In a surprising move, Netflix has closed down one of its gaming studios, Blue, just three years after venturing into the gaming industry. The studio, led by former Overwatch executive producer Chacko Sonny, was developing a multi-platform AAA game for an original IP, but was shut down before the game could be announced or released.

This marks a significant shift in Netflix's gaming strategy, which had been expanding rapidly since 2021. The company had been releasing a steady stream of games on its platform, including mobile exclusive ports of iconic games like Grand Theft Auto and Hades, as well as internally developed exclusives like Cozy Grove: Camp Spirit and Oxenfree II: Lost Signals.

The closure of Blue raises questions about Netflix's grander AAA ambitions and whether its trend of expansion is coming to an end. The move may also impact the company's ability to attract top gaming talent and develop high-quality, original games.