Two years after unveiling a new studio aimed at building 'the next big thing in gaming,' Netflix has closed it down

(Image credit: Netflix)

Netflix's big-time gaming ambitions seem to have hit a slippery patch, as Gamefile reports that the internal studio known as Team Blue has been closed.

Team Blue was revealed, without the catchy name, in October 2022, and appeared to signify a real escalation of Netflix's gaming ambitions. The company said in 2021 that its move into gaming would be focused primarily on mobile games, but a year later it was "seriously exploring" cloud gaming and hiring some big names for its second internal studio, including former Overwatch executive producer Chacko Sonny as studio head, former Halo Infinite creative lead Joseph Staten, and former Sony Santa Monica art director Rafael Grassetti.

Mike Verdu, then serving as vice president of gaming at Netflix, said when the studio was announced that "you don't get people like [Sonny] coming to your organisation to build the next big thing in gaming unless there's a sense that we're really in it for the long haul." Those words, unfortunately, proved to be the opposite of prophetic: The project never saw the light of day and all three executives are no longer with the company, according to the report.

You may like

A reason for the closure wasn't provided, but it feels rather sudden. Former Blizzard and Bungie design lead Gavin Irby, who joined the studio in October 2023, shared a job listing for a senior technical designer at the studio on LinkedIn just two months ago.

But there have been some recent changes at the top: Alain Tascan, previously the executive vice president of game development at Epic, joined Netflix in July as its new president of games, while Verdu moved to a new role focusing on "transformative innovation in game creation and development," whatever that means.

Netflix has had some notable successes with its mobile platform, including the well-regarded Oxenfree 2: Lost Signals and the Grand Theft Auto trilogy, which Take-Two CEO Strauss Zelnick said in February was "a resounding success, quickly yielding the highest rate of installs and engagement on [Netflix's] game platform."

Even so, while Netflix isn't backing off on games completely, it does sound like the focus is shifting. In an October investors call, co-CEO Gregory Peters said Netflix is "excited about games based on Netflix IPs," including Squid Game, Virgin River Christmas, and The Ultimatum, and also mentioned the upcoming release of Monument Valley 3, which will be exclusive to Netflix Games. The lofty ambitions of 2022 and "the next big thing in gaming" went entirely unmentioned.

Gamefile's Stephen Totilo said something very similar on X, writing that the closure of Team Blue is "definitely a sign of new leaders pulling back from one big bet," but adding that Netflix has other studios still operating and company executives "seem hyped on growth targets and show tie-in games."

Netflix confirmed with PC Gamer that the Gamefile report is accurate but declined to comment further.

Andy has been gaming on PCs from the very beginning, starting as a youngster with text adventures and primitive action games on a cassette-based TRS80. From there he graduated to the glory days of Sierra Online adventures and Microprose sims, ran a local BBS, learned how to build PCs, and developed a longstanding love of RPGs, immersive sims, and shooters. He began writing videogame news in 2007 for The Escapist and somehow managed to avoid getting fired until 2014, when he joined the storied ranks of PC Gamer. He covers all aspects of the industry, from new game announcements and patch notes to legal disputes, Twitch beefs, esports, and Henry Cavill. Lots of Henry Cavill.