Liquidation of Taiwan and Japan Corporations
Focus on Investment in Thailand Corporation
Overseas Sales Account for Only 1%
Profitability Challenges Due to Strategic Restructuring
SOOP, which completed rebranding on AfreecaTV, has liquidated its Japanese subsidiary that served as its global forward base. This move comes as the company restructures its overseas business strategy to focus on Thailand, closing subsidiaries that had been operating at a loss for several years.
According to the IT industry on the 27th, SOOP completed the liquidation of its Japanese subsidiary last September. The Japanese subsidiary was SOOP's first overseas entity, established in 2013. After its establishment, the company laid the foundation for its overseas business by officially launching the streaming service AfreecaTV in 2015. Subsequently, it expanded its overseas network by establishing subsidiaries in Thailand, the United States, Hong Kong, and Taiwan.
The decision to liquidate the Japanese subsidiary after more than a decade was due to a strategic shift to focus overseas operations around Thailand. The company plans to close loss-making overseas subsidiaries and invest the personnel and resources into Thailand.
The Japanese subsidiary had been running at a loss since it began full-scale operations in 2015. Starting with an annual net loss of 1.1 billion KRW in 2015, it gradually reduced the deficit and even posted a slight profit of less than 100 million KRW from 2022, but returned to losses last year. It is analyzed that the subsidiary failed to secure a presence due to competition from local Japanese platforms such as NicoNico Live and SHOWROOM.
The liquidation of the Taiwanese subsidiary at the end of last year follows the same context. Starting with an annual net loss of 900 million KRW in 2015 when the subsidiary was established, it continued to incur losses in the mid-300 million KRW range over the past five years. The personnel from the liquidated Taiwanese and Japanese subsidiaries were reassigned to the headquarters or other overseas subsidiaries.
SOOP plans to concentrate its overseas business capabilities around its rebranded Thai subsidiary. SOOP established the Thai subsidiary in March this year. Choi Young-woo, head of the global business division who previously led the eSports business at Riot Games Korea, was appointed as the head of the subsidiary, and the workforce was increased compared to the existing Thai subsidiary (AfreecaTV Thailand subsidiary). The existing Thai subsidiary was absorbed into the newly established entity after liquidation, and the organization is expected to grow larger.
The company has also invested in content. Last year, it formed a partnership with Thailand's largest telecom company, True, providing the streaming support item "Quick View." This year, following exclusive broadcasting of the popular eSports event "Valorant Challengers Thailand 2024" in collaboration with Riot Games, SOOP acquired the eSports production company "FPS Thailand," which includes well-known local influencers. On the 22nd, it officially launched a global live streaming platform and enhanced accessibility by building a dedicated Valorant eSports page.
Choosing Thailand as a new base was based on the assessment of high growth potential. Due to its hot climate, indoor sports are more popular than outdoor sports in Thailand. Since COVID-19, the gaming market has rapidly expanded centered on eSports. It is the largest market in Southeast Asia and is considered to have a well-established network environment to support streaming services. Unlike the United States and Japan, where dominant players exist, Thailand is seen as a strategic foothold to proactively target and expand into the Southeast Asian market.
SOOP's top priority after refining its overseas strategy is monetization. Although it has been overseas for more than 10 years, overseas revenue accounts for only 1% of the cumulative 311.4 billion KRW sales in the third quarter. Establishing a streaming ecosystem locally and creating revenue models are critical challenges. A SOOP representative said, "We will introduce country-specific strategies centered on Thailand to discover regional streamers and strengthen user acquisition. Based on Thailand's performance, we plan to expand our influence to Taiwan and North America."
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