Netflix Shuts Down AAA Video Game Studio in Southern California

Netflix has shut down its Southern California-based video game studio, referred to internally as “Team Blue,” which had a specific focus on producing AAA games.

The studio, one of several opened by the streamer during its still-young push into gaming, tapped execs including “Overwatch” producer Chacko Sonny, “Halo” alum Joseph Staten and “God of War” art director Rafael Grassetti. All three have now exited Netflix amid the closure of the team Blue home base in October, a source has confirmed to Variety.

Netflix declined Variety‘s request for comment Tuesday.

Netflix launched its games business in November 2021 and has since acquired four gaming studios: Night School, Boss Fight, Next Games and Spry Fox. The streamer also built two internal studios, the team Blue one in Southern California and another in Helsinki.

In July, Netflix hired Epic Games’ Alain Tascan as its new president of games following the decision to move Facebook and EA vet Mike Verdu, previously Netflix’s vice president of games, into a new role focused on “transformative innovation in game creation and development.”

While Netflix’s other gaming operations remain intact and the streamer maintains its overall commitment to growing its games business, per insiders, this decision leads to questions regarding Netflix’s ambitions in TV and cloud gaming. Netflix has released more than 100 mobile games so far, but it is unclear what AAA projects Team Blue was working on and what Netflix’s plans are for moving forward in non-mobile games.

Meanwhile, Netflix has been signaling its success in making games based on its own IP with the promise it will churn out one new game in its “Netflix Stories” line per month, the latest being based on its popular teen drama “Outer Banks.” Other “Netflix Stories” mobile games have been released based on “Emily in Paris,” “Virgin River” and “Love Is Blind,” and the streamer is building to the release of standalone mobile titles in the universes of “Squid Game” and Zack Snyder’s “Rebel Moon” franchise.

Game File was the first to report the news that Netflix had shut down the Team Blue studio.