Twitch, the renowned live gaming streaming platform, has announced a significant move in its global operations. The Amazon-owned company is set to shut down its services in South Korea on February 27, 2024, citing “seriously” high network costs as the primary reason. This decision by Twitch, highlighted in a statement by CEO Dan Clancy, marks a pivotal moment in the esports and live streaming world, particularly in a country known for its vibrant gaming community.
High Network Costs in South Korea
The core issue leading to Twitch’s withdrawal is the exceptionally high network usage fees in Seoul, reportedly ten times higher than in most other countries. This high cost has made the continued operation of Twitch in South Korea unsustainable, despite the platform’s significant effort to reduce expenses, such as adjusting video quality.
South Korea’s Esports Scene
South Korea is not just any market for Twitch; it is a country with a deep-rooted and passionate gaming culture. Home to esports megastar Faker, often referred to as the Michael Jordan of esports, South Korea has a competitive and dedicated gaming community. Its significance in the international esports community cannot be overstated, with over half of its 50 million population being esports enthusiasts.
Twitch’s Efforts and Challenges
Twitch’s CEO emphasized the company’s substantial efforts to cut down network costs, including experimenting with peer-to-peer models and downgrading streaming quality. However, these initiatives were not enough to offset the high operational costs. Operating in Korea at a significant loss, Twitch found no sustainable way to continue its business there.
Legal Context and Market Impact
South Korea’s internet fee structure, which allows service providers to charge data-heavy companies extra fees, has previously led to legal disputes with other streaming giants like Netflix. The closure of Twitch in South Korea will likely have a considerable impact on the streaming landscape. Following the announcement, shares in Afreeca TV, Twitch’s South Korean competitor, soared, indicating potential market shifts.
Community Response
The news of Twitch’s shutdown in South Korea has been met with disappointment and concern, especially among the country’s Twitch users and streamers. For many, Twitch was more than a platform; it was a significant part of their digital lives and careers.
