Netflix has been making many significant changes to how it adds games to its gaming platform since launching Netflix Games in 2021, when it acquired Night School Studio, the developers of Oxenfree. However, now in 2026, Netflix has closed or spun off a majority of the game studios it had acquired or built in-house. So let’s talk about why this confuses me.
Spry Fox: The Lucky Spinoff
Let’s start with the lucky spinoff, Spry Fox. This developer was one of Netflix’s last game studio acquisitions before two reshuffles that led to Netflix laying off a number of talented developers, which led to the closure of Night School Studio, Moonloot Games, Boss Fight Entertainment and an unnamed studio which was working on a competitive shooter by a crew of developers who had worked on games like Overwatch and God of War. Spry Fox and Next Games were the only developers who were not closed and were working under Netflix Game Studios; Spry Fox was spun off and kept all of its IPs, such as Cozy Grove and Triple Town, whilst Next Games suffered layoffs but is still a functional developer. Spry Fox’s escape was similar to Double Fine’s at Xbox. When you get into the nitty-gritty of it, Spry Fox had a lucky escape from Netflix.
Why This Is Happening
Netflix broke into the gaming industry spending hundreds of millions of dollars to develop, publish and licensing games as well as acquiring studios and building out Netflix’s cloud gaming ambitions. In the gaming industry this is unfortunately a rather common sight, studios are shuttered and developers are laid off frquently. Netflix which has always had a reputation of moving fast and breaking things (as is the way in Silicon Valley) which doesn’t wor when it comes down to game development. Netflix’s strategy shifts comes after years of investment into a service that has brought very little revenue into Netflix as their games do not include ads or microtransactions. Essentailly the reason Netflix keeps reshuffling its gaming organisation is because they spent more money than they were making back. Netflix is worth hundreds of billions of dollars but similar to what is happening at Microsoft with Xbox where investors want returns after years of costly investments.
Is Netflix Games The Next Google Stadia?
So let’s get the big comparison out of the way. No Netflix Games is very likely not going to be the next Google Stadia. Netflix benefits from a large portfolio of IP which can be adapted into video games where Google did not. Likewise Netflix Games is still publishing games on Netflix’s mobile app and expanding the offerings on Netflix Cloud Gaming. In my opinion Netflix has crunched the numbers and the studios they closed and spun off weren’t profitable enough and the games had lower engagement than Netflix would have hoped. It’s disappointing to see Netflix laying off developers and closing so many studios but hopefully all the developers affected will eventually land on their feet with new career opportunities.
What’s your opinion on the whole Netflix Game Studio fiasco? Let us know on social media.
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