I blame Twitch's laziness. There is a competitor of Twitch in South Korea, namely AfreecaTV, and it is highly profitable. Why is AfreecaTV sustainable whereas Twitch is not? Because Twitch hasn't altered its business model while operating in the Korean market. The same network cost applies to both AfreecaTV and Twitch, so there can't be a fundamental restriction keeping Twitch from being profitable in South Korea.
One thing that makes AfreecaTV profitable is that it charges a fee for every donation happening in the platform. Twitch does not. AfreecaTV also uses a P2P network to reduce network cost. These policies may make the users and the streamers a bit annoyed, but it is still infinitely better than abandoning the service.
Twitch being unprofitable is a smokescreen. After acquiring Twitch, Amazon gutted it of its infrastructure IP and transferred it to a subsidiary of AWS. Amazon can now decide how much they want to charge Twitch as an entity for the AWS services they now need, that’s where the unprofitability comes from.
One thing that makes AfreecaTV profitable is that it charges a fee for every donation happening in the platform. Twitch does not. AfreecaTV also uses a P2P network to reduce network cost. These policies may make the users and the streamers a bit annoyed, but it is still infinitely better than abandoning the service.