Twitch, the global streaming platform known for its gaming and esports content, is set to cease its operations in South Korea on February 27. This decision comes as the company faces challenges related to the high network costs associated with operating in the country.
Twitch CEO Dan Clancy revealed the company’s decision in a blog post, explaining that despite considerable efforts to reduce network costs in South Korea, the fees to operate there remained exorbitantly high. He noted that the cost of operating in South Korea was 10 times more expensive than in most other countries, making it unsustainable for Twitch to continue its business operations in the region.
Clancy mentioned that Twitch had attempted various measures to lower network costs, including experimenting with a peer-to-peer model for source quality and capping source quality at 720p. However, these efforts did not significantly alleviate the financial burden of operating in South Korea.
The decision to withdraw from South Korea represents a unique situation for Twitch, as it marks the company’s exit from one of the world’s largest esports markets. Clancy acknowledged the importance of South Korea in the international esports community and expressed gratitude for the communities built by South Korean users on the platform.
While Clancy did not specify the exact reasons behind the exceptionally high network costs in South Korea, he alluded to the possibility that it could be related to recent deliberations in the country regarding tech companies’ responsibility to cover network costs.
The decision to shutter its South Korea operations reflects the challenges that global tech companies may face when operating in different regions with varying regulatory and cost structures. Twitch’s move underscores the significance of managing operational costs and financial sustainability in the rapidly evolving streaming industry.
The shutdown of Twitch’s business in South Korea is expected to impact content creators and users in the country, highlighting the complexities and considerations that global streaming platforms must navigate in their quest for international expansion.