“This morning, I announced to our Korean community that we have made the difficult decision to end Twitch operations in Korea on February 27, 2024,” explains Dan Clancy, CEO of Twitch. The famous streaming platform has in fact decided to close its doors in this country where video games play a major role. Far from a political reason or a change in regulations, Twitch highlights internet network costs that are too high to continue the adventure.
In a press release, the American service mentions a “prohibitive operating cost of Twitch in Korea” and assures that it is now impossible to continue its activities in this country. Owned by Amazon, Twitch nevertheless indicates that it has deployed "considerable efforts to reduce these expenses and maintain its activity". The firm has notably opted for a peer-to-peer model for the quality of the source stream and lowered the definition to a maximum of 720p. Significant efforts that have borne fruit, but the service claims that network costs in Korea remain "ten times higher" than in most other countries. A situation deemed untenable for the platform which operates "at a loss" in the East Asian country. It assures that there is currently "no solution" allowing it to operate sustainably in Korea.
A turning point in this hyperconnected country
Twitch's decision comes in a particular context for its parent company. After years of record growth, Amazon has made massive layoffs in recent months with around 27,000 departures. The group has recorded more than 400 departures within its live video subsidiary.
This new decision confirms this desire to reduce costs for Twitch, while South Korea authorizes Internet service providers to charge additional fees to companies that use a lot of data. Sums that do not really please American services, such as the streaming giant Netflix which has filed lawsuits in the country.
A major country for video games, South Korea is particularly known for being at the origin of the professionalization of e-sport. Players are considered real stars in South Korean society, as evidenced by the popularity of Faker. In the wake of Lee Sang-hyeok, the country concentrates many communities of players and streamers. More than half of the country's 50 million inhabitants are e-sports fans, recalls TechCrunch. This "gaming" culture also helps the small country to dominate in international competitions, in games like Starcraft or League of Legends.
What future for Korean streaming?
Aware of the thunderbolt caused by the shutdown of Twitch in the country, the service recalls that this is a unique situation. "Korea has always played and will continue to play an important role in the international e-sports community, and we are enormously grateful for the communities it has created on Twitch", specifies the platform. The latter is also thinking of Korean streamers who have "devoted considerable time and effort to building their communities." Twitch says it wants to work with content creators to help them migrate their communities to other streaming services. "We have also reached out to several of these services to help facilitate this transition. We will communicate with the affected streamers as soon as we have more information," the company adds.
The big winner of this departure could be the South Korean video streaming service Afreeca TV. This Twitch competitor has seen its titles progress since the announcement of its American rival.
I want to emphasize once again that this decision was extremely difficult to make and that we are deeply disappointed with this outcome. Korea has always played and will continue to play an important role in the international esports community, and we are immensely grateful for the communities they have created on Twitch.
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