On October 14, Valve made the decision to prohibit the sale of blockchain games and non-fungible tokens (NFTs) on the Steam platform.
We believe that that Web3 technologies are the future of interactive entertainment and gaming, powering an exciting, fast-growing category of games that have a place within the Steam ecosystem.
In support of this idea, we've joined Fight for the Future and the Blockchain Game Alliance, along with 26 blockchain game companies, to publish an open letter calling on Valve to reverse their ban on blockchain and NFT related content on Steam.
Together with FFTF and BGA, we hosted an AMA on Reddit to flesh out the discussion.
Get the full rundown of the Q&A session with Enjin CTO Witek Radomski, Age of Rust developer Chris LoVerme, and Fight for the Future Activist Joe Thornton.
As a gamer myself I find very hard to play some NFT games because its high entry cost, What could be the solution in the near future or ten years from now?
Witek: Mainstream games can start using NFTs in more interesting ways than just lootboxes and funding mechanisms. Games can mint NFTs that represent your in-game characters, pets, weapons/inventory, game currency, land ownership, and more. These NFTs can have history and metadata attributed to them as you play the game. In this way, they can build value both in nostalgia/personal attachment, and their utility in the game.
When you add mechanisms such as crafting, spending, trading or risking your assets in battles - as part of the gameplay, you can start imagining the possibilities for future online games.
Efinity (a parachain we're building to launch on Polkadot) will also allow developers to remove any entry costs or friction for gamers. Our hope is that it paves the way for more mainstream gamers to experience NFT ownership and interaction without the existing technological hurdles.
Chris: So I think as more games are developed, the monetization aspect of facilitating the development of the game will start to shift away from higher priced tokens. In developing a game, there's got to be something to attract new players if the tokens are suddenly out of economic reach.
Ideally, games use traditional sales models to facilitate the NFT aspects of item ownership for players. However, players need to understand that if a game adopts that model, then players looking to value those NFTs has to be taken into consideration.
Right now, there's a lot of expectations from early adopters that there's a substantial gain for them later. However, as gamers point out, the game needs to be more about the gameplay and not the financial model for players based on speculative NFT values.
Essentially, the game studio needs to make sure the player model fits that expectation and that players themselves know that model upfront too.
What are the best NFT games on Enjin?
Witek: Check out our games showcase here: enjin.io/showcase
Unity dev here, can you break down the manor in which players are expected to utilize NFTs in my game? Say I reward a player who beats my game with a NFT, after minting it how do I get it to them / do they receive it?
Chris: Age of Rust is a Unity game, so easy to do. In short, you present a QR code to players, they link their wallet to your game. In the case with Enjin, there's an API to facilitate the sending, receiving, trading, etc. functions.
So it's simply a matter of calling a function to tell the platform to send Token A to Player B, etc. After that, it shows up in the Enjin Wallet right away.
Witek: With Enjin's current generation of SDKs, the player would link their mobile wallet to your game. You'd be able to transfer the item directly to the player ID once linked (this can also be done as part of the actual mint transaction).
In our next-generation platform (Efinity) coming shortly, we've further simplified the process: you'll be able to create on-chain accounts for each player in the background and mint/send assets to those accounts as they play. When the user decides that they want to take full control of the account on-chain, you can pass them ownership once they link any wallet.
Majority of the gaming crowd see's crypto gaming as a scam or ponzi scheme to make devs a quick buck. How can we as a community combat this thought process and show them that its not about hiding a new form of microtransactions, but instead giving real power to game players in the form of item ownership and lasting item utility throughout not just one, but potentially a metaverse full of games?
Joe: I think that the shortest path to the type of adoption and acceptance you are talking about is through making compelling games that use NFTs in a way that facilitates new and fascinating types of gameplay and worlds. Developers need to use blockchain and NFT tech to elevate the medium. If that happens, people will adopt the format.
Chris: The blockchain gaming community has had a lot of thoughts on this and I've been listening to a lot of the feedback from Reddit, Twitter, Discord, etc. The conversation reminds me a lot of what the conversation was with Bitcoin back in the 2013/2014 days where just mentioning it was a door shutting event.
I think the conversation has to be led quite a bit by players working with developers to tune the messaging. I see it as a transformation of play to earn as play to own, something suggested by one of our community members. I like that a lot because it really cements the idea around what it is, loyalty towards players and not something for the studio to monopolize on.
The other aspect is the metaverse/multiverse aspect to talk about more, that's really powerful because its a concept that I think is not only attractive to gamers, but also to developers as well.
Valve tends to like innovation and being at the forefront of technology. Have they (or Epic) not reached out to you guys after your detailed blogpost about why they shouldn't ban? Also they have their own marketplace where they sell CSGO skins etc, how could Enjin/Efinity improve their existing ecosystem in a compelling way?
Witek: They haven't replied to us as of yet. We can only speculate as to what the core reason was for the decision, at this time. Perhaps there is regulatory uncertainty and Valve is taking precautions and being careful.
The wording on the terms of service did specify "exchange of cryptocurrencies or NFTs" which indicates they may be worried about potential circumvention of Steam's monetization platform.
NFTs being exchanged in a game doesn't necessarily mean that every transaction needs to be taxed through their platform, however. We'd like to see Valve define some reasonable policies that permit NFTs in games but allow for them to earn their cut when clear purchases happen in-game.
Joe: So far, Valve and Epic have not reached out. We would love to chat with them though.
Has Age of Rust started any discussions with Epic Games? They expressed a more welcoming attitude vs Valve.
Chris: Yes, we've started to evaluate Epic as well as other platforms to see what the requirements are and that it makes sense for the game as well as the players. It was cool to see Epic open the door to blockchain games and NFTs.
Despite going at Valve with this, are you also going after regulators for clarification? Because if I was Gabe, and in US, I too would stay 300 yards from NFTs. Valve would face massive legal liabilities by getting involved under current US regulatory cluster. So, are you helping Valve to make the “right call”?
Joe: Im am not a fan of rushing to regulation. I think a good way for regulators to zero in on good policy would be to first observe the NFT gaming economy in action. If Steam prohibits this type of content, regulators will be left with incomplete information, and be more likely to pass damaging regulations.
If you want good regulations passed, give the tech time and space to mature in the wild.
Counter Point: Valve shouldn’t reverse their ban. They’re a business. They’re almost certainly going to roll out their own blockchain and NFT platform. They’re doing what’s best for their business and investors. If I was in their shoes, I’d do the exact same thing.
Witek: With blockchain, you can't put the genie back in the bottle and try to centralize it. Blockchain gaming needs interoperability in order to flourish.
Open standards like ERC-1155, ERC-721, and EIP-2981 on Ethereum, and the next generation of coming interoperable blockchains, are the foundations for a metaverse.
Imagine only being able to play Half-Life: Alyx with Valve's Index, to the exclusion of anyone who owns an Oculus, Vive, or Reverb G2. With the diversity of games, publishers, and developers building on blockchain technology, it doesn't make sense to limit such a popular game store to one kind of blockchain platform/technology.
Joe: It would be a mistake for Valve to spin up their own blockchain. They should do the right thing for their users and adopt the open standard, period.
Let’s take it easy on Valve/Steam and understand that they are simply trying to navigate potential regulations first…thoughts?
Chris: My own view on this is that Valve/Steam missed an opportunity. I'm disappointed, sure, because I think these roadblocks sometimes stall adoption for crypto in the larger sense. However, it's creating more opportunities in other areas for other platforms, so there's a silver lining there.
I do hope that Steam does change back and allow blockchain games and NFTs to return. Steam is looked at as a keystone in the mainstream gaming industry, so if they're an adopter, it helps everyone in crypto.
Why did Steam ban crypto?
Chris: The short answer is because they view NFTs as having "real world value" outside of a game, which they've come to decide they don't want on their platform. Blockchains & NFTs in games, decentralize the buying, selling, and trading of items outside of the Steam Marketplace as well. Overall, the main reason is because items have value in the real world.
How big do you think it would be if CS:GO decides to adopt NFTs?
Chris: I think that if any AAA game adopted NFTs today, it would accelerate the adoption. Adoption is already happening with other studios and game titles testing the waters, but something like CS:GO would shift the current mindset a lot with mainstream gaming and NFTs.
Do you think blockchain games can still be built in a way that prevents virtual inequality due to massive NFT prices that may result for certain in-game exclusive items?
Joe: Scarcity will always drive up prices of things, but NFTs don't need to be used to create just one of something. There are many ways what NFTs can be used in games to simply improve game-to-game interoperability and user experience. Actually owning an in-game item in my opinion is a more equitable solution vs the current way game companies deal with in game purchases and items.
Anything would be better than what we currently have, especially NFTs.
How do you see the big gaming studios adopting NFTs? Will most of them create their own NFT marketplace or will they adhere to already established ones like Enjin?
Witek: We've seen a lot of desire for branding/whitelabeling, but not wanting to develop/maintain an in-house marketplace - they realize that they have a budget, their games have certain lifespans, and they want to support something that continues to grow without the studio's direct involvement.
Another one of the major challenges and desires from AAA studios has been a frictionless experience for their users - in some cases being able to connect to the marketplace directly through the game, or access their wallet through a mobile web browser. We've taken this feedback into account while building our upcoming marketplace NFT.io and Efinity, which we're building on Polkadot.
Chris: I think at first, we'll see larger studios do it in the form of achievements, loyalty rewards, and promotional items. As far as marketplace goes, I think it makes sense for them to adopt what's out there, a marketplace like Enjin's makes sense for them vs build their own.
Would love to hear more on Enjins view of Ultra, I know both projects dabble in the same space and have some things in common but for example Ultra does game distribution while Enjin does not. Does Enjin view Ultra as competition or can you see possible future partnerships?
Witek: Many blockchains and platforms will co-exist, and each one will diverge towards its own unique audience, functionality and user experience.
The potential blockchain gaming ecosystem will grow to be orders of magnitude larger than it is now, by the end of this decade. It's in everyone's best interest to work together to create well-thought-out, interoperable standards so the multiverse isn't too fragmented. We think most users will want to be part of the most open networks.
We've seen a lot of NFT driven games that seem to be focused on making money and not so much about having fun. Are there any upcoming NFT games where all the NFT's dont have any infused value, and their value will only be what players perceive them to be? I imagine a game like Diablo 2, the community decided Stone of Jordan was their standard currency, not the creators.
Chris: Yeah, so the gaming experience needs to come first, no matter what kind of game it is. It needs to be a fun game to play first and foremost, otherwise it won't resonate with gamers. There's a lot of blockchain games in development that have a unique take on the relationship with the value of the NFT being used. A lot of it though has to do with how the studio is monetizing the title along with how the faucets and sinks are designed to be used inside the game. There's nothing to really prevent a community deciding value for a particular NFT used in game over one that the developer has chosen, that's really what the decentralization aspect for a game truly offers players.
One thing that I have always wondered about NFT driven games is whether you plan to allow the transfer of them to different game titles, similar to how you used to be able to move Pokémon from an earlier generation to a later one.
Witek: This concept is often referred to as the blockchain gaming metaverse. We're actually seeing a lot of interest in exactly this, from larger brands and publishers.
Another interesting discussion is NFTs that move across completely different mediums. For example, a movie ticket could provide you with a promotional NFT that is usable in a related game. Fashion that gives you a digital twin for metaverse games or social apps.
Will the paratoken standard be capable of reducing some of the risks involved with NFT's, such as wallet drainage, and if so, would Steam be more inclined to review their decision?
Witek: Yes - A difficulty of developing on Ethereum is the smart-contract-based EVM. It's a trustless blockchain, but you have to be willing to trust to smart contracts or developers in order to actually use it. Because of high fees, standards have to be light and efficient and that results in shortcuts like "ApprovalForAll". In a perfect world, developers could build additional functionality to protect users, but with high blockchain fees, most resort to trust.
With substrate and the paratoken standard, it's much easier to facilitate native, predictable functionality for NFTs and assets, that would prevent wallet drainage. We're excited to share the standard with the community in the coming week.
Another component of this is providing contextual data to users, in wallets and applications. Instead of signing an unreadable transaction string, we want users to see things like "Do you want to craft item X by burning item Y and Z?"