Netflix closes Night School just after praising Oxenfree success

Netflix Pivots Strategy: Closing Studios as It Bets Big on Generative AI

In a move that signals a major strategic pivot, Netflix has announced the closure of developer Night School Studios and its Helsinki-based Moonloot studio. This decision comes less than two months after the release of their title Unhinged, prompting speculation about how the streaming giant is reshaping its approach to gaming.

Netflix stated that games remain a crucial avenue for expanding entertainment variety, highlighting success in areas like Kids (Netflix Playground), Party (Netflix Minigolf), Narrative (Unhinged), and Mainstream (FIFA World Cup: Launch Edition). Co-CEO Gregory Peters noted that FIFA and Unhinged were among their most successful cloud game debuts, solidifying gaming’s place in their entertainment mix.

Yet, following these successes, the company opted to streamline its focus. Night School Studios, which Netflix acquired in 2021, is now being closed down, and the Moonloot studio it founded in 2022 is also slated for closure. A spokesperson expressed gratitude for Night School’s contribution to storytelling through games, acknowledging their commitment to artistic excellence.

Night School was known for bold, boundary-pushing titles like the award-winning Oxenfree and its follow-up, Oxenfree 2: Lost Signals. They also released the compelling experience Afterparty, a game that explored themes of death and rebellion.

This studio acquisition was driven by Netflix’s desire to partner with creators who could set new standards in interactive storytelling. However, as the company looked toward future growth, its ambitions shifted away from traditional studio development and toward emerging technologies. Two years earlier, a studio intended to be a major gaming force was shut down before releasing any games.

The focus has now intensely shifted to Artificial Intelligence. Just months after making calls to adapt, the company’s vice president of games transformed into the vice president of generative AI for games. This emphasis is reflected in Netflix’s investment, including offering a director role with a starting salary of up to $840,000 plus benefits.

This focus on AI-driven development signals an intense drive for efficiency and strategic execution across the entire gaming business. Beyond studio closures, Netflix is also making additional cuts to streamline operations, demonstrating a commitment to operating more strategically within its Games division as it navigates the rapidly evolving landscape of interactive entertainment.