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Night School Staff Speak Out After Netflix Shuts Down Developer Following 'Top Tier' Launch of Unhinged
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“Netflix has shut down its Los Angeles-based game studio Night School, known for side-scrolling psychological thrillers Oxenfree and Oxenfree 2: Lost Signals, just after releasing the first-person, narrative-driven horror game Unhinged. The closure comes as Netflix continues to explore its gaming space, with co-CEO Greg Peters stating that Unhinged became one of its 'most successful cloud game debuts' yielding 'really solid numbers that put it in the top tier of game performance for us.' Expert Analysis: This move highlights the challenges of scaling game development in the cloud, where high production costs and uncertain market demand can lead to significant financial risks. As Netflix refines its gaming strategy, it may prioritize more cost-effective and risk-tolerant approaches, potentially shifting the industry landscape.”
Core Impact Points
- Netflix has shut down its Los Angeles-based game studio Night School, known for Oxenfree and Oxenfree 2: Lost Signals.
- The closure comes just after the release of the first-person, narrative-driven horror game Unhinged, which was praised for its unique offering in the current gaming landscape.
- Co-CEO Greg Peters stated that Unhinged became one of Netflix's 'most successful cloud game debuts' yielding 'really solid numbers that put it in the top tier of game performance for us.'
- Netflix is also shutting down Moonloot, its game studio based in Helsinki, Finland, which was developing an unannounced life-sim project.
- The closures follow previous shutdowns of Team Blue in 2024 and Boss Fight Entertainment in 2025, with Netflix citing a 'less-is-more strategy on a few identified verticals.'
- Despite the closures, Netflix remains committed to its gaming space, with a focus on 'calibrating and refining' its investment based on demonstrated performance and member demand.
Netflix is shuttering its Los Angeles-based game studio Night School, best known for side-scrolling psychological thrillers Oxenfree and Oxenfree 2: Lost Signals. The streamer is also shutting down Moonloot, its game studio based in Helsinki, Finland, which has not yet released any titles but was developing an unannounced life-sim project.
“Speaking with GameFile, a Netflix spokesperson confirmed the company still intends to release games on its platform, saying this latest move was an effort to streamline these efforts. “We see an opportunity to be more focused in our execution, so we are making organizational changes to the business to match those priorities,” the spokesperson said.”
“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. Games continue to be an opportunity for us to expand the variety of entertainment we offer Netflix members.
” This news comes just after Night School released Unhinged, a first-person, narrative-driven horror game created in collaboration with Weapons director Zach Cregger, on June 30. Starring names like Sadie Sink and Zoë Kravitz, it stood out as a unique offering in the current gaming landscape, which reviewers described as a “fun and scary choose-your-own-adventure” romp.
A former member of Night School staff spoke about the closure on LinkedIn, writing, "Despite directing Unhinged and shipping it 6 weeks ago to millions of excited, satisfied players, it looks like I'm back on the market (along with the rest of Night School Studio)!
... I'm so proud of what we accomplished, and millions of people agree that we made a great product! Onward to the next exciting thing! " These are the latest game studio closures from Netflix after the streamer shut down Team Blue in 2024.
Netflix founded the developer in 2022, and it closed without releasing any games. It also closed Boss Fight Entertainment in 2025 after acquiring it in 2022, releasing several games within that timeframe. At the time, Netflix described Boss Fight’s closure as part of a “less-is-more strategy on a few identified verticals.
” Despite these most recent closures, Netflix has had positive things to say about its foray into the gaming space, with co-CEO Greg Peters saying Unhinged became one of its “most successful cloud game debuts” that yielded “really solid numbers that put it in the top tier of game performance for us” in a July 2026 investor call.
“We're scratching the surface in terms of what we think the total potential of the space offers for us. You're going to see us continue to calibrate and refine our level of investment here, which is still very small relative to our overall content spend based on demonstrated performance based on what is working for our members and what's delivering returns to our business,” he added.
Virginia (she/her) is IGN’s News Editor. With ten years of experience reporting on games and entertainment, she’s got a storied background in the fighting game community, influencer news, and viral online trends. Find her on Twitter at @TheeMissGlaze .
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Originally reported by IGN News
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