Twitch will Stop Operating in South Korea Due to High Costs

Highlights

• Twitch to halt operations in South Korea by February next year
• Decision attributed to high operating costs and network fees
• CEO Dan Clancy cites significant financial losses in the Korean market
• Network fees in Korea reportedly 10 times higher than in other countries
• Despite efforts to reduce costs, Twitch faces financial challenges in the region
• Over 400 layoffs announced in March due to slower-than-expected growth
• Exit highlights the tough economic landscape for streaming services
• Demonstrates the need for platforms to adapt strategies to market conditions

Amazon‘s streaming platform Twitch recently made public their plan to cease operations in South Korea by February next year due to increasing operating costs and network fees that make their business unviable there.

Dan Clancy addressed the situation in a blog post by acknowledging Twitch’s significant financial losses in Korea despite efforts to reduce operating costs; network fees there remain significantly higher than most countries and make continued operations unfeasible.

Twitch announced in March its intention to reduce staff by over 400, due to slower-than-anticipated user and revenue growth. Since then, they had actively worked towards streamlining operations and increasing cost effectiveness, but South Korean regulations proved an obstacle that they cannot overcome.

Twitch’s decision to exit South Korean market demonstrates the difficulty streaming services have in managing costs and adapting to changing market conditions. Their exit signifies the complex nature of streaming industry as platforms must continually evaluate their strategies in light of economic realities.