Despite its game Unhinged receiving positive player reviews and being personally described by the CEO as "one of the most successful cloud gaming debuts," Netflix announced this week the closure of its game development studios Night School and Moonloot. This marks another major contraction in the streaming giant's gaming business, following last month's significant layoffs at Refactor Games.
According to Game File, Netflix attributed the shutdowns in internal communications to strategic focus: going forward, it will retain only children's games, party games, narrative-driven titles, and IP-based games with "mass-market appeal." A Netflix spokesperson stated in a press release: "We see opportunities for more focused execution, so we are making organizational adjustments to align with our priorities. Gaming remains an important direction for expanding the variety of entertainment content available to our members."
Notably, this is not the first time Netflix has "taken action" after public praise—previously, the FIFA World Cup-themed game developed by Refactor Games was also hailed as "the most successful cloud gaming debut," yet just two months later, 85% of the company's employees were laid off.
In terms of overall data, Netflix claimed in July that its game engagement had surged by 600% year-over-year and repeatedly expressed its ambition to enter the gaming industry. However, its actual actions have shown caution or even contraction. Previously, Netflix had considered bidding for Warner Bros. Games assets but ultimately did not proceed; meanwhile, EA, which had earlier been rumored as a potential acquisition target, has since been taken private by a consortium led by Saudi Arabia's Public Investment Fund.
Industry insiders point out that Netflix's gaming strategy is shifting from a "broad net" approach to "precision strikes," testing IPs and gameplay mechanics at lower costs. However, the frequent pattern of "praising then killing" projects may have long-term negative effects on attracting talent within the gaming industry.