Almost two years ago, Netflix surprised many by opening a new game studio and hinting it would start building high-quality video games. Now, the streamer is shutting it down.
The top-tier studio, called Team Blue, was led by Chacko Sonny, a well-respected former executive producer at major gaming company Blizzard Entertainment.
In late 2022, job listings also revealed that Netflix was looking for recruits to work on new AAA PC games. Triple-A projects are usually quite big and known for their depth of features and visual quality – in other words, these are expensive and popular titles.
Observers of the industry obviously deduced that Netflix, already offering more than 100 mostly mobile games for its subscribers, was now diving into the PC and console gaming arena.
However, the streamer’s rivalry with studios such as Ubisoft, Rockstar Games, or Activision will have to wait because Netflix has shut down the project before the studio, based in Southern California, could even release a single title.
A company representative confirmed the news to Game File and said that all big hires, including Sonny, were no longer at Netflix.
Netflix may have learned that making triple-A video games is a lot harder – and way more expensive than it looks from the outside. The development budgets alone can reach $200 million, according to a report from the United Kingdom’s Competition and Markets Authority.
Yes, Netflix reported revenues of $9.83 billion in its Q3 earnings and definitely has cash at hand – but the streamer has probably decided that throwing hundreds of millions at unguaranteed success wouldn’t be wise.
Besides, the video game industry as a whole is facing difficulties. Some researchers estimate year-on-year growth to be just 2.1% in 2024.
Of course, triple-A video games aren’t everything. There’s a lot of money in the mobile industry anyway. Besides, to Netflix, gaming is a way to add value to its subscribers – they’re eagerly waiting for the second season of Squid Game and will be able to enjoy a companion game set in that world, for example.
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