Netflix Closes Night School Studio and Moonloot Six Weeks After Unhinged, and Oxenfree Devs Are Out of a Job

Netflix is closing Night School Studio, the LA-based developer of Oxenfree, just six weeks after the studio released its 30-minute first-person horror game Unhinged on the streaming service. The move wipes out one of the most respected narrative teams in indie games, and it lands as another brutal proof that Netflix's grand mobile and cloud-games experiment is collapsing in slow motion. Helsinki-based Moonloot, founded in 2022, is also being shuttered in the same shake-up, and additional layoffs are hitting Netflix's central games team. The company declined to say how many jobs are gone in total.

The timing is what makes this one sting. Night School shipped Unhinged, a novel streamed horror experience played with a phone as a controller, on Netflix at the end of June. Co-CEO Greg Peters name-dropped the game on the July 16 earnings call, calling it out for 'really solid numbers' and using it as evidence that the cloud-streamed TV games bet was working. Six weeks later the studio behind it is gone. That is the most public contradiction Netflix's games division has managed in its five-year run at this, and it is going to be cited every time a publisher claims engagement metrics are healthy.

What Night School actually built

Before Netflix bought them in 2021, Night School was the small LA outfit that made Oxenfree, the 2016 supernatural teen thriller that became a cult favorite for its radio-tuned ghost conversations and dialogue that never paused the world. They followed it with Afterparty, the 2019 drinking-with-Satan comedy, and worked on a Mr Robot tie-in mobile game. Post-acquisition they shipped Oxenfree II: Lost Signals, a Black Mirror mobile spinoff, and most recently Unhinged. These are the kind of stylistically locked, conversation-driven games that do not get made by big publishers, and the team that built them is now on the market. Anyone who has shipped multiple IGF-quality titles in five years while also carrying a corporate parent's prestige project is worth poaching, and the recruiters know it.

The Moonloot piece

Moonloot is the quieter casualty. Founded in Helsinki in 2022, the studio was reportedly working on a multiplayer project for the Netflix ecosystem. Outside of a brief IGN interview back in 2023 the team kept a low profile, and we still do not know what they were actually building. Closing a four-year-old studio before the public has seen anything it shipped is a clean, painless decision for a parent company that wants to trim the org chart, and that is exactly what it was. Moonloot never had a hit to defend itself with.

Why Netflix is pulling back again

A Netflix spokesperson told Game File the closures are about prioritization around kids gaming, party games, story-driven fare, and titles with mainstream hooks like the recently released FIFA World Cup title. Translation: Netflix is done subsidizing the prestige indie bet. They want games that drive new subscriber sign-ups, not games that win BAFTAs. That pivot is the same one every Western media giant makes when their internal games experiment starts costing more than the marketing department can justify, and Netflix is now several rounds deep into it. Team Blue got killed in 2024. Boss Fight, the studio behind the Squid Game game, was shut down in October 2025 just after Peters publicly praised it. Spry Fox was sold back to its founders in December. The pattern is unambiguous.

What is left

After today's cuts, Netflix's first-party footprint is essentially Next Games, the Helsinki outfit behind the company's couch party lineup, plus a central team that works with external developers. Don't Nod is still publicly committed to a Netflix-franchise game, and a handful of streamed controller titles continue to ship. The platform approach, with games running on TVs and PCs and phones serving as controllers, is not going away. What is going away is the idea that Netflix would ever build the games itself. From here on out the streamer looks more like an HBO Max than a Sony: it licenses the brand and the audience, and somebody else takes the development risk. That model is fine for casual and licensed fare. It is bad news for any game designer who wanted a Netflix paycheck to make the kind of weird, narratively ambitious thing that Night School used to make.

Community reaction and what to watch

The reaction across games Twitter and the r/PS5, r/Games, and r/NintendoSwitch threads has been a mix of resignation and anger. Long-time Night School fans are pointing out that Oxenfree and Oxenfree II are still on sale on every storefront and that the studio left behind an honest-to-god body of work. Other posters are calling the six-week turnaround from a praised earnings call to a closure announcement the most damning indictment of Netflix games leadership yet. Wario64 surfaced the news with a 20+ like thread and the comment section is already split between 'I told you so' on Netflix's games strategy and 'hate to see Night School go' on the studio itself. For now, watch for the leftover Unhinged server status, look for Night School's senior leads to land at new studios within a month, and expect another round of the same cuts to hit a different Netflix team before the end of 2026.

Bottom line: Netflix still says games are 'an opportunity' to expand its entertainment footprint, but the studio that made the last thing the company publicly bragged about is now closed, and a second Finnish team has been killed before it could ship. That is not a strategy in any meaningful sense. It is a slow withdrawal, and the people paying the price are the developers who actually shipped.