Twitch, the popular video streaming service, will shut down its services in South Korea next year, the company said on Tuesday, after struggling for years with the “prohibitively expensive” costs of operating in the country.
Twitch was one of the most popular platforms for gamers in South Korea, even as it competed with domestic services like AfreecaTV and giants like YouTube, analysts say. The service, owned by Amazon, draws about 35 million visitors a day worldwide, according to the company.
“Twitch was once in the driver’s seat among South Korean pro gamers for a while,” said Ha Jae-pil, a professor of e-sports at Kookje University in South Korea. Some League of Legends, Overwatch and Apex Legends tournaments in the country were streamed exclusively on Twitch, he said.
Then a downgrade of video quality to a resolution known as 720p, which the company said reduced its operating costs, made text less legible and caused users to jump over to YouTube, he said. “Twitch’s influence has been weakened since,” he said.
Now, it plans to shut its South Korean business on Feb. 27, 2024. It was not immediately clear whether viewers in South Korea would keep their access to the platform. But the company said that streamers in the country would no longer be able to monetize through Twitch, and that viewers would no longer be able to make purchases on the platform.
“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 company said. “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.”
South Korea has charged higher network usage fees to foreign content providers, prompting controversy and legal disputes. Netflix recently sued a South Korean internet service provider, arguing that it had no obligation to pay network usage fees. In 2021, a court in Seoul upheld the provider’s right to receive such fees.
“I don’t understand the higher fees on foreign content providers,” said Han Nam Hee, a professor of sports at Korea University, adding that the country should be giving more opportunities to content providers, not less. “This is an unnecessary disruption to streaming and e-sports in South Korea at a time when it needs to keep growing globally.”
Daniel Clancy, Twitch’s chief executive, said on social media that “this was a very difficult decision that we delayed for some time,” adding that he was “aware that this will have a real impact on them.”
Signs of struggle at Twitch have emerged gradually over the past year, as it has cut back its services in South Korea. After lowering the video resolution, Twitch in February began blocking South Korean streamers from posting video-on-demand footage, an archive of previously streamed content. In March, the company laid off more than 400 people.
Other than YouTube, Twitch has been the most widely used streaming service among South Korean gamers this year, according to Kiju Kim, an analyst at Hankook Research, a polling company based in Seoul. Twitch attracts about 300,000 South Korean viewers daily, about half of whom are men in their 20s.
Twitch said that it would help South Korean streamers on the platform migrate to alternative services by lifting the ban on broadcasting streams simultaneously on another platform, and by encouraging them to share links to their channels on other services.
“Twitch is the most established gaming and streaming community, and to be losing it is unfathomable,” said Alexandria Brooks, an American graduate student in South Korea who has attracted more than 1,100 followers on Twitch while playing Pokémon, Lies of P and Baldur’s Gate three times a week. “It hurts.”
Ms. Brooks, 28, said that she was considering moving to YouTube, but worried about retaining her American viewers, for whom Twitch remains the dominant streaming service. She was expected to lose several hundred dollars in monthly revenue.
“No one wants to be uprooted from what they’re used to,” she said.