Twitch Bids Farewell to South Korea Amid Rising Costs
Introduction:
Twitch, the renowned e-sports streaming platform, recently dropped a bombshell on its South Korean community. In an announcement on December 5, 2023, the Amazon-owned giant revealed its decision to cease operations in South Korea by February 27, 2024. The reason? Soaring operational expenses and exorbitant network fees, marking an unfortunate end to a chapter that once thrived in the dynamic world of Korean esports.
The Battle of Costs:
The impending shutdown stems from Twitch's struggles to navigate the financial challenges in South Korea. CEO Dan Clancy, acknowledging the significant losses, declared, "there is no pathway forward for our business to run more sustainably in that country." Notably, network fees in Korea, standing at ten times the global average, have burdened the platform, compelling a strategic retreat.
Navigating the Network Fee Maze:
In an attempt to fathom the complexities of the situation, it's crucial to understand South Korea's unique internet landscape. The introduction of the Sending Party Network Pays (SPNP) law in 2016, often deemed an "internet traffic tax," triggered a prolonged battle between global tech giants and local internet providers. Twitch, too, found itself entangled in this web, limiting video resolution in 2022 to curb escalating operating costs.
Twitch's Cost-Cutting Measures:
The platform's journey to salvage its presence in Korea involved a series of cost-cutting measures. From throttling source quality to 720p for over a year, to experimenting with a peer-to-peer model for 1080p streaming since July 2022—Twitch spared no effort. However, these attempts proved futile, leading to the unavoidable decision to bid adieu to the Korean esports scene.
Closing Notes:
As Twitch prepares to close its doors in South Korea, the impact resonates beyond geographical boundaries. Streamers worldwide may experience changes in revenue, particularly those with significant support from the Korean audience. The final payout for Korean streamers is scheduled for March 16, 2024, marking the end of an era that once buzzed with excitement and virtual cheers.
In the grand scheme of South Korea's internet evolution, Twitch's departure adds another layer to the ongoing dialogue on who bears the brunt of increased traffic usage costs. As the final date approaches, the once-vibrant Twitch community in South Korea faces an inevitable shift. Affiliates and Partners, once woven into the fabric of the platform, will bid their farewell on June 4, 2024, leaving a void in the world of Korean esports that won't soon be forgotten.