Twitch, the popular video streaming service, will shut down its services in South Korea next year, the company said on Tuesday, after struggling for years with the high costs of operating in the country.
Twitch was once one of the most popular platforms for gamers in South Korea, even as it competed with domestic services like AfreecaTV and giants like YouTube, analysts say. The service, owned by Amazon, draws about 35 million visitors a day worldwide, according to the company.
“Twitch was once in the driver’s seat among South Korean pro gamers for a while,” said Ha Jae-pil, a professor of e-sports at Kookje University in South Korea. Some League of Legends, Overwatch and Apex Legends tournaments in the country were streamed exclusively on Twitch, he said.
Then a downgrade of video quality to a resolution known as 720p, which the company said reduced its operating costs, made text less legible and caused users to jump over to YouTube, he said. “Twitch’s influence has been weakened since,” he said.
Now, it plans to shut its South Korean business on Feb. 27, 2024.
“While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries,” the company added. “Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.”
South Korea’s high network usage fees have prompted legal disputes. Netflix recently sued a South Korean internet service provider, arguing that it had no obligation to pay network usage fees. In 2021, a court in Seoul upheld the provider’s right to receive such fees.
Daniel Clancy, Twitch’s chief executive, said on social media that “this was a very difficult decision that we delayed for some time,” adding that he was “aware that this will have a real impact on them.”
Twitch said that it would help South Korean streamers on the platform migrate to alternative services by lifting the ban on broadcasting streams simultaneously on another platform, and by encouraging them to share links to their channels on other services.