unfortunately, studio closures and substantial layoffs have become an alarming norm across the interactive entertainment sector. Earlier this week, Supermassive Games—the team behind Directive 8020—announced its third round of layoffs since 2024. That follows a turbulent year that saw layoffs hit Battlefield Studios despite a massive commercial launch, Bungie downsize significantly as Destiny 2 rolled out its final update, and Xbox eliminate thousands of positions across multiple studios. The latter decision even sparked public backlash; just yesterday, Xbox’s newly appointed CEO was greeted outside Bethesda’s headquarters by a giant inflatable rat.

For those wishing to revisit Night School’s impressive legacy, be sure to explore our original critical breakdowns of Oxenfree, Afterparty, and Oxenfree II: Lost Signals.