Enjin Gradient Hero
Education
October 18, 2021

Why Steam Should Not Ban NFT Games

Why Steam Should Not Ban NFT Games
Steam recently banned blockchain games. We think they should reconsider.

A lost Gameboy nudged one of my colleagues to join Enjin.

Her fondest childhood memory is finally managing to evolve Charizard on Pokemon Red. Shortly after, her saddest childhood memory followed, when her cousin borrowed her Gameboy and somehow lost it.

She never saw that hard-won Charizard again.

Why Gaming NFTs Make the World a Better Place

Imagine if blockchain and non-fungible token (NFT) technology existed in 1998.

Imagine a child being able to laugh at their parent’s 90’s Pikachu, Charizard, and Blastoise in all their pixelated glory, in a simple blockchain wallet app, alongside Pokemon Go

Imagine being able to revisit your final party from Dark Queen of Krynn from 1992, with all the fond memories of staying up to reroll 18s on digital dice, while creating Dungeons and Dragons characters, and figuring out how to keep a +5 longsword.

Imagine still having a character and items from Diablo II from 2000, ready to plug into Diablo II: Resurrected in 2021.

Being a 90’s gamer was rough.

Without YouTube, Twitch, and cloud storage, your beloved digital characters simply disappeared after you stopped playing, forgotten on storage media that no longer exist today.

Who wouldn’t want to keep a Pokemon Red Charizard, a Dragonlance Solamnic Knight, a Diablo II Barbrarian, a League of Legends Lux, or a Valorant Cypher—forever?

No one could possibly argue that this is a bad thing.

In fact, we at Enjin find this vision so compelling that we’ve spent the last four years doing our best to make it a reality—building everything from a blockchain development platform, to a Polkadot parachain called Efinity, designed specifically for NFTs. 

This simple vision is the entire reason our team exists.

Age of Rust Banned From Steam

Late last week, one of our earliest adopters Chris LoVerme, developer of the science fiction puzzle game Age of Rust, shared disappointing news.


Chris has been integrating blockchain into his game since 2018, long before “NFT” became an everyday term. He poured years of his life into Age of Rust, and was looking forward to fully launching it on Steam. 

Unfortunately, Steam has made the decision not to distribute games incorporating blockchain or NFTs, with Section 2.6 of its Distribution Agreement now stating:

“2.6 Application Items and/or Currency. To the extent any Application supports the sale of digital items or digital currency for use in the Application, Company shall not allow or facilitate the redemption or exchange of such digital items or digital currency for real-world currency.”

Following Age of Rust’s ban and subsequent tweets, gaming publications took note.

A Kotaku article praised “Good Guy Steam”: “The NFT scene is famous for scammers who bail after the money is paid in, and there are multiple cryptocurrency projects in which the developers just expect investors to trust them on a spit handshake. Not to mention that NFTs (and cryptocurrency in general) are environmental disasters. But as long as high-profile NFTs can potentially command sales prices of millions of dollars, crypto bros will continue peddling the snake oil.”

PC Gamer echoed this sentiment: “The world of NFTs and cryptocurrencies has thus far been fraught with scams and shady dealings, and it's possible Valve doesn't want its platform to be used by any more gambling businesses or other schemes that could put it in legal danger.”

“We aren’t touching NFTs as the whole field is currently tangled up with an intractable mix of scams, interesting decentralized tech foundations, and scams," tweeted Epic Games CEO Tim Sweeney last month.

All this saddens me on a very personal, visceral level.

What happened to the simple vision of Charizard, Lux, or Cypher living forever in one’s phone?

Good Games Are Not Scams

The persistent scam narrative is unfortunate. Perhaps we can discard abstract assumptions of scammers, and focus on the actual developer, Chris, and his game, Age of Rust.

Critics cite the “Evolved Apes” NFT scam from a few weeks ago, where creator “Evil Ape” sold over 4,000 NFTs of pictures of stylized apes, promising a fighting video game would be developed for them. He soon disappeared with US$2.7 million of cryptocurrency, and the artist wasn’t even paid.

But “Evil Ape” and Chris LoVerme could not be more different.

Chris worked as a network engineer for over 20 years, and worked in NASA testing parts for the Mars Rover. He is an accomplished individual who began a second act as the indie developer of Age of Rust. A senior NASA engineer is hardly the type to launch a get-rich quick scheme under an online alias and disappear.

Chris has been building Age of Rust since 2018, and made tremendous progress ever since. You can check out the game on the official website.

There is no reason to believe every indie developer is secretly an Evil Ape.

Otherwise, Kickstarter projects and crowdfunding should not exist, and Amazon, Cisco, and Qualcomm should have shut down after the stock market crashed 78% in 2002.

Surely we cannot judge developers like Chris—who are trying to do all the right things—based on the Evil Apes of the world. Surely, platforms can empower the Chris LoVermes of the world, and keep the Evil Apes out.

Further, while some dismiss NFT sales as get-rich-quick schemes, they create an important alternative, long-term source of funding for indie developers like Chris, as a new evolution of crowdfunding. It is not a question of getting rich quick, but of being able to afford working as a full-time indie game developer for several years.

At Enjin, we see NFTs as the backbone of new models of community engagement by indie developers and other content creators. 

NFTs allow disintermediation, enabling developers and artists to connect directly with fans as easily as tokens on blockchains can be detected. The new sense of ownership and permanence created by NFTs facilitates the creation of new communities of people that get a sense of belonging to an exclusive club, centered around the content creator. New art, music, or video game items can be sent to fans holding specific NFTs.

And yes—NFTs also create new channels of financial support and content monetization for creators, developers, and artists.

(To be clear, however, Chris intended to sell Age of Rust solely on Steam for normal money. He has no plans of selling NFTs or tokens as part of launching the game. He's even giving them away to reward players for the valuable time spent in-game.)

Finally, blockchain technology is actually intended to combat scams and fraud, being publicly viewable and immutable. Digital game items have had value long before blockchain and NFTs, and scams involving EverQuest accounts and Counter-Strike skins predate blockchain and NFTs.

Regulation Shouldn’t Hamstring Indie Devs

Underneath the scam narrative, however, is an even more complex regulatory debate.

Responding to the Steam ban, Epic Games CEO Tim Sweeney tweeted: “Epic Games Store will welcome games that make use of blockchain tech provided they follow the relevant laws….”

Don’t miss that second part.

As with many new technologies, blockchain has created a labyrinth of legal issues. The ability to transfer value across the world, in trustless transactions without intermediaries, and relatively cheaply and instantly, is an amazing thing. However, governments necessarily want to ensure this is not abused by terrorists and criminals. Further, where this ability to transfer value is used in investment contexts, regulators also seek to protect the public from, yes, scams.

These are important, legitimate debates beyond the scope of this article. 

However, we must emphasize that law has always expanded to empower technology, not ban it.

In discussing cryptocurrencies, US Securities and Exchange Commission (SEC) Chair Gary Gensler argued that governments had to create rules of the road to allow people to be able to drive cars. He never argued that cars should be banned.

The novel blockchain debates of today will simply be textbook problems for the next generation of lawyers. It is no different from how lawyers had to solve the earliest questions created by the internet, such as which country’s laws apply to this abstract space in contexts from taxation to crime to defamation.

Laws that once governed trains and ships expanded to cover airplanes, and then satellites.

Laws that once governed physical letters expanded when it became possible to send telegrams from New York to Los Angeles, then expanded when it became possible to send emails to anyone on the planet.

Let me share two thoughts.

Regulation for Cryptocurrencies & NFTs Is Different

First, we need to remember that NFTs and cryptocurrencies are actually two completely different blockchain concepts. It is not useful to conflate them.

What do I mean?

Cryptocurrencies began with Bitcoin in 2009. Bitcoin is an electronic peer-to-peer cash system precisely intended to transfer value. This attracted money transfer regulations, all the way to the Silk Road prosecutions in 2013 where, yes, Bitcoin was used in dark web e-commerce for drugs. Again, governments want to make sure terrorists and criminals are not abusing this new way to transfer value.

However, we need to realize that NFTs have the exact opposite context. It makes little sense to apply the same regulation. For example, one can now buy burgers in El Salvador using Bitcoin, but it would be impossible to buy burgers with NFTs. Non-fungible precisely means they would be difficult to use for payment, unlike fungible money.

Similarly, it would be odd to apply finance laws to NFT versions of Charizard, Lux, and Cypher, or the SEC should have been policing EverQuest account auctions 20 years ago. It would be odd to apply investment laws to NFT art, or the SEC should also be policing art galleries.

If crowdfunded presales of new products (including digital products) are acceptable, shouldn't crowdfunded presales of NFTs be treated similarly? The blockchain element (assuming there is no cryptocurrency element) should not give rise to different regulatory treatment.

Look no further than China, where cryptocurrencies are banned, yet NFTs and the underlying blockchain technology are perfectly legitimate. McDonald’s China gave the Big Mac Rubik’s Cube NFT as gifts to 188 employees to celebrate its 31st anniversary in China, and the inauguration of its new Shanghai headquarters.

Regulators must mentally untangle cryptocurrencies and NFTs. The latter are defined by uniqueness and immutability, and it is readily possible to have NFTs not intended to be rare or derive value from rarity.

For example, Enjin’s Beam system can distribute thousands of NFTs via a QR code, such as on Instagram, Twitter, or even our home page. NFTs in this context are intended to promote the sender by giving users a memorable NFT to interact with, but the NFT is not intended to have monetary value. Land titles, vaccine passports and educational certificates are all ripe for conversion into NFTs, but “Evil Ape” will likely not be auctioning off NFT vaccine passports.

This thought is especially important for Age of Rust.

Age of Rust actually uses less blockchain elements than one might think.

In the post-apocalyptic puzzle game, players receive NFTs (some infused with cryptocurrency like Enjin Coin inside) as they progress. You don’t need to have NFTs or cryptocurrencies to play it, although you do need to connect the Enjin Wallet app in order to receive the NFTs that are part of the game.

Further, outside the actual game, a player can purchase “Mission” or “Origin” cards which are NFTs. If detected by Age of Rust, these will unlock special puzzles. The player can also purchase or trade for other NFTs which turn into in-game equipment.

The point is, Age of Rust does not generally feature in-game transactions, even if it interacts with NFTs. It is not possible to buy or sell NFTs or cryptocurrencies within the actual game. Thus, it is not possible for terrorists to buy or sell NFTs or cryptocurrencies within the actual game.

As a caveat, solving puzzles in Age of Rust does give in-game blockchain tokens called Rustbits, which can be redeemed in-game for NFTs. However, NFTs cannot be changed back into Rustbits, and Rustbits and other NFTs cannot be transferred to other players in-game. Because these are blockchain items, they can be transferred outside the game, but that is true of any blockchain item. The point is that Age of Rust’s in-game transactions are limited compared to other blockchain games.

Nuances like this should be considered when reviewing Age of Rust specifically. This kind of legal analysis is always context-driven, and bans that conflate blockchain, cryptocurrencies and NFTs may be overly broad.

Indie Devs Should Be Able to Comply With Regulation

Second, while blockchain regulatory debates are legitimate and complex, indie developers like Chris, who just want to build a good game, should not bear the burden of all this complexity.

Websites are long past the point of writing raw HTML on Windows Notepad. Today, countless ready-made tools allow you to build websites, blogs, and online stores with minimal technical skill. This ease of use allows countless writers and small businesses to tap new audiences and markets. Many blogs, newsletters, and online businesses would not exist were the technology not so easy to use.

Similarly, Unity and Unreal make it possible for even individual student hobbyists to develop games. Enjin’s developer tools also allow easy integration of NFTs into such games.

Why Steam Should Not Ban NFT Games
Tell Steam: Don't Ban Blockchain Games
Sign the petition to tell Steam: Blockchain games and NFTs are fun and exciting.
Sign Now
Thank you! Please check your email.
Oops! Something went wrong while submitting the form.

The technology is already here, but regulation has not yet caught up.

The likes of Chris have no interest in the legal minutiae, he just wants to know what rules he needs to follow to make Age of Rust a reality. Certainly, independent game developers like Chris cannot be expected to hire a legal and compliance team on the level of a major bank and pay lawyers more than coders and artists.

Hopefully, regulators and platforms can quickly clarify the issues and solutions so that indie devs can simply build without having to get a law degree. Perhaps there can be ways to outsource regulatory compliance, in the same way a small business simply integrates PayPal or Stripe, instead of processing its own payments.

Again, the technology is already here. It will find its way to audiences regardless of what regulators and platforms do.

Conclusion

While the regulatory questions regarding blockchain use are legitimate and important, one hopes regulators and platforms take a more nuanced view and do not conflate blockchain, cryptocurrencies and NFTs. We hope Steam revisits Age of Rust, especially considering it does not even have in-game transactions, much less its own in-game cryptocurrency.

(Gabe Newell and Tim Sweeney—can we talk?)

Let us not lose sight of the simple vision of a Charizard, a Lux, or a Cypher that lives forever. And let us not let broader, complex debates overshadow how an indie developer may lose the game he poured years of his life into.

Head to AgeofRustGame.com, read Chris’ sci-fi vision of NFT puzzles and rogue mechs, and learn what the game is actually about. Surely, you’ll agree the world deserves to enjoy this NFT-driven experiment

We sincerely hope to see NFT games back and thriving on Steam, many of them benefiting from Efinity—in the near, awesome, decentralized future.


About the Author

Oscar Franklin Tan, CFA is the Chief Financial Officer of Enjin. He was previously ranked one of the leading fintech and startups lawyers in Singapore by Chambers and Partners, and graduated from Harvard Law School. He received “JCI Ten Outstanding Young Persons of the World,” one of the world’s most prestigious “Under 40” awards. He found himself in Enjin after talking about staying up all night to farm more rare items in Diablo, not knowing the person in front of him was the founder of Enjin.

Enjin for Developers
Versatile SDKs, a robust API, and development tools to create NFT-powered projects—no blockchain coding experience required.
Learn More

You might also enjoy

Enjin Governance and 250M ENJ Early Governance Rewards Pool
Enjin
Education
Development Updates
December 19, 2023
Enjin Governance and 250M ENJ Early Governance Rewards Pool
Enjin Blockchain “Triple Migration” Successful; 51% Complete in First 60 Days
Ecosystem
Education
November 15, 2023
Enjin Blockchain “Triple Migration” Successful; 51% Complete in First 60 Days
Enjin NFT Migration FAQs
Enjin
Education
September 12, 2023
Enjin NFT Migration FAQs
Managed Wallets: How New Enjin Users Claim NFTs Before Opening a Wallet
Education
September 5, 2023
Managed Wallets: How New Enjin Users Claim NFTs Before Opening a Wallet
Download the Enjin Wallet
Google Play Logo App Store Logo
Join the movement to decentralize the Metaverse
By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.