Why Twitch is leaving Korea, the esports capital of the world

The livestreaming service Twitch has announced its upcoming closure in the Korean market. The reason: operating costs that are far too high.

Hard blow for the streamers Koreans: Twitch management has made the decision to cease the service’s activities in the country on February 27, 2024. The news will impact thousands of content creators as well as their community in a country where e-sport is an institution , much more than anywhere in the world.

Prohibitive costs

The press release published during the night mentions “ a prohibitive cost of operating Twitch in Korea ” while the ” network fees in Korea remain ten times higher than in most other countries “.

The service tried as best it could to reduce its costs by lowering the broadcast definition to 720p or adopting p2p (peer to peer) operation to manage the quality of the streams, but nothing worked. The service is clearly losing too much money and believes it is no longer possible to continue operating in Korea viably.

Source : via @broderick on X (Twitter)

This decision is part of a larger cost reduction strategy for the service, driven by Amazon: last March, Twitch had to lay off 400 of its employees following financial results below expectations.

The firm has since increased the number of advertisements on the streaming platform while offering creators increasingly juicy contracts compared to its competitors like YouTube or Meta, thus increasing costs, according to an article in Bloombergpublished on November 9.

What will become of Korean streamers?

You should know that in Korea, it is estimated that 62% of the population plays video games (according to Statista) in a country where the e-sport sector is a real industry which has exceeded 1.3 billion dollars in 2022.

The scene starcraft has exploded in Korea since the end of the 90s and the game is still widely played in the country which now hosts prestigious competitions such as the World Championship of League of Legends .

Source: Riot Games

But beyond the broadcasts of competitions, which should be found on YouTube, these are the streamers who will be most affected. Twitch announced a closure in several stages: February 27, 2024 will mark the end of monetization on the platform while thestreamerswill receive their final payment on March 16. It is on June 4, 2024 that Twitch will permanently close on the Korean market.

The service also wants to preventstreamersinternationals with a large part of their community in Korea that their income will inevitably drop from February 27.

Generally, the closure of a service within a country is done for political or regulatory reasons; it is quite rare that it is decided for cost reasons. We regret such a decision, taken in an increasingly complex economic and competitive context for platforms.

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