Netflix Closes its Sole Triple-A Studio, Faces Departure of Key Industry Talent

Netflix recently announced the closure of one of its internal game studios, Team Blue, which was on the brink of releasing a high-profile AAA title. Founded in 2022 and based in Los Angeles, Team Blue was reportedly focused on developing a PC game before its sudden shutdown. The closure not only resulted in the loss of the studio but also saw the departure of key talent that Netflix had prominently hired. Additionally, there have been reports of layoffs within the company’s games division following this development.

According to a report by Game File, Team Blue was working on a "big-budget multi-device strategy" at the time of its closure. Netflix had brought on board notable industry figures to lead the studio, including Chacko Sonny, former executive producer of Overwatch; Joseph Staten, previously creative lead on Halo; and Rafael Grassetti, formerly of Sony Santa Monica as the art director. With the closure of the Los Angeles studio, all three individuals have parted ways with Netflix.

Despite this setback, Netflix continues to operate several internal studios dedicated to creating games for its platform. The streaming giant has acquired studios such as Night School, Boss Fight, Next Games, and Spry Fox, in addition to establishing its own studios. Apart from Team Blue, Netflix also operates a studio in Helsinki. While these studios are reportedly unaffected by the closure of Team Blue, recent reports suggest that Netflix has made staff reductions within its games division.

In a shift in strategy this year, Netflix made changes to its games division leadership. Mike Verdu, who was instrumental in spearheading the company’s games initiative, transitioned to a new role. Alain Tascan was appointed as the president of games earlier in the year. Prior to Tascan’s appointment, Leanne Loombe, Netflix’s VP of external games, indicated the company’s intention to adopt a mobile-first approach to game launches. Loombe highlighted that Netflix subscribers show a preference for short, "snackable" mobile games.

The closure of Team Blue and the subsequent reshuffling within Netflix’s games division underscore the competitive and ever-evolving nature of the gaming industry. As Netflix navigates these changes, the company continues to focus on delivering engaging gaming experiences to its subscribers through its diverse portfolio of internal and acquired studios.