Netflix closes Oxenfree developer Night School, just a month after praising its new game as one of the company's 'most successful cloud game debuts'

Less than two months after the release of its latest game, Unhinged, Netflix is closing developer Night School Studios, as well as its Moonloot studio in Helsinki.

Netflix confirmed the closures, first reported by Game File, in a statement provided to PC Gamer.

"Games continue to be an opportunity for us to expand the variety of entertainment we offer Netflix members, and we’ve built solid foundations in our key focus areas: Kids (Netflix Playground), Party (Netflix Minigolf), Narrative (Unhinged) and Mainstream (FIFA World Cup: Launch Edition)," a Netflix spokesperson said. "We’re especially excited about the momentum we’re seeing with cloud games and kids games."

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Unhinged, as I mentioned, was developed by Night School and released just six weeks ago, on June 30. It was seemingly a hit: Less than a month ago, during Netflix's second-quarter earnings report, the company was trumpeting its success. "We really see it working," Netflix co-CEO Gregory Peters said in response to a question about the company's cloud gaming strategy. "FIFA and Unhinged became our two most successful cloud game debuts, really solid numbers that put it in the top tier of game performance for us."

It sounds very upbeat—yet here we are, 28 days later, with Netflix "making organizational changes to the business" because it sees "an opportunity to be more focused in our execution." Night School, which Netflix acquired in 2021, is being closed, and Netflix is "planning to close" the Moonloot studio it founded in 2022.

"We're grateful for Night School’s work in pushing the boundaries of storytelling through games with Unhinged," the spokesperson said.

But Night School was a lot more than Unhinged. The studio is best known for the award-winning indie hit Oxenfree, released in 2016, and the 2023 follow-up Oxenfree 2: Lost Signals—in between which it put out the lesser-known but also well-received Afterparty, a game about dying, going to Hell, and outdrinking Satan.

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Those games played a big role in Netflix's decision to buy out Night School—its first game studio acquisition. "We’re inspired by their bold mission to set a new bar for storytelling in games," Netflix said at the time. "Their commitment to artistic excellence and proven track record make them invaluable partners as we build out the creative capabilities and library of Netflix games together."

After charging hard into the mainstream gaming space, Netflix's ambitions seemed to shift. Two years after launching Team Blue, a studio intended to be "the next big thing in gaming," Netflix shut it down before it could release (or even announce) a single game. Just a couple weeks later, the company's vice president of games became its vice president of generative AI for games; just a few months after that, he left the company entirely.

Rather like Amazon, it looks like Netflix has decided that its future in gaming lies with AI: In October 2025, it put out the call for a new Director of Generative AI for Games, with a starting salary of up to $840,000 plus benefits.

Netflix is also making cuts beyond the two studio closures: "We believe we can operate more strategically and efficiently within our Games business, and as a result are eliminating some additional Games roles." Specifics on those cuts were not provided.