Why Valve banned NFT
Author: Hawk Live LLC
Last updated:
In October 2021, Valve Corporation updated the information on the Steam Product Registration page under “Platform Partner Rules and Guidelines.” The new clause states that third-party developers are prohibited from creating applications built on blockchain technology that issue or allow the exchange of cryptocurrencies or NFTs.
The new clause in the rules, in turn, caused a wave of outrage in the community. As a result, many crypto enthusiasts began to challenge the ban. It would seem that the Steam trading platform, which is closest to the NFT, put an end to the development of this direction. But the new rule contradicts the very same company, since at Steam, for a long time, the resale of cards and skins in various games, including projects of Valve itself. Just think of the skins in Dota 2 and CS:GO.
NFTs are often used as collectibles in games. Accordingly, in this case they are assigned some equipment, skins or other details in the virtual world.
Valve vs NFT
Without long deliberation, a nonprofit advocacy group in the area of digital rights - “Fight for the Future” published an open letter to Valve not to prevent it from hosting NFT and cryptocurrency-themed games. NFT's virtual goods platform Enjin, Blockchain Game Alliance (BGA) and 26 blockchain game studios have joined the initiative. BGA represents studios such as Ubisoft, Polygon, The Sandbox and Atari, among others.
Valve, web3 games are a fast-moving and exciting category of games that have a place within the Steam ecosystem. Please consider changing your stance on this issue and permit tokens and, more broadly, the use of blockchain tech on the Steam platform. Don’t ban blockchain-based games on Steam.
Despite this, Valve justifies banning NFT because the use of such technology will ultimately create a grey market for virtual goods that will have real value. And for Steam users, this is absolutely unnecessary. Also, users could be at a disadvantage because of the huge number of fraudulent schemes, which in most cases are based on blockchain assets.
Valve, as always, does not comment on this situation. Most likely, Valve simply does not want to take the risk. Suffice it to recall the scandal that occurred in October 2021 with Evolved Apes, in which the developer was selling NFTs. According to Evolved Ape, 10,000 unique NFTs were to be included in a game in which monkey avatars would fight each other. But after receiving 798 Ethereum ($2.7 million), Evil Ape stopped contacting anybody. Since this is not the first time this situation has happened, Valve decided to plug the hole with this ban.
And since the community is not waiting for a response from Valve, one of Steam's opponents decided to comment on the matter. Tim Sweeney, the founder of Epic Games, said that the Epic Games Store is open to cryptocurrency-enabled games or blockchain game developers, but without NFT.
Epic Games Store will welcome games that make use of blockchain tech provided they follow the relevant laws, disclose their terms, and are age-rated by an appropriate group. Though Epic's not using crypto in our games, we welcome innovation in the areas of technology and finance.
But Sweeney clarified that the developers of their projects will not be able to use the internal payment service from EGS, and in order to accept the cryptocurrency, they will have to use third-party payment systems that will comply with the laws of the countries where their users are from.
What to use if not Steam?
As significant as Steam's place in the market is, there are already projects like Axie Infinity that have proven that an NFT-based game can be launched outside of Steam and generate billions of dollars. One can easily assume that players will be able to find NFT-based games on other platforms if Steam continues its stance. It is Valve that is missing out on the benefits by blocking this type of content from its platform, not the other way around.
