#63: Token gestures

Valve is the first of gaming’s big gatekeepers to ban NFTs. It won't be the last

So, Valve has banned games that use NFTs or blockchain technology from Steam. Tempting as it is to wave this away with the ol’ ‘nothing of value was lost’ meme, this is a highly significant development. This was always coming: the only question was from where it would come first. Now that one major digital shopkeeper has broken cover and kicked NFTs as a concept off its platform, it feels inevitable that others will follow.

I’m very surprised that Valve has shot first. Of all the platform holders and store owners, it seems on paper like the most welcoming to NFTs and blockchain games as a concept. After all, Steam was a pioneer in what blockchain enthusiasts call the ‘play to earn’ model. Steam Workshop, arguably the closest point of comparison for the sorts of marketplace today’s NFT game developers are promising, was born after Gabe Newell spent a couple of weeks working as a gold farmer in World Of Warcraft, and realised that the gig brought in what, in much of the world, would be considered a comfortable living. A similar line is being deployed today in discussions around Axie Infinity, the current flavour of the month among the blockchain set.

Besides, Valve’s approach to Steam over the years has been broadly libertarian in nature, powered by a belief in community contributions and decision-making, free markets and light-touch regulation, if there is any regulation at all. Steam and the blockchain/crypto gang seem like reasonable bedfellows. But that just makes it even more significant that Valve should make the first move in banning blockchain games from its store. If even this most libertarian of set-ups sees too many perils and pitfalls in NFT-powered gaming for it to even be worth exploring, the writing appears to be on the wall for mainstream adoption of the technology.

Even putting the ethics and optics of the whole thing to one side, there are too many potential points of liability here for a company like Valve, I think. For all the good-faith explorations of blockchain technology and NFTs in games, there are another half-dozen scams. If the developer of an NFT game takes the money and runs — as we saw recently with Evolved Apes, whose creator scarpered with $2.7 million in NFT sales — where does that leave Valve? What happens when the regulators move in, as seems inevitable? Does the SEC go only after the developers of the game, or all those who played a part in the selling of it? What if Valve gets unwittingly entangled in a money-laundering scheme, or someone gets ripped off in the marketplace Valve doesn’t control in a game whose sale it did? What happens when the taxman comes calling? It is precisely Valve’s hands-off, libertarian approach to its business that opens it up to all this risk. Not paying attention rarely makes for a good legal defence.

Evangelists will say this was inevitable: that of course the gaming gatekeepers, with their multibillion-dollar centralized platforms, would be threatened by decentralization, and do everything in their power to stave off the coming revolution. But this is a heavy blow regardless. No doubt conversations have already been had about blockchain in the boardrooms and executive washrooms of Apple, Microsoft, Sony et al. Now one of the main players has broken cover, it makes it much easier for others to do the same.

Crypto diehards may point to Epic Games, which responded to the Valve news by saying it was “open” to blockchain games. But this is driven in large part by the way it has positioned the Epic Games Store as a utopian anti-Steam — when Valve zigs, Epic is duty-bound to zag — and besides, Epic’s stated position leaves it with plenty of wiggle room. CEO Tim Sweeney says blockchain will be allowed “providing [games] follow the relevant laws, disclose their terms, and are age-rated by an appropriate group.” There are an awful lot of hurdles in that sentence, and the legal one in particular is not so much a hurdle as a mountain. It is entirely possible there will never be an NFT game on Epic’s store.

I doubt the true believers will see all this as too much of a problem. Many will have seen it coming, or will now claim to have done. The future of this space was always likely to be in browser windows and standalone PC clients, and Valve’s banning of it all from Steam doesn’t change a thing; if anything it just makes it more inevitable. That’s fair enough. Maybe the revolution is still coming. But the battlefield just got a good deal smaller, and I expect the coming months will see it constricted further still.


  • I am quite fascinated by the ongoing fuss between EA and FIFA over naming rights, which began with EA saying it was considering dropping the official name from its gazillion-selling football game. I thought it was just a negotiating tactic but it does now seem quite serious, and the latest development has FIFA saying it no longer wants an exclusive licensing deal. I’m intrigued to see where this leads. EA doesn’t really need the name anymore — it has separate agreements with players, clubs and so on, which are the things that really matter here — but there’s a risk in letting the FIFA name appear on other people’s game boxes, too. Maybe avoiding any potential customer confusion is worth the $250m a year that FIFA reportedly is asking for.
  • Twitch has apologisedapologised! — for the security ouchie that saw essentially the entire platform leaked online. It insists that no customer data was compromised in the hack, however.
  • FromSoftware open-worlder Elden Ring has been delayed by a month, and will now launch on February 25. Some masterful spin in the tweet announcing it: “the depth and strategic freedom of the game exceeded initial expectations”. We have had to delay our game as it has simply become too big, and too good. Hats off.

A reasonably quiet day, which is good because I have a lot on this week! As ever, if you’ve enjoyed this, do please give it a share — I’ve made a small tweak to the formatting and done a proper strapline which I think might make this a bit more shareable on the ol’ socials, and would appreciate some help in seeing if it makes a difference. Have a grand couple of days, and I’ll see you Wednesday.