Twitch is one of the most popular game streaming services. Many gamers have earned fame and money in their careers by streaming on that site.
But gamers in South Korea won’t be able to do the same from 2024 as Twitch is shutting down its operations there.
The question is- what made the company take such a drastic decision that will impact thousands?
In a blog post on December 5, 2023, Dan Clancy, the Twitch CEO, revealed that Twitch will shut down in South Korea on February 27, 2024, KST. It was due to high operating costs and network fees, the latter of which were ten times higher than in other countries.
What Made Twitch Shut Down Its Operations In South Korea?
In a blog post, Dan Clancy, the Twitch CEO, confirmed that they will shut down their services in South Korea on February 27, 2024, KST.
He also made it clear to the “global communities” that the situation in South Korea is unique. As in, it’s unlikely that such drastic action will be taken elsewhere.
Twitch gets about 300,000 viewers from South Korea daily. Almost half of these numbers are men in their 20s. It is unclear whether a skeletal structure of the site can accessed only for viewing.
But it has been made abundantly clear that streamers in South Korea won’t be able to monetize their videos. Also, viewers won’t be able to purchase anything on the site.
But why is the site shutting down?
Clancy lists multiple reasons in his post. The number one is high operating costs. He penned, “Ultimately, the cost to operate Twitch in Korea is prohibitively expensive.”
The boss explained that they had tried to find ways to make the service work. He wrote that they:
“Experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p.”
Also, they laid off 400 employees in March. These measures were successful to an extent. But essentially, downgrading the services also made them lose users since many shifted base to YouTube.
In the blog post, Clancy further explained that the final nail in the coffin was the network fees in South Korea, which were “10 times more expensive than in most other countries.”
South Korea’s decision to impose higher network usage fees on foreign content providers has ignited controversy and legal disputes.
Netflix recently took legal action against a South Korean internet service provider, contending that it was not obligated to pay these fees. However, in 2021, a court in Seoul ruled in favor of the provider’s right to collect such charges.
Critics like Han Nam Hee, a professor at Korea University, expressed confusion over the increased fees for foreign content providers (via NY Times).
He argued that South Korea should be fostering more opportunities for content providers rather than creating unnecessary disruptions in the growing global streaming and e-sports industry.
Ultimately, Dan Clancy wrote:
“Twitch has been operating in Korea at a significant loss, and unfortunately, there is no pathway forward for our business to run more sustainably in that country.”
But what about the users who earned a livelihood or at least some money from streaming there?
“Losing Twitch, the most established gaming and streaming community, is something I can’t even wrap my head around,” expressed Alexandria Brooks, a 28-year-old American graduate student, and Twitch streamer in South Korea, to the NY Times.
While considering a move to YouTube, she’s concerned about retaining her American viewers, as Twitch remains their preferred streaming platform. This transition could cost her several hundred dollars in monthly revenue.
Twitch’s chief executive realizes that the decision’s impact will be severe. So, they will re-home their existing streamers. Clancy wrote:
“Twitch streamers in Korea have devoted significant time and effort into building their communities, and we plan to help these communities find new homes — even if it’s regrettably not on Twitch.”
It remains to be seen if this large-scale effort is successful.
What do you think of the decision to shut Twitch down in South Korea? Can this happen elsewhere in the world?
Let us know your thoughts in the comments.