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US-based gaming streaming platform Twitch said on Wednesday it will discontinue its service in South Korea in February due to “serious” high network costs.
In a statement signed by CEO Dan Clancy, the Amazon-owned company said it had reached a point where continuing to operate in the country had become “impossible.”
She blamed Seoul’s network usage fees for the decision, saying the costs were “ten times higher than in most other countries.”
“Twitch’s operations in South Korea are scheduled to end on February 27, 2024,” the statement read.
“The cost of running Twitch in South Korea is currently dangerously high.”
The company said in March that it would cut more than 400 jobs “to ensure our business is protected so Twitch will be around for the long term.”
The platform said it “made a lot of effort to find ways to continue operating in South Korea by reducing costs,” such as adjusting the maximum video quality, but it is no longer sustainable.
Thanks to its real-time interactive nature, Twitch has gained significant traction and created a strong presence among gamers in South Korea.
The country is known for its passionate, competitive and dedicated gaming community, as well as its mega-star Faker – a gamer dubbed the Michael Jordan of eSports.
“We would like to reiterate that this was an extremely difficult decision, and one that all of us at Twitch are deeply saddened by,” the company’s statement on Wednesday said.
“South Korea has always been an excellent player in the global esports community and will continue to do so.”
Unlike many other countries, South Korea allows ISPs to charge data-intensive businesses additional fees.
South Korea has been embroiled in legal disputes with US streaming giant Netflix over the resulting network usage fees.
In September, Netflix and SK Broadband — one of South Korea’s largest ISPs — announced they would drop a multi-year series of lawsuits over network usage fees.
The disagreements revolved around whether Netflix should pay for increased network traffic and maintenance efforts, but the two said they would instead “collaborate as partners for the future.”
Shares of South Korean video streaming service Afreeca TV, a competitor to Twitch, rose nearly 30% in afternoon trading in Seoul.
Some Twitch users in the country were shocked by the news.
“I feel like I’m losing my job now,” said one streamer, yummy_2.
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