Netflix is closing Night School Studio, the Oxenfree developer it bought in 2021, according to Engadget, citing Stephen Totilo at Game File. The move hits the first studio Netflix acquired as it began building a video game business alongside its streaming service. Night School’s work under Netflix included Oxenfree II: Lost Signals, the Black Mirror: Thronglets app, and Unhinged, a smartphone-controlled horror game that Engadget says arrived roughly six weeks ago. The timing is notable because Netflix co-CEO Gregory Peters had recently singled out Unhinged during the company’s July 16 Q2 2026 earnings call. On that call, according to Engadget, Peters said Netflix was seeing positive signals from cloud-based TV games and described FIFA World Cup and Unhinged as the company’s two most successful cloud-game debuts, with “really solid numbers” that ranked in Netflix’s top tier of game performance. The shutdown report therefore lands only weeks after Netflix publicly praised one of Night School’s latest titles. The reshuffle appears broader than one studio. Engadget reports that Netflix also reportedly plans to shut down Moonloot Games, a Helsinki studio the company founded in September 2022 to make original mobile games. Netflix is also cutting an undisclosed number of jobs from its in-house games team, according to the same report. A Netflix spokesperson told Game File that the company is prioritizing kids games, party games, narrative experiences, and mainstream titles, with Engadget naming June’s FIFA World Cup: Launch Edition as one example. The FIFA title was not developed internally: Engadget says it was made by third-party studio Refactor Games. That outside project has its own instability. Engadget reports that Refactor Games laid off 85% of its staff in early August after reports that its parent company, Delphi Interactive, pulled funding following the game’s release. The provided material does not establish whether Netflix’s strategy shift caused those layoffs; it only places them near the release of a title Netflix cited as a successful cloud-game debut. Netflix had expanded quickly in games between 2021 and 2024, according to Engadget, buying teams including Night School and Spry Fox. Night School’s co-founders Sean Krankel and Adam Hines previously described the acquisition in optimistic terms, including confidence that Netflix would preserve creative autonomy and help the studio operate at greater scale. The latest report suggests Netflix is narrowing that approach. Based on the provided material, the company is not exiting games outright; it is reducing internal studio exposure while emphasizing specific formats and broader-audience titles. The exact size of the job cuts, the full status of individual projects, and the longer-term plan for Netflix’s internal studios remain unclear from this cluster. Who benefits: Third-party developers aligned with Netflix’s stated focus areas—kids games, party games, narrative experiences, and mainstream titles—could benefit if Netflix leans more on external production. The provided material does not identify specific new partners beyond Refactor’s already released FIFA title. Who's exposed: Internal Netflix game studios and employees are most exposed, given the reported closures and undisclosed in-house job cuts. Smaller acquired teams may face particular pressure if their projects do not fit Netflix’s revised priorities.