Netflix pulls the plug on internal AAA studio unit led by Halo veteran Joseph Staten

Netflix has shut down Netflix Games, its AAA game studio in the US. The closure prompted key staff who had previously worked on games such as Halo, Overwatch, and God of War to leave. Some have attributed the studio’s closure to the media platform shifting its focus to smaller game titles.

The streaming platform had previously thrown its hat into the gaming world to grab a piece of the multi-billion dollar pie. The media company forayed into gaming in 2021 and has maintained its commitment to developing and expanding its IP to cater to its fans. The gaming expansion saw the studio grow substantially, recruiting talents from the gaming industry to bolster its ranks over the years.

Netflix closes down internal AAA studio

NEWS: Netflix has shut down their AAA game studio in California “Team Blue”🚀

✅Has been open for only 2 years
✅Planned to make PC shooter games

Source: Game File

(Sad to see many newly formed video game studios shut down before even producing anything🥺) pic.twitter.com/HcnaixYvrx

— Rino (@RinoTheBouncer) October 22, 2024

Game File revealed that Netflix was closing down its internal AAA game development studio based in Southern California. The studio, named Blue, was led by former Halo creative director Joseph Staten and other high-profile gaming veterans. The closure comes two years after the studio started operations.

The studio’s closure also came before it released a game to the public despite being linked to the development of ambitious, large-scale projects. 

The closure resulted in the departure of big-name veterans who were previously recruited to spearhead unnamed projects. Some of the leaving professionals include former Halo Infinite creative director Joseph Staten, Overwatch executive producer Chacko Sonny, and God of War art director Rafael Grassetti.

With Staten at the helm, the studio was expected to release a major PC shooter game. The key individuals’ departure has now halted Netflix’s ambitions to develop a major multi-platform game.

The AAA studio’s closure surprised many gamers, given that Netflix made a statement to GamesIndustry.biz in July stating that the company was happy with results over the last three years.

At the time, Netflix’s co-CEO and president, Gregory K. Peters, affirmed that the company was committed to gaming and that it has ambitious goals within the industry. Peters confirmed that it had over eighty games under development at the time

Changes to game development approach

Despite the previously revealed 80 games in development, Netflix’s releases have recently been modest. The media company continued to operate its game development studios in Helsinki, as well as Oxenfree’s developer Night School Studio.

During Netflix’s Q2 2024 earnings call on July 18, co-CEO Ted Sarandos stated that the company aimed to develop games based on shows to engage fans with new content and storylines between seasons.

“I think the idea of being able to take a show and give the super fan a place to be in between seasons, and even beyond that, to be able to use the game platform to introduce new characters and new storylines or new plot-twist events”

Ted Sarandos-Netflix co-CEO 

On the same note, Netflix released games that were often tied to popular series, such as ‘Selling Sunset’ and ‘Emily in Paris.’

The dissolution of the Blue studio and the release of more Netflix content is speculated to stem from a shift to a more cautious game development direction after rivals such as Facebook faced challenges. Netflix’s new approach is to utilize its entertainment portfolio rather than compete directly in the high-stakes world of AAA gaming.