Due to excessive operational expenses and network fees, Twitch, the streaming division of Amazon, said on Tuesday that it will cease operations in South Korea in February of the next year.

It said that the company worked hard to lower operational expenses in order to stay in business, noting that network prices in Korea are still ten times more expensive than in most other nations.

(Photo : MARTIN BUREAU/AFP via Getty Images)
Due to excessive operational expenses and network fees, Twitch, the streaming division of Amazon, said on Tuesday that it will cease operations in South Korea in February of the next year.

Network usage fees are being reviewed as "a comprehensive matter that requires consideration of the sustainable development of the internet network, the content industry, and user convenience," according to a statement from South Korea's Ministry of Science and ICT (Information and Communication Technology).

The ministry refrained from openly addressing Twitch's decision to shut down.

Global technology firms and local internet providers in South Korea have been at odds about who should pay for the increasing Internet consumption.

Netflix and SK Broadband, a South Korean internet service provider, abandoned their cases against one another earlier this year about network usage costs.

Twitch restricted video resolution in South Korea in 2022, citing rising operational expenses in a nation where online gaming and esports are flourishing.

Following the news on Wednesday, shares of rival South Korean streaming provider Afreeca TV (067160.KQ) finished over 30 percent higher.

Over 400 workers were let off by Twitch in March after the company's user and revenue growth fell short of projections.

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Naver Steps Up: New Gaming Streaming Platform Poised to Fill Twitch's Void in Korea

With an eye toward its staff, Naver, a well-known South Korean internet business, has started a Closed Beta Test (CBT) for its upcoming gaming streaming service. The business declared that an Open Beta Test (OBT) will begin on December 19 and that a complete formal service deployment is anticipated for the following year. The day before, Naver began the CBT for its employees on its game streaming service, which it has informally termed 'CHZZK,' according to sources in the ICT business on the sixth.

The goal of this internal testing is to guarantee that the game streaming service runs without a hitch. For this reason, Naver has arranged an internal gaming tournament that will be aired, incorporating well-known titles like League of Legends (LoL) and StarCraft. This gaming event gives Naver the chance to test and demonstrate its broadcasting capabilities. It runs until the 8th.

Workers at Naver's corporate office can see and take part in this gaming competition by using a secure internal connection to access the beta test homepage.

With the goal of improving the experiences of both gamers and viewers, Naver's game streaming service has Full HD 1080P quality, a UI designed with gamers in mind, interactive community elements, sponsorship choices, and Video on Demand (VOD) replay capabilities.

This event takes place concurrently with Twitch's declared departure from South Korea.

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