Netflix has shut down its new gaming studio, which was announced two years ago. The studio was aimed at creating the "next big thing in gaming."

Gamefile reports that Netflix's ambitious gaming plans have hit a snag. The internal studio Team Blue, which was formerly known as Netflix Studios, has been shut down.

Team Blue, without a catchy name, was revealed in October 2022 and seemed to indicate a real escalation in Netflix's gaming ambitions. In 2021, Netflix said that it would focus on mobile gaming, but a decade later, the company was "seriously investigating" cloud gaming, and had hired some big names to work in its second internal studio. These included former Overwatch executive director Chacko Sonny, former Halo Infinite Creative Lead Joseph Staten, as well as former Sony Santa Monica Art Director Rafael Grassetti.

Mike Verdu, who was vice president of gaming for Netflix at the time, said that when the studio's announcement was made, "you don't get someone like [Sonny] to come to your organization to build the next biggest thing in gaming unless you have a sense that you're in it for the long run." Unfortunately, those words proved to be far from prophetic. The project never made it to the light of day, and all three executives have left the company.

The reason for the closing was not given, but it seems rather sudden. Gavin Irby (former Blizzard and Bungie Design Lead) who joined the studio October 2023 shared a job posting for a senior designer at the studio just two months earlier on LinkedIn.

Alain Tascan was previously the executive vice-president of game development at Epic. He joined Netflix as its president of games in July, while Verdu took on a new position focusing "transformative innovations in game creation and game development," whatever this means.

Netflix has seen some notable success with its mobile platform. These include the highly regarded Oxenfree 2 : Lost Signals, and the Grand Theft Auto Trilogy, which Take-Two's CEO Strauss Zelnick stated in February as "a resounding, resulting in the highest rate of installation and engagement on [Netflix’s] game platform."

Netflix doesn't seem to be abandoning games entirely, but it does sound as if the focus has shifted. Gregory Peters, co-CEO of Netflix, said in an October investors' call that Netflix was "excited" about games based upon Netflix IPs, including Squid Game Virgin River Christmas and The Ultimatum. He also mentioned the upcoming Monument Valley 3 release, which will be exclusively available through Netflix Games. The lofty goals of 2022, and the "next big thing in gaming", were completely unmentioned.

Stephen Totilo, Gamefile's Stephen Totilo, said something similar on X. He wrote that the closure Team Blue was "definitely a signal of new leaders pulling away from one big bet." But he added that Netflix still has other studios operating and that company executives "seem excited about growth targets and show-tie-in games."

Netflix confirmed to PC Gamer the accuracy of the Gamefile report, but declined to comment on further.