The timing is brutal. Less than two months ago, Netflix co-CEO Greg Peters praised Unhinged — Night School Studio’s latest game — during an investor call, calling it one of the company’s most successful cloud game debuts. On 13 August, Netflix confirmed it was closing the studio entirely. Night School had released Unhinged on 30 June 2026. It had six weeks between that launch and the news it was being shut down.
Netflix is also closing Moonloot Games, a Helsinki-based studio the company founded in September 2022. It’s declining to specify how many jobs are being cut from the broader games team, but confirmed additional roles are being eliminated there too.
What Night School Built
Night School Studio was founded in 2014, more than seven years before Netflix acquired it in 2021 as the streaming company’s first gaming studio purchase. In that time, it had built a clear identity: atmospheric, narrative-driven adventures with strong character writing and a distinctly eerie tone.
Its catalogue runs from Oxenfree (2016), a supernatural teen thriller that became a sleeper cult hit, through Afterparty (2019), a blackly comic adventure set in Hell, to Oxenfree II: Lost Signals (2023) and Thronglets (2025). Unhinged, the most recent release, was an interactive horror experience starring Zoe Kravitz, Sadie Sink, and Troy Baker, described by Netflix as an immersive and experimental smartphone-controlled experience.
Staff spoke out following the announcement. According to reports from Night School employees, writers had signed contracts and cleared schedules for an upcoming project. The writers’ room was due to open in August. It never did.
Moonloot Games Is Also Being Shut Down
The closure of Moonloot Games is a different kind of story. The Helsinki studio was founded by Netflix in September 2022 and led by Marko Lastikka, who brought experience from Zynga and EA. Unlike Night School, Moonloot never released a game. It is being shut down before it had the chance.
Netflix’s Gaming Strategy Is Shrinking
With the closure of Night School and Moonloot, Netflix has now shut down or sold all but one of the first-party studios it built or acquired in its push to become a meaningful gaming platform. A Netflix spokesperson told Game File that the company is making “organisational changes to the business” to better match its priorities, which it describes as kids gaming, party games, story-driven titles, and mainstream games with broad hooks — citing a recently released FIFA title as an example of the direction.
Netflix’s statement acknowledged the people leaving: “We are incredibly grateful to the talented colleagues we’re saying goodbye to today. We thank them for all their contributions to Netflix, and wish them the best.” The company did not specify how many roles total are being eliminated.
The acquisition of Night School in 2021 was supposed to signal that Netflix was serious about games. Five years on, that ambition has all but retreated.
Part of a Much Larger Trend
Studio closures and layoffs have become a persistent feature of the games industry in 2026. Xbox’s sweeping restructure earlier this year resulted in over 3,200 job losses across its studios. Supermassive Games, developer of Until Dawn and Directive 8020, suffered its third wave of layoffs since 2024 just this week. Bungie has seen significant cuts to its Destiny 2 development team.
Night School Studio’s closure carries a particular sting precisely because of the timing — a studio that had been operating, releasing games, and receiving praise from its own parent company as recently as its last investor call. The lesson the industry keeps demonstrating is that commercial success and job security are, at best, loosely correlated.
