Netflix Shuts Down The Studio Behind Oxenfree To Prioritize Games With “Mainstream Hooks”

The Studio Behind Award-Winning Oxenfree Faces Closure

Netflix is closing Los Angeles-based Night School Studio, which it acquired in 2021, along with Moonloot, a Helsinki studio founded in 2022, according to a report from Game File. The timing is jarring: just six weeks before the closure, Night School released Unhinged, a 30-minute first-person horror game streamable straight to TVs, which Netflix co-CEO Greg Peters personally praised on an investor call, citing “really solid numbers.”

Before joining Netflix, Night School built its name on Oxenfree, the acclaimed supernatural thriller that became one of the most respected indie games of its era. Founded in 2014 by Sean Krankel and Adam Hines, the studio followed Oxenfree with Afterparty, then returned to its signature series with Oxenfree II: Lost Signals after the Netflix acquisition, alongside a mobile tie-in game for the Black Mirror series.

Netflix Wants Mainstream Appeal

Netflix attributed the closures to a shift in priorities toward kids gaming, party games, story-driven titles, and games with what it called “mainstream hooks,” pointing to its recently released FIFA game as an example of the direction it wants more of.

“We see an opportunity to be more focused in our execution, so we are making organizational changes to the business to match those priorities,” a Netflix spokesperson told Game File.

The company is also cutting jobs from its internal games team, though it declined to say how many. These closures aren’t isolated. Netflix shut down Team Blue, a studio staffed by former Call of Duty and Halo developers, in 2024. Last October, it closed Boss Fight Entertainment shortly after Peters had praised that studio’s Squid Game game to investors, the same pattern now repeating with Night School.

In December, it sold cozy game studio Spry Fox back to its founders. That leaves Netflix with a central team that works with external developers and just one remaining first-party studio, Next Games in Helsinki, known for the company’s couch-focused party games.

Part Of A Wider Pullback

Netflix’s retreat from owning internal studios mirrors how it already handles its TV and film output, most of which comes from external production companies rather than in-house studios. It’s also happening alongside a broader industry contraction, with Sony, Ubisoft, Embracer, and Microsoft all closing or offloading studios of their own, and cuts to California-based teams landing especially hard given higher costs there.

Netflix has faced skepticism over its gaming ambitions for years, and closures like this one, paired with few announced upcoming projects, aren’t likely to quiet that. One of the only concrete signs of what’s next comes from Don’t Nod, the acclaimed studio behind Life Is Strange, which said last year it’s developing a game tied to a major Netflix franchise. “Games continue to be an opportunity for us to expand the variety of entertainment we offer Netflix members,” the company’s spokesperson said, even as its list of in-house teams keeps shrinking.