Twitch plans to shut down in S.Korea over high network costs

Seoul, Dec 6

Twitch, a popular US-based live game streaming platform, said on Wednesday it plans to shut down its South Korean service in February next year due to high network usage fees in the country.

In an announcement posted on its corporate blog, Twitch Interactive Inc. CEO Dan Clancy said the company "made the difficult decision to shut down the Twitch business in Korea on February 27, 2024."

Clancy said the cost to operate Twitch in South Korea was "prohibitively expensive" and said the company spent significant effort, such as adjusting the video quality on the service, to reduce business costs, reports Yonhap news agency.

"While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries," Clancy said.

He stressed that Twitch has been operating at a significant loss and that the company sees "no pathway forward for our business to run more sustainably" in South Korea.

In November last year, the platform suspended its video-on-demand service in South Korea, seen as a protest against the country's controversial network usage fee.

The announcement marks that latest development in an ongoing controversy over network usage fees among global platforms, including Netflix, in South Korea.

Local internet service providers have accused foreign services of causing traffic disruptions on their networks and demanded they pay added network usage costs.

South Korean online portal giant Naver Corp., meanwhile, started a closed beta test for its own upcoming game streaming platform for employees this week.

Naver plans to launch a public beta service of the platform, tentatively named Chzzk, on December 19 and officially release it next year.

The service will feature 1080p full high-definition streaming, along with a user interface suitable for game broadcasting and features such as community and sponsorship functionalities.