Twitch to End South Korean Operations in 2024 Citing High Network Expense

Amazon-owned streaming platform Twitch Twitch made the announcement today regarding its upcoming shutdown in South Korea, scheduled for February 27, 2024. The company cited the steep operating costs and network fees as the main reasons for this decision.

"Twitch has been operating at a considerable loss in Korea, and regrettably, we see no viable way to operate sustainably in that market,\" Dan Clancy, the CEO of Twitch, stated.

Clancy highlighted that network costs in Korea South Korea remain significantly higher—about ten times more—than what most other nations charge. Despite their extensive efforts to cut costs and keep the business afloat, Twitch is grappling with a financial situation that makes continuing operations in Korea untenable.

In March 2023, Emmett Shear, Twitch's co-founder and its only CEO for the past 16 years, stepped down from his executive position to focus on family commitments. OpenAI That same month, Twitch cut more than 400 jobs after falling short of user engagement and revenue goals.

Twitch has faced ongoing scrutiny related to various issues, including how it compensates creators, harassment concerns, and the conduct of streamers in gambling-related activities. The platform received significant backlash from its creators last year when it opted to abolish the previously favorable 70/30 revenue splits for its top earners.

At that time, Twitch claimed that the decision was triggered by rising fees from

, its parent company involved in cloud services. This move caused dissatisfaction among creators and raised larger concerns regarding the platform’s financial policies. Amazon Web Services High Network Charges in South Korea Raise Alarm

Unlike many nations, South Korea permits internet service providers to impose additional charges on companies that generate heavy data usage. Recently concluded legal disputes between South Korea and Netflix regarding network charges have drawn attention.

and SK Broadband, a significant internet provider in South Korea, have settled a series of lawsuits focused on network usage fees.

In September, Netflix These disputes primarily centered on whether Netflix should cover the costs associated with increased network traffic and infrastructure maintenance. Fortunately, both parties have chosen to embark on a cooperative partnership moving forward.

Twitch stated it has invested considerable effort into discovering cost-effective strategies to maintain its operations in

by lowering expenses, including lowering the maximum video streaming quality, but ultimately, this approach is no longer workable. South Korea \"We want to emphasize that this was an incredibly tough call for us, and everyone at Twitch feels profoundly saddened by it,\" the company shared in a statement released on Wednesday.

Multiple South Korean media outlets have noted that shares for Afreeca TV, a key competitor to Twitch within the South Korean streaming landscape, saw a rise of nearly 30% in late trading on the Seoul Stock Exchange.

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