So I tried this new Shadow Casting feature

And I must say I'm not all that impressed.

My suggestions is to introduce two improvements:

• make the shadows blurred instead of rock solid,
• make the shadows appear under their sprites not over them,

No but seriously. This isn't supposed to look like this, is it?

Here's stuff that I've seen around the forum:

1.To get shadows blurred all you need is to apply shader to shadow layer

2. There is a fairly recent post about placing shadow under sprites here in general forum, but you got to search for it.

In the properties of the Shadow Light you can adjust the radius of the shadows to achieve soft edges.

To get the shadows under your shadow casters instead of ontop of them, adjust the Z order so that your Shadow Light is under the shadow casters.

Note that soft edges only work in WebGL mode (according to the properties area) and also your Shadow Light must have a height of 0 for it to work.

Good luck!