Twitch plans to shut down its business in South Korea on February 27, it said, after finding that operating in one of the world’s largest esports markets is “prohibitively expensive.”
In a blog post, Twitch CEO Dan Clancy said the firm undertook a “significant effort” to reduce the network costs to operate in Korea, but ultimately the fees to operate in Korea was still 10 times more expensive than in most other countries. The ceasing of operations in Korea is a “unique situation,” he added.
“First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries.”
The Amazon-owned streaming service said it has been operating in Korea at a “significant loss,” and there was “no pathway forward” to run the business sustainably in the country. It’s unclear why network fees is so expensive in South Korea, though Clancy might be alluding to the recent controversial deliberation in the country to require tech companies to pay for network costs.
“I want to reiterate that this was a very difficult decision and one we are very disappointed we had to make. Korea has always and will continue to play a special role in the international esports community and we are incredibly grateful for the communities they built on Twitch,” wrote Clancy.