Netflix is shutting down two development studios that were developing cloud games for the streaming service. This is particularly bitter for one of the two studios.
Which two studios are affected? Netflix is closing the development studio Night School Studio, the creators of Oxenfree. At the same time, the Finnish studio Moonloot is being shut down, which was founded in 2022. It reportedly was working on some sort of life simulation in the style of Animal Crossing.
Night School Studio was founded back in 2014. Their indie game Oxenfree was released in 2016. It was only in 2021 that they negotiated with Netflix for an acquisition. They were the very first development studio that Netflix has ever bought in its company history.
Most recently, they released their new game Unhinged. It is an interactive cloud horror game that gamers can play on their smartphones. But just six weeks after the release, the studio must close, even though it was a huge success for Netflix.
Studio must close despite the greatest success
How successful was the game? According to the financial report of the second quarter of 2026, Unhinged has been one of Netflix’s greatest successes. Co-CEO, president, and director Gregory K. Peters mentioned that both Unhinged and FIFA were two of the most successful cloud game debuts from Netflix:
They mentioned the cloud-based strategy, these cloud-based TV games – we see that this is really working. “FIFA” and “Unhinged” were our two most successful cloud game debuts, with truly solid numbers that bring them into the top tier of game performance for us.
And although Unhinged was one of Netflix’s most successful debut games, the studio will close six weeks after the release of this game.
Why are the studios being closed? The team from Game File reportedly spoke with a spokesperson from Netflix. They were informed that the studio wants to change its priorities and switch to games for children, party games, and mainstream games.
We see the opportunity to be more targeted in our implementation and are therefore making organizational changes within the company to meet these priorities.
Originally, Oxenfree was offered for purchase on the platform itch.io. But it simply disappeared from there, reminding players that they actually own nothing. Popular game disappears from shop – Reminds players that they own nothing
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