Netflix shuts down its AAA gaming studio even before first release

Netflix has closed its AAA gaming studio, Team Blue. The closure affects several high-profile industry veterans who joined the studio over the past two years, as reported by Game File and confirmed by Netflix.
The studio, which was developing an unannounced multiplatform AAA game based on original IP, had assembled notable talent including former Overwatch executive producer Chacko Sonny, Halo franchise veteran Joseph Staten, and God of War art director Rafael Grassetti. All three executives have now left the company.
Team Blue was established in late 2022 when Netflix hired Sonny to lead the studio. The company expanded its roster in spring 2023 with Staten joining as creative director and Grassetti as art director, signalling Netflix's intentions to move beyond its mobile-focused gaming strategy.
The closure represents a potential scaling back of Netflix's ambitious gaming plans. While the streaming giant continues to offer over 100 mobile games through its subscription service, including ports of popular titles like Grand Theft Auto and Hades, the shutdown of its AAA studio suggests a possible retreat from larger-scale game development.
Netflix's gaming division has primarily focused on mobile titles and acquisitions of existing studios, such as Night School Studio, which developed Oxenfree II. The company has also partnered with external developers to create games based on its popular shows and films, including upcoming titles like Chicken Run: Eggstraction and Squid Game: Unleashed.