Naver to launch a new gaming streaming platform as Twitch plans to shut down in Korea

Naver, a leading South Korean technology company, has initiated a Closed Beta Test (CBT) of its new game streaming service, targeting its employees. The company announced plans to launch an Open Beta Test (OBT) starting from December 19, with a full official service rollout expected next year. According to sources in the ICT industry, on the 6th, Naver commenced the CBT for its game streaming service, tentatively named 'CHZZK,' for its employees the day before.

This internal testing aims to ensure the smooth operation of the game streaming service. Naver has organized an internal gaming competition, featuring popular games like StarCraft and League of Legends (LoL), to be broadcasted for this purpose. This gaming event, which will run until the 8th, is an opportunity for Naver to test and showcase its streaming capabilities.

Employees at Naver's headquarters can access the beta test webpage via a secure internal link to view and participate in this gaming competition.

Naver's game streaming service boasts Full HD 1080P resolution, a gamer-friendly interface, interactive community features, sponsorship options, and Video on Demand (VOD) replay capabilities, aiming to enhance both gamer and viewer experiences.

This development coincides with Twitch's announced withdrawal from South Korea. Twitch CEO Dan Clancy, citing prohibitive operational costs and unsustainable business conditions, has stated that Twitch will cease operations in Korea by February 27, 2024. Despite efforts to cut costs, including reducing streaming quality, Twitch's network fees in Korea remain significantly higher compared to other countries, leading to this decision. Twitch plans to assist Korean streamers in transitioning to other live-streaming services in the region.

The Twitch CEO wrote,

"This morning, I shared with our community in Korea that we’ve made the difficult decision to shut down the Twitch business in Korea on February 27, 2024, KST. We understand that this is extremely disappointing news, and we want to explain why we made this decision and how we are planning to support those impacted.

Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. 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.

To all of our global communities, we want to make it clear that this is a unique situation. Operating costs in Korea are significantly higher than they are in other countries and we have been open about this challenge for some time.

Twitch streamers in Korea have devoted significant time and effort into building their communities, and we plan to help these communities find new homes — even if it’s regrettably not on Twitch. We will work to help Twitch streamers in Korea move their communities to alternative livestreaming services in Korea. We are also reaching out to several of these services to help with the transition and will communicate with impacted streamers as those discussions progress.

I want to reiterate that this was a very difficult decision and one we are very disappointed we had to make. Korea has always and will continue to play a special role in the international esports community and we are incredibly grateful for the communities they built on Twitch."

This situation is notably influenced by South Korea's "Netflix law," which regulates online contentproviders with substantial traffic volumes to incur additional "network usage fees" on top of the bills paid by residential end users. The law impacts both local and foreign platforms. It also imposes a shared responsibility on ISPs and content providers to ensure service stability, a factor contributing to the challenging operating environment for companies like Twitch in South Korea.