The company behind the cloud gaming platform Shadow has filed for bankruptcy in the United States and in receivership in France, according to 9to5Google. Shadow recently posted an update to his blog confirming that he was undergoing a “reorganization” to get rid of the debt he had accumulated by building his cloud gaming platform in multiple countries.
Shadow, who is owned by a France-based company named Blade, said the covid-19 pandemic caused such a surge in demand that it couldn’t keep up, making the cloud service “a victim of its own success.” Gizmodo recently spoke with Shadow about the future of cloud gaming and 5G, and the company described how it was struggling to meet demand. Shadow cited his long waitlist for subscribers and his difficulty accessing the hardware components he needed, like graphics cards, to build more servers to increase capacity. Still, the company believes it can make a difference, with the right investor.
“Shadow’s potential has never been greater – now we need to make sure it becomes a reality by regaining a new solid financial foundation to build a sustainable and profitable business,” the company said in its blog post announcing reorganization.
When Gizmodo spoke with Shadow of Consumer Business Vice President Florian Giraud in February, he said the company is working hard to get more funding so Shadow can scale faster and remove more users from. his waiting list. Shadow doubled its user base in the United States in 2020 alone and also began to expand into South Korea, but Giraud said the company was careful not to “move too quickly.” It appears that scaling up faster than it already was would have caused the company to take on even more debt than it had already accumulated.
Gizmodo reached out to Shadow for further comment, and the company has been pretty forthright with what happened.
“Shadow was less successful in building a profitable business: developing this amazing product turned out to be more expensive than expected, with debts holding us back now,” Giraud told Gizmodo by email. “As a result, Shadow lacks funding and financial margins to invest more and meet rapidly growing demand for our service. “
However, despite the bankruptcy proceedings, Giraud said that potential investors have shown interest in acquiring and investing in the company, and that “the selection process has started and is expected to take a few weeks”.
As Gamesindustry.biz noted, France-based server maker 2CRSi currently owns 30.2 million euros ($ 38.1 million) of hardware that Shadow uses in its cloud servers. The suspension will last until “all payments or lease payments are paid by Blade”, 2CRSi said in a recent press release announcing that he would take legal action against Shadow’s parent company to recover this material.
“Given the shortage of electronic components and more particularly of graphics cards since the end of 2020, there is a strong demand on the market for this type of equipment and 2CRSi has already received indications of interest from several customers for the servers concerned. “Said 2CRSi. .
It might sound scary, but for current Shadow subscribers, nothing is changing just yet. Users can continue to access the service as usual, but anyone waiting for a Shadow Ultra or Shadow Infinite subscription will have to wait a bit longer before those subscription options become available.
“Pending a new owner, the release of these new configurations is on hold for the moment,” Shadow said. “We will keep you posted when we have information to share. “
The company provided a full Faq to answer the most frequent questions from subscribers.
While Shadow is primarily known as a cloud gaming platform, it does things differently than Google Stadia and Nvidia’s GeForce Now. It allows users to rent an entire virtual PC for a monthly subscription, so not only can you install any game you want to play, you can run other programs like Adobe Premiere Pro, AutoCAD, or any other that would benefit from a -end PC.
But on the gaming side, Shadow does not suffer from one of the major pitfalls of cloud gaming at the moment: content. Because it provides an entire PC in the cloud, users can install any game on it from their Steam, Epic, GOG, Origin and other libraries. To play a game on GeForce Now, it must be compatible with the platform. To play a game on Stadia, you have to buy it from their store or pay $ 10 per month for Pro and hope it’s free.
However, Nvidia and Google have the advantage of providing their own capital and equipment to run their cloud game servers. For a platform like Shadow that relies on investors and rental equipment to keep people connected to their virtual PCs, it’s clearly a lot harder to stay afloat.