Twitch is shutting down operations in Korea, effective February 27, 2024.
The video game streaming service posted the announcement on its website, in which Twitch CEO Daniel Clancy explained that operations in Korea have been “prohibitively expensive,” despite efforts to lower costs in the territory.
Clancy describes how the company attempted multiple tweaks to its operations in the country to lower costs, including capping stream source quality at 720p. Even so, network fees were “10 times” as expensive in Korea than in most other countries where Twitch is supported, the company claims. According to Clancy, Twitch’s operations out of Korea have been a “significant” financial loss, and it believes “there is no pathway forward” for the streaming service to continue operations there.
Twitch has put up a brief timeline of the next few months on its support site, which outlines the gradual removal of features from Twitch for Korean users. On February 27, streamers who set Korea as their country of residence will no longer be able to monetize streams, and viewers in Korea will no longer be able to make purchases through the service. Final payouts for Korean streamers are expected to go out on March 16, and all affiliates and partners will be off-boarded on June 4. So it seems Korean viewers will still be able to watch streams, but how they engage with the platform will change significantly.
In the meantime, Clancy says these difficulties are a “unique situation” for Twitch in Korea, and that other territories will not be affected by its suspending operations in the region. Clancy took to his personal Twitter to offer his condolences to Korean streamers who have used the platform.
“I wanted to quickly send my thoughts out to the Korean streamers that are impacted by the decision we have announced today,” Clancy said. “As I stated in the blog and in the live stream, this was a very difficult decision that we delayed for some time. I just wanted to send out my thoughts to them as I am aware that this will have a real impact on them.”
As The New York Times points out, these higher operation costs stem from South Korea charging higher network usage fees on foreign content providers, which has resulted in the gradual reduction of features for Korean Twitch users as the company looked for ways to cut costs. This legislation that requires ISPs to charge additional fees to overseas services is controversial, both because it is putting access to online services at risk, and because the lack of standardization of charges allows ISPs to potentially create arbitrary or “unwarranted” costs.
Twitch’s goal here, in issuing a threat to take their ball and go home, could be to generate the kind of public controversy that might pressure Korean service providers to lower fees, but whether that hypothetical goes anywhere remains to be seen. Despite the gradual reduction of features and stream quality more recently affecting the streamer’s popularity in South Korea, Twitch has been a cornerstone in the streaming and esports communities in the territory..
Twitch isn’t the only company that’s caused a public hubbub about network usage fees in South Korea. Netflix and internet service provider SK Broadband were part of a three-year-long legal dispute over the additional costs. The two companies have since dropped the lawsuit in favor of a partnership to bundle Netflix and SK Broadband services together.
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