Amazon’s Twitch to exit Korea due to soaring network fees

[Photo by MK DB]

Twitch Interactive, Inc., the game streaming platform owned by Amazon.com Inc., has announced its withdrawal from the South Korean market thanks to high network usage fees.

According to a notice posted on the blog run by Twitch Korea on Wednesday, the company said that it has “decided to cease operations in Korea from February 27, 2024.”

“The costs of operating Twitch in Korea have reached a critically high level,” the notice said, adding that the company was at a point where it could not continue operations in the country “due to Korea’s network fees, which are 10 times higher than in other countries.”

Korean Twitch users will be unable to purchase paid products after February 27, 2024, and streamers will also no longer be able to generate revenue.

With Twitch’s announcement of its withdrawal, observers speculate that other platforms, such as those run by AfreecaTV Co., YouTube LLC, and Naver Corp., could benefit. According to information obtained by Maeil Business Newspaper, Naver is scheduled to launch a new service specializing in game live streaming on December 19th, 2023. The new service will include a user-friendly environment optimized for game broadcasts, various communities, and sponsorship features.

Meanwhile, Twitch’s withdrawal from the Korean market is likely to reignite the controversy over foreign companies’ network usage fees. A confrontation is already brewing among the major three domestic telecommunications companies and overseas content providers over network usage fees, with some industry insiders say that Twitch’s withdrawal was somewhat predictable.