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Netflix Closes Night School Studio and Moonloot in Major Gaming Strategy Pivot.

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Netflix Closes Night School Studio and Moonloot in Major Gaming Strategy Pivot.
Netflix Shuts Down Night School Studio and Moonloot in Strategic Mobile Gaming Pivot

Netflix has officially confirmed the closure of two internal game development studios: Night School Studio and Moonloot. In tandem with the studio shutdowns, the streaming giant announced targeted layoffs across its broader gaming division, though it declined to disclose the exact number of impacted employees.

The decision marks a dramatic shift in Netflix’s gaming ambitions. Night School Studio renowned for its critically acclaimed narrative adventure Oxenfree and its recent title Unhinged was acquired in 2021 as Netflix's very first gaming studio acquisition. Moonloot was subsequently brought under the Netflix umbrella in 2022 to strengthen its internal development pipeline.

The closures reflect a fundamental evolution in Netflix's gaming strategy. While the company initially focused on standalone native mobile titles for smartphones, it is now shifting its resources toward casual and party games optimized for TV screens, utilizing smartphones as controllers to drive higher living-room engagement.

The reason Netflix is ​​shifting away from traditional mobile gaming is that, despite the abundance of free games available to subscribers, industry data shows that less than 2% of active Netflix users play mobile games regularly. Downloading separate apps from the iOS and Android App Stores creates inconvenience, making it difficult for average subscribers to discover games.

By streaming simple party games directly to smart TVs and using smartphone apps as touch controllers, Netflix eliminates the need for expensive game consoles or additional downloads. This leverages the core space where people already use Netflix the living room TV making party gaming a seamless and unrestricted social activity for families and groups.

Building a high-end in-house game studio requires massive capital investment and long development cycles. Following the closure of several major tech platforms' game studios, Netflix is ​​revamping its gaming business model by focusing on easy-to-play, high-turnover casual games and licensing games from popular external developers, rather than incurring the exorbitant costs of operating an in-house game studio.

 

Source: Game Developer 

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