Netflix has initiated a significant contraction of its internal video game development division, shuttering two of its primary studios and implementing widespread layoffs across its remaining gaming teams. The decision marks a stark departure from the aggressive expansion strategy the streaming giant pursued over the last three years. According to reports from Game File, the company has officially closed Night School Studio, based in Los Angeles, and Moonloot, its internal development house located in Helsinki, Finland. These closures are accompanied by an unspecified number of staff reductions across other segments of Netflix’s internal games division, signaling a period of intense reorganization for the company’s interactive entertainment ambitions.
The dissolution of Night School Studio is particularly noteworthy given its history as Netflix’s first major gaming acquisition. Founded in 2014 by Sean Krankel and Adam Hines, the studio gained critical acclaim for its supernatural thriller Oxenfree. Netflix acquired the studio in September 2021 to serve as the cornerstone of its internal development capabilities. During its tenure under the Netflix banner, Night School released Oxenfree II: Lost Signals and recently launched Unhinged, an interactive title designed for television interfaces. The studio had also been collaborating with Charlie Brooker, the creator of Black Mirror, on a specialized project intended to leverage Netflix’s unique interactive streaming technology.
Simultaneously, the closure of Moonloot represents a retreat from Netflix’s efforts to establish a foothold in the Finnish gaming hub. Moonloot was established in late 2022 and was led by Marko Lastikka, a veteran executive with a high-profile pedigree at Digital Chocolate, Electronic Arts, and Zynga. Lastikka’s appointment was initially seen as a major coup for Netflix, signaling its intent to build high-quality, original mobile experiences from the ground up. Recruitment listings from 2023 indicated that Moonloot was in the process of developing a large-scale social simulation game, described as having mechanics similar to Nintendo’s Animal Crossing. With the studio’s closure, the future of this project remains uncertain, though it is likely to be cancelled as part of the broader consolidation.
A Strategic Pivot Toward Focused Execution
The organizational changes come on the heels of a leadership transition within Netflix Games. In 2024, Alain Tascan, a former executive vice president at Epic Games, was appointed to lead the division, replacing Mike Verdu. Verdu, who had previously held senior roles at Electronic Arts and Facebook’s Oculus, was the primary architect of Netflix’s initial gaming push, focusing on rapid catalog growth and the acquisition of diverse indie studios.
In a statement provided to Game File, a Netflix spokesperson framed the recent cuts as a necessary step toward efficiency. "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 spokesperson said. This sentiment was echoed by Tascan during a presentation at the 2025 Game Developers Conference (GDC). Tascan indicated that while the initial phase of Netflix Games was characterized by building a broad and varied library to appeal to all subscriber demographics, the next phase will be characterized by a narrower focus. The company’s revised strategy will prioritize three main pillars: party games, titles aimed at younger audiences, and games based on Netflix’s own high-value intellectual properties (IP).
This shift suggests that Netflix is moving away from the "prestige indie" and original experimental titles that defined its early years in the industry. Instead, the company appears to be doubling down on experiences that have a direct synergy with its streaming content, such as games based on Stranger Things, Squid Game, and Virgin River.
A Timeline of Contraction and Consolidation
The closures of Night School and Moonloot are the latest in a series of retreats for Netflix’s gaming wing. The timeline of the past 18 months reveals a pattern of acquisitions followed by swift closures or divestments.
In 2022, Netflix acquired Boss Fight Entertainment, the developer behind the Dungeon Boss series. However, following the release of Squid Game: Unleashed—a party platformer inspired by the mechanics of Fall Guys—Netflix moved to close Boss Fight Studios entirely. Similarly, the company acquired the acclaimed indie puzzle studio Spry Fox, known for Alphabear and Cozy Grove, in October 2022. By December 2025, however, the partnership had dissolved, with Spry Fox returning to its status as an independent entity.
One of the most high-profile failures in Netflix’s gaming journey was the collapse of its "Triple-A" initiative. Netflix had established a flagship studio in Los Angeles, colloquially known as "Team Blue," with the goal of developing a high-budget, original PC and console title. To lead this effort, the company hired industry heavyweights including Chacko Sonny (former executive producer of Overwatch), Joseph Staten (a veteran of the Halo and Destiny franchises), and Rafael Grassetti (the former art director for Sony’s God of War). Despite the immense talent pool, Netflix shuttered the studio in late 2024 before a single project could be officially announced, resulting in the departure of its star-studded leadership team.
The human cost of this restructuring has been significant. Beyond the internal studio closures, external partners have also felt the impact. Refactor Games, the developer tasked with creating a FIFA World Cup tie-in game exclusively for Netflix, recently underwent mass layoffs. Reports indicate that approximately 85% of Refactor’s workforce was let go following the conclusion of their contract with the streaming giant, highlighting the volatility of the work-for-hire model in Netflix’s current ecosystem.
Supporting Data and Market Context
Netflix’s decision to scale back its gaming ambitions occurs within a broader context of industry-wide correction. The global gaming market has faced a "gaming winter" throughout 2024 and 2025, with major players like Microsoft, Sony, and Electronic Arts collectively laying off tens of thousands of workers. For Netflix, the gaming initiative was always a long-term play to increase subscriber retention rather than a direct revenue generator. Since its launch in November 2021, Netflix Games has been included in the standard subscription price without ads or in-app purchases.
Market data regarding user engagement has been a point of scrutiny for industry analysts. While Netflix does not regularly release specific player counts, third-party data from firms like Apptopia have previously suggested that less than 2% of Netflix’s total subscriber base engages with its games on a daily basis. Despite this, Netflix has continued to tout the success of certain titles, specifically those tied to its hit shows. The company reported that the Grand Theft Auto Trilogy, which it licensed for its mobile app, was its most successful gaming launch to date, suggesting that recognizable brand names drive engagement far more effectively than original, unbranded content.
Financial analysts suggest that Netflix is now applying the same rigorous ROI (return on investment) metrics to its gaming division that it applies to its film and television production. The high cost of maintaining internal studios like Moonloot, which were working on long-lead projects without a guaranteed audience, likely became difficult to justify in a climate where the company is under pressure to maximize profit margins and justify its rising subscription costs.
Implications for the Future of Netflix Games
The restructuring raises questions about the future of Netflix’s internal development capabilities. With the closure of Night School and Moonloot, much of the company’s internal creative engine has been dismantled. The remaining gaming staff will likely focus on managing third-party licensing deals and overseeing the development of games by external partners, rather than building titles in-house.
The move toward "party games and kids titles" reflects a desire to capture the "casual" market that thrives on mobile devices. By focusing on IP-driven content, Netflix aims to turn its games into marketing tools for its shows, creating a feedback loop where a user watches a series and then plays the accompanying game, or vice versa. This strategy is exemplified by the upcoming release of games tied to the second season of Squid Game.
However, the loss of Night School Studio is a blow to Netflix’s credibility within the core gaming community. Night School was viewed as a "prestige" studio that gave Netflix artistic legitimacy. Its closure suggests that Netflix is no longer interested in competing for Game of the Year awards or fostering the kind of auteur-driven development that defines the modern indie scene. Instead, the "Netflix of Games" appears to be evolving into a platform for licensed, snackable content designed to fill gaps between binge-watching sessions.
As Netflix continues to refine its organizational structure under Alain Tascan, the industry will be watching to see if this "focused execution" can finally move the needle on subscriber engagement. For now, the story of Netflix Games serves as a cautionary tale of the difficulties faced by big tech companies attempting to disrupt the traditional gaming landscape. The transition from rapid, unbridled growth to a strategy of consolidation and IP-reliance marks the end of Netflix’s experimental phase and the beginning of a more cautious, corporate-driven era for its interactive division.
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