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Twitch, the favored video streaming service, will shut down its companies in South Korea subsequent yr, the corporate mentioned on Tuesday, after struggling for years with the excessive prices of working within the nation.
Twitch was as soon as one of the well-liked platforms for avid gamers in South Korea, even because it competed with home companies like AfreecaTV and giants like YouTube, analysts say. The service, owned by Amazon, attracts about 35 million guests a day worldwide, in accordance with the corporate.
“Twitch was as soon as within the driver’s seat amongst South Korean professional avid gamers for some time,” mentioned Ha Jae-pil, a professor of e-sports at Kookje College in South Korea. Some League of Legends, Overwatch and Apex Legends tournaments within the nation had been streamed solely on Twitch, he mentioned.
Then a downgrade of video high quality to a decision often called 720p, which the corporate mentioned lowered its working prices, made textual content much less legible and brought on customers to leap over to YouTube, he mentioned. “Twitch’s affect has been weakened since,” he mentioned.
Now, it plans to close its South Korean enterprise on Feb. 27, 2024.
“Whereas we now have lowered prices from these efforts, our community charges in Korea are nonetheless 10 occasions costlier than in most different nations,” the corporate added. “Twitch has been working in Korea at a big loss, and sadly there isn’t a pathway ahead for our enterprise to run extra sustainably in that nation.”
South Korea’s excessive community utilization charges have prompted authorized disputes. Netflix lately sued a South Korean web service supplier, arguing that it had no obligation to pay community utilization charges. In 2021, a court docket in Seoul upheld the supplier’s proper to obtain such charges.
Daniel Clancy, Twitch’s chief government, mentioned on social media that “this was a really tough choice that we delayed for a while,” including that he was “conscious that this can have an actual affect on them.”
Twitch mentioned that it could assist South Korean streamers on the platform migrate to different companies by lifting the ban on broadcasting streams concurrently on one other platform, and by encouraging them to share hyperlinks to their channels on different companies.
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