Valve Software CEO Gabe Newell is intrigued by the technology surrounding cryptocurrency and NFTs, but the state of the industry surrounding them will keep them off Steam.
A variety of game developers and publishers are trying to figure out a way to elegantly incorporate blockchain technology into their games. That has been met with intense pushback from fans, as well as many within the industry.
Likely the biggest name to come out against blockchain technology in gaming is Newell, the CEO of Valve Software. The partner agreement for Valve’s digital storefront Steam explicitly forbids “applications built on blockchain technology that issue or allow exchange of cryptocurrencies or NFTs.”
Given the fact that Steam is the largest platform of its kind in the gaming industry and serves as a pipeline for billions of dollars each year, that’s a devastating blow for any creators looking to cash in on crypto through video games.
But what convinced Newell to issue that sweeping ban on NFTs? And what is Valve’s stance on crypto as a whole at this point?
Why doesn’t Steam allow NFTs?
Newell states that Steam doesn’t allow NFTs because there are too many bad actors in the space at this time. Speaking with Rock, Paper, Shotgun, Newell didn’t mince words regarding his thoughts on those working within the NFT space.
“The people in the space tend to be involved in a lot of criminal activity and a lot of sketchy behaviors…with the actors that are currently in this NFT space, they’re just not people you really are wanting to be doing business with. That doesn’t say anything about the underlying technology, it’s just a reflection of the people right now who are viewing it as an opportunity to rip customers off, or engage in money laundering, or other things like that,” Newell said.
Newell stressed the fact that there’s nothing wrong with the idea behind NFT technology. He specifically honed in on the value of distributed ledgers and digital ownership as something that is worth pursuing. The trouble is that there is so much fraud within the NFT industry at the moment, something that is difficult to avoid even just within the confines of gaming.
Separating the technology from those manipulating it is an important distinction for Newell. It’s worth remembering that skins in Dota 2 and Counter-Strike: Global Offensive are similar to NFTs in many ways.
Why doesn’t Steam accept cryptocurrency anymore?
According to Newell, user dissatisfaction and unusually high levels of fraud led to Steam no longer accepting cryptocurrency for payments.
Steam previously accepted Bitcoin in exchange for games, which proved to be troublesome for Valve. The biggest problem is that many of the purchases using crypto were of questionable legality according to Newell.
“The vast majority of those transactions, for whatever reason, were fraudulent, where people were repudiating transactions or using illegal sources of funds and things like that,” Newell said.
The other problem was the sheer volatility of Bitcoin. Just over the last year, Bitcoin’s value has been above $67,000 and below $30,000. This means that if someone spent Bitcoin to pay for a game and the price of Bitcoin spiked a week later, they effectively overpaid for the game. This made for headaches for both players and Valve, and was part of the reason the company bowed out of accepting cryptocurrency.