Netflix's Gaming Ambitions Falter as Blue Studio Shutters

Netflix's foray into the gaming industry has hit a significant roadblock as the company has shut down one of its most high-profile video game initiatives, the Californian studio known as "Team Blue." This studio was stocked with former developers from acclaimed franchises like Halo, God of War, and Overwatch, and was seen as a key part of Netflix's efforts to expand its entertainment empire beyond film and TV streaming.

Navigating the Treacherous Terrain of the Gaming Industry

The Rise and Fall of Team Blue

The closure of Team Blue comes as a surprise to many, given the studio's impressive pedigree and the significant investment Netflix had made in its development. Led by former Overwatch executive producer Chacko Sonny and former God of War art director Rafael Grassetti, the team was working on a "brand-new AAA multiplatform game and original IP," according to Joseph Staten, an original Halo developer who joined the team in April 2023.The decision to shutter Team Blue highlights the challenges Netflix has faced in establishing itself as a successful gaming publisher and platform. Despite its deep pockets and ambitious plans, the company has struggled to find a foothold in the highly competitive and rapidly evolving gaming industry.

Netflix's Foray into Gaming: A Bumpy Ride

Netflix's gaming ambitions can be traced back to the turn of the decade, when the company began stocking mobile games on its streaming platform. Since then, the company has made several strategic acquisitions, including the purchase of Oxenfree 2 developers Night School Studio in 2021, and Next Games and Boss Fight Entertainment in 2022.In 2022, it also emerged that Netflix was hiring in Los Angeles to develop a triple-A PC game, further signaling its intent to become a major player in the gaming space. The company's efforts to establish itself as a gaming publisher and platform have been met with mixed results, however.

Streaming Games: A Promising but Challenging Venture

In August 2023, Netflix trialed game streaming, and even approached Rockstar about bringing the Grand Theft Auto Trilogy to its platform. As of July 2024, Netflix Games had over 80 games in development, with around 100 available already. However, the company's co-CEO and president, Gregory K Peters, conceded that engagement with games on Netflix remains "quite small."The closure of Team Blue is not entirely surprising, given Netflix's lack of experience in founding and running its own game development teams. As Kotaku's John Walker observes, "AAA" multiplatform originals crafted by seasoned blockbuster developers are expensive, and the kind of prestige item that companies may choose to eliminate when faced with financial pressures.

The Future of Netflix's Gaming Ambitions

The fate of Team Blue's former members, including Grassetti, Staten, and Sonny, remains uncertain. However, given their impressive credentials, it is likely that they will land on their feet and continue to contribute to the gaming industry in some capacity.As for Netflix's gaming ambitions as a whole, the company's vision appears to be somewhat unclear. While the potential for synergies between gaming and its core film and TV streaming business is evident, the company's approach has been described as lacking a clear strategic direction.Nonetheless, the gaming industry continues to be a lucrative and rapidly growing market, and it is unlikely that Netflix will abandon its efforts to carve out a slice of this pie. The company's willingness to experiment and invest in new initiatives, even in the face of setbacks, suggests that it remains committed to exploring the potential of gaming as a complement to its entertainment offerings.