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Netflix said it is in the process of closing two of its gaming studios, as the division is making another round of organizational changes.
Night School viewed the acquisition at the time as “such a natural pairing” as the gaming studio wanted to stretch its narrative aspirations on original games and Netflix has a reputation of giving TV and film creators an “unprecedented canvas” to bring entertainment to millions of people, according to a blog post on its website.
Since 2021, Netflix has expanded its reach in gaming but with mixed results. The company is launching several TV games this holiday season for families — will this help generate the popularity for games that Netflix seeks?
In an email, a Netflix spokesperson said it is eliminating roles because the company believes it can operate more strategically and efficiently in its games business. The spokesperson declined to provide the number of workers affected.
Last year, the company shut down Boss Fight Entertainment, one of the gaming studios it acquired in 2022.
Games on Netflix have had mixed results. At the end of 2024, Epic Games executive Alain Tascan joined Netflix as president of the division and under his leadership, it has focused on key areas including kids, party games like “Netflix Minigolf,” narrative games and mainstream games like “FIFA World Cup: Launch Edition.” The company also removed games in part because they did not have high engagement from its library.
Last year, Netflix unveiled several party games including “Boggle Party” and “Pictionary: Game Night.”
In June, Netflix released a narrative game made by Night School called “Unhinged” about a woman who is trapped inside her apartment during a hurricane and is trying to find safety. Voice actors in the game include Zoë Kravitz and Sadie Sink.
In a July earnings presentation, Co-CEO Greg Peters reminded analysts of the market opportunity for games, with $150 billion in consumer spending not including ad revenue or markets in China and Russia. He said the streamer is seeing solid numbers from its cloud games such as “FIFA” and “Unhinged” and higher adoption and retention in the cloud games than mobile games. He also said there has been strong engagement and growth from kid games.
“We’re just getting started here,” Peters said. “We’re scratching the surface in terms of what we think the total potential of the space offers for us.”
Netflix believes games are the future, but after Google bowed out of the medium, should developers be wary?
The layoffs come as Netflix stock has declined 37% from a year ago. Investors are concerned about how much time people are spending on Netflix compared with rivals like YouTube. YouTube represents about 14% of streaming-watch time by U.S. viewers on TVs, compared with Netflix’s 8% in May, according to Nielsen.
In addition to games, Netflix has added other types of content to its streaming service over the years including live events like NFL football games and video podcasts.
