Netflix closes more game studios as it pulls back on video games

August 14, 2026 - 13:20

Netflix has closed two more of its internal game development teams, including Night School Studio, the studio behind the acclaimed adventure game Oxenfree. The move signals a continued retreat from the company's earlier push into building its own video games from scratch.

Night School Studio was acquired by Netflix in 2021, marking one of the streaming giant's first major moves into gaming. At the time, the company talked up the potential of interactive storytelling as a natural extension of its entertainment brand. But now, that vision has narrowed considerably. Alongside Night School, a second smaller team has also been shut down, though Netflix did not name it in its internal announcement.

The closures come just months after Netflix shuttered its AAA game studio in Southern California, which had been working on a high-budget original title. That project was led by a former Overwatch executive producer. Taken together, these moves suggest Netflix is stepping back from the expensive, risky business of developing big-budget games internally.

Instead, the company appears to be focusing its gaming efforts on licensed titles and smaller, lower-cost experiments. Netflix has had some success with games tied to its popular shows, like the Stranger Things puzzle game and the Too Hot to Handle dating sim. It has also been testing cloud-streamed games on TVs and browsers, which lets subscribers play without downloading anything.

Industry watchers say the strategy shift is not surprising. Building original games takes years and millions of dollars, with no guarantee of a hit. Streaming video, Netflix's core business, still demands most of its attention and budget. The company has been through a period of cost-cutting across its entertainment divisions, and game development is just the latest area to feel the squeeze.

For fans of Night School, the news is a letdown. The studio was known for its moody, story-driven games with sharp writing and hand-painted art. Oxenfree and its sequel earned strong reviews, and many hoped Netflix would give the team room to keep making that kind of work. Now, those plans are gone. Some staff may be offered roles elsewhere at Netflix, but it is unclear how many will stay.

Netflix has not made a public statement about the closures beyond the internal note to employees. The company still lists dozens of mobile games in its catalog, and it says it remains committed to gaming as a feature for subscribers. But the days of building a major in-house game division appear to be over, at least for now.