Twitch Set to Cease Operations in South Korea, February 2024

• Twitch to Cease Operations in South Korea by 2024
• Exorbitant Network Fees
• Is Twitch Sinking?
• Economic Challenges and Leadership Changes
• The Resilience of the Streaming Industry

Twitch to Cease Operations in South Korea by 2024

In an unexpected announcement, Amazon's live streaming platform, Twitch, is to halt its operations in South Korea. The cessation takes effect from February 27, 2024. The company cites ballooning operating costs and network fees as the significant factors influencing this decision. With the platform operating at a loss in the region, the possibility for a sustainable path forward appears nonexistent. Dan Clancy, CEO of Twitch, lamented the unprofitability of their operations in Korea.

Exorbitant Network Fees

Dan Clancy pointed out the disproportionate network fees in South Korea, which are reportedly ten times higher than in most other countries. He indicated that despite the company's concerted efforts to slash operating costs, the situation remained unsustainable.

Is Twitch Sinking?

The streaming service has been grappling with financial difficulties for some time. In March, it resulted in the dismissal of 400 employees, part of the company's strategy to bolster its business prospects. The layoffs were also an aftereffect of Twitch's failure to meet revenue projections. Furthermore, these layoffs contributed to Amazon's broader plan to downsize its workforce by 9,000 people.

Economic Challenges and Leadership Changes

Clancy, who stepped into the role of CEO shortly after the layoffs, acknowledged the impact of the challenging macroeconomic environment on the business. Twitch's revenue and user growth fell short of their targets. Following the layoffs, Twitch underwent another round of staff reductions in October 2023, although less severe than the March layoffs. Amazon CEO, Andy Jassy, rationalized these moves, attributing them to economic uncertainty and the need for cost optimization.

The Resilience of the Streaming Industry

Despite the thriving nature of the streaming industry, it seems that Twitch has not been entirely unaffected by economic downturns and operational shutdowns.

Edited by Jonathan Stoker