Twitch CEO Dan Clancy has announced that Twitch will be shutting down its Korean division over unsustainable operating costs.
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The CEO of the world’s largest livestreaming company took to a blog post to publish an update on Twitch in Korea, where he explained that the cost for Twitch to operate in Korea is “prohibitively expensive“, and despite efforts to reduce operating costs, the company has made little headway on reaching its goal. Clancy gave examples, such as trialing peer-to-peer streaming and restricting video quality to 720p, as attempts at reducing operational costs, and while they did reduce running costs, it simply wasn’t enough.
“Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country,” writes Clancy.
Clancy goes on to explain that Twitch’s decision to shut down its service in South Korea isn’t a reflection of the entire company, as Clancy says that Korea is a “unique situation” as operating costs are “significantly higher than they are in other countries and we have been open about this challenge for some time.“
The Twitch CEO writes that the company will be assisting streamers affected by the shutdown by contacting competing streaming services of their transition. The closure of Twitch in South Korea will undoubtedly have a big impact on the eSports market as South Korea has some of the most talented and popular teams for competitive games, such as League of Legends and DOTA 2.