November 26, 2022

Why Steam Banned Crypto Transactions and NFT Games from Its Platform

2 min read

Earlier today, video game developer Valve banned all NFTs and cryptocurrency associated games from its Steam platform. Steam is among the world’s biggest video game platforms, including a catalogue of thousands of video games alongside 25 million daily concurrent gamers.

Steam Removes All Crypto Related Products from Its Store

Earlier today, the newly upgraded Steam circulation onboarding standards mentioned that the platform would no longer support and publish “applications built on blockchain innovation that problem or enable exchange of cryptocurrencies or NFTs.”

Understanding Valve’s Position and Steam’s Digital Economies

Without a doubt, Valve is a pioneer for constructing a few of the most robust gaming economies to date. Counter Strike: Global Offensive, arguably the video game maker’s most successful franchise, has a successful digital economy where players can buy, sell and trade virtual items for real money.

With over 700 million items in blood circulation and a market capitalization of over $14 billion on secondary marketplaces, players have actually continued to fascinate over these virtual skins. According to TalkEsport, the most costly product ever offered to date was for $150,000. In essence, these virtual items are just like non-fungible tokens. After buying an item, that stated item is provably yours– albeit in a centralized way unlike NFTs.

Millions of virtual cosmetic products are

exchange on the Steam Marketplace every year. Source: SCM So what gives? NFTs and blockchain technology are unique services to Valve’s already existing digital economies– so why would the game developer actively seek to prohibit it? The response is rather easy. Steam market, a centralized platform owned and run by Valve, permits its users to purchase and offer their digital cosmetics and products for money.

However, the catch is that the money can’t be transferred out and is more akin to save credit, where users can buy other marketplace items or games from the main store. This implies that, technically speaking, there is no “real” monetary worth behind these products.

NFTs and crypto-related games present a legal threat for Valve, as its flourishing digital economies and marketplace could fall under the label of securities. At the height of CSGO’s gaming boom in 2016, regulators around the world greatly scrutinized Valve, threatening to curb the growth of its digital economies. With these dangers included, it’s rather clear regarding why Steam is no longer supporting NFT and blockchain-focussed computer game on its platform.

It stays to be seen whether Valve will release a main statement. Nevertheless, it’s unlikely for the game developer to alter its stance up until there is more regulatory clearness surrounding non-fungible tokens and play-to-earn games.

Featured image from UnSplash