Square Enix closes cloud gaming arm Shinra Technologies

The prospect of cloud gaming has been dealt another blow.

Square Enix opened its cloud-focused division Shinra Technologies – named after the eponymous company in Final Fantasy VII – back in September 2014, with former Square president Yoichi Wada taking the reins.

Among the firm’s aims was the creation of a ‘virtual supercomputer’ to power ‘radically new experiences’ backed by the cloud.

Square Enix originally sank $16 million into the forward-looking arm.

However, less than two years later, Shinra is predicted to record a loss of $16.8 million for the fiscal year ending March 2016.

It had sought investment to fund its continuing research and operations, but failed to attract third parties on board.

As a result of its continuing struggle, Shinra has now been announced for closure by Square Enix – despite the parent company’s reassurance that it still has “confidence” in cloud-based gaming.

"[Shinra], as a cloud platform operator, has been trying to raise funds necessary for further business operations from third party investors," Square said in a statement.

"However, it has found no prospective investors at this point, and therefore has to discontinue its business."

Shinra’s closure follows the death knell of another high-profile cloud gaming flagbearer in 2016, after OnLive shuttered last April.