Netflix has decided to close its internal game development team, known as "Blue," which was established in late 2022, according to a report by Game File.

The studio was tasked with creating high-budget "AAA" games under the leadership of Chacko Sonny, a former executive from Blizzard, who was notable for his work on the popular multiplayer shooter, Overwatch.

AAA games are generally recognized for their significant production costs, often exceeding $80 million.

Following the shutdown, Sonny, along with former Halo creative lead Joseph Staten and ex-Sony art director Rafael Grassetti, have all left Netflix. The company has officially confirmed the closure of the Blue studio.

Just four months prior to its closure, Blue was actively recruiting engineers, as indicated by LinkedIn posts from its staff at that time.

While high budgets can lead to exceptional games with stunning visuals, they also pose substantial risks for new studios, as these projects can take anywhere from five to seven years to complete. Such long-term investments might not yield immediate profits and could lead to significant financial losses.

Despite this setback, Netflix is not abandoning its gaming endeavors entirely. A representative from the company stated via email to PCMag that it remains committed to the gaming sector over the long haul.

However, Netflix has reduced its spending on gaming initiatives. In 2023, the company cut its budget for new content by 32% compared to the previous year.

Netflix's foray into gaming began in 2021, offering subscribers complimentary access to various games, including the romance-themed title, Too Hot to Handle, as well as older versions of Grand Theft Auto. The company also expanded its portfolio by acquiring studios like Night School Studio, Boss Fight, and Next Games to develop new titles.

Yet, despite Netflix's ongoing efforts, the reception of its gaming projects appears to be lukewarm. Data from late last year revealed that less than 1% of Netflix's subscriber base engages with the games daily.

As of now, Netflix boasts over 80 mobile games available through its platform and provides options for users to play some games on their TVs, using an iPhone as a controller.

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