Shadow's Cloud Gaming Service Files for Bankruptcy, Overshadowed by Its Own Prosperity
Revamped Dispatch
The digital gaming juggernaut, Shadow, has experienced turbulent times, plunging into bankruptcy in the US and receivership in France, as confirmed by 9to5Google. In a nutshell, Shadow, owned by the France-based company Blade, revealed a reorganization to shed off mounting debt accumulated in constructing the cloud gaming platform across various nations.
In explaining its predicament, Shadow claimed that the exploding demand for its services during the Covid-19 pandemic made it a "victim of success." Seeking insights into the future of cloud gaming and 5G, Gizmodo spoke with representatives from Shadow. The company confided their struggles to maintain pace with surging demand, battling long subscriber waiting lists and hardware scarcity, chiefly graphics cards needed for their servers to keep the quality bar high.
Despite these hurdles, Shadow expressed optimism that a strategic investor would help it rise from the ashes. "Shadow's potential has never been greater-we now need to ensure it turns into reality by restoring financial stability to lay a solid base for a sustainable and profitable business," announced the company, promising a new lease of life to gamers worldwide.
To overcome the financial crunch, Shadow had been attempting to secure more funding, as indicated by the Vice President of Consumer Business Florian Giraud during a conversation with Gizmodo in February. The company had scaled rapidly, doubling its U.S. user base in 2020 and venturing into South Korea, but Giraud cautioned against growing too rapidly for fear of crippling finances.
Upon learning about the bankruptcy proceedings, Shadow reached out to Gizmodo, shedding light on the predicament. "Shadow has failed to create a profitable business: developing this awe-inspiring product turned out to be pricier than we anticipated, leaving us indebted," Giraud stated via an email to Gizmodo.
With investor interest already piqued, the selection process has commenced, with a commitment to decide within a couple of weeks.
Meanwhile, a French server manufacturer, 2CRSi, holds onto €30.2 million ($38.1 million) worth of hardware vital to Shadow's cloud servers. 2CRSi has announced its intention to start legal proceedings against Blade to reclaim the equipment once all debt payments have been honored.
Despite its shaky financial standing, existing Shadow subscribers need not worry for the moment as they can continue enjoying the service like usual. However, they should anticipate a delay before the Shadow Ultra and Shadow Infinite subscription options become available. Shadow thankfully provided a comprehensive FAQ to address common questions from subscribers.
Compared to similar services like Google Stadia and Nvidia's GeForce Now, Shadow differs by giving users access to a complete virtual PC rented on a monthly basis. This way, they can install any game or software they desire on the platform, catering to their specific needs and preferences.
Unfortunately, Nvidia and Google have an edge with their substantial capital and equipment resources, making it significantly more difficult for cloud-based platforms like Shadow, which rely on external investment and leased equipment to maintain steady connections for users worldwide.
Shadow's financial predicament is due to the swift expansion of demand for its cloud technology during the pandemic, leading to struggles with hardware scarcity and long waiting lists. The company is seeking strategic investors to help regain financial stability, ensuring a sustainable and profitable future for their business.
Despite entering bankruptcy proceedings and reorganization plans, Shadow reassures existing subscribers they can continue using the service. However, users might experience a delay before accessing the Shadow Ultra and Shadow Infinite subscriptions.
Compared to competitors like Google Stadia and Nvidia's GeForce Now, Shadow offers a unique service by providing users a complete virtual PC on a monthly basis, allowing them to install any game or software they desire.
With investor interest already expressed and the selection process underway, Shadow awaits a decision within a couple of weeks, hoping to restore financial stability and reaffirm their position in the tech industry's future landscape.
