In February of next year, Twitch’s widely used video game livestreaming platform will cease its activities in South Korea, citing elevated operating expenses and network fees as the primary reasons for the decision. CEO Dan Clancy has been apologetic about letting down Korean users and believes the country’s laws have made it “unsustainable” to operate there. However, he says the company will continue to provide its service in other countries.
In a blog post, Clancy said Twitch had to make the tough decision because it has been operating in Korea at a significant loss. He also explains that network fees in the country are still ten times more expensive than in most other countries, which makes it “prohibitively expensive” to operate there.
He adds that the company spent significant money on network infrastructure to lower these costs but could not find an economical solution. In addition, he says that a recent legal battle with local internet service providers over usage charges has led to the company being ordered to contribute to those costs, which further increases expenses.
Twitch will cease operations in Korea on February 27, 2024. It will stop onboarding new affiliate streamers and partners from that country and will stop paying royalties to streamers who are South Korean residents. The company will also discontinue its Crown Channel for video game broadcasters.
Other streaming platforms may fill the void left by Twitch’s departure. Korean online portal Naver started a closed beta test of its upcoming game streaming platform for employees this week and plans to release the service for consumers in 2022. Naver’s new platform will support full high-definition streaming and a user interface suitable for video game broadcasting.
Nevertheless, it is still being determined whether the new service will be able to compete with Twitch’s popularity in the country. The site has over a million registered users and is the country’s most visited live-streaming website. It has also hosted esports events like the League of Legends World Championship and Apex Legends Tournament.
Amid the uncertainty over what will replace Twitch in the country, some of its popular streamers are urging their followers to move to other platforms. One of them, Joker, the top streamer on the platform, has more than a million followers and streams several times daily.