NFT Games in the Crosshairs

Video game developer and distributor Valve Corporation quietly banned all games “built on blockchain technology that issue or allow exchange of cryptocurrencies or NFTs” off of its digital distribution service Steam last week. As usual, Epic Games has stepped in, now welcoming NFT and blockchain games despite its past hesitance. In 2020, the video game industry was sized at over $170 billion USD, making it the largest form of entertainment in the world. Adoption or self-regulation of blockchain gaming at this early stage may have a significant impact on the growth trajectory of the genre.

Following a stealth update to Steam’s developer onboarding guidelines, the developers of NFT game, Age of Rust, informed players that their video games would no longer be available on the Steam platform, which is the largest PC gaming client and marketplace. According to the developer of Age of Rust, Space Pirate, “Steam’s point of view is that items have value, and they don’t allow items that can have real-world value on their platform.”

Since this occurrence, video game developer and distributor Epic Games has stepped in to fill the hole that Valve created in the market  Epic told The Verge they are “open to games that support cryptocurrency or blockchain-based assets.” This is a reversal from the prior position of Epic’s CEO, Tim Sweeny, who said about a month ago that the company would not touch the NFT space because “​​the whole field is currently tangled up with an intractable mix of scams, interesting decentralized tech foundations, and scams.”

The reasoning given for the reversal is that Tim Sweeny believes that as long as video game developers “follow the relevant laws, disclose their terms, and are age-rated by an appropriate group,” they can sell their games on the Epic Games Store. Epic has stopped short of supporting cryptocurrency transactions through their payment service, so the developers of blockchain games need to use another payment system. Tim Sweeny also stated that Epic, as game developers, would not use blockchain or crypto technology within the games that they are currently developing. 

However, this announcement does not mean that NFT games can flock over to the Epic Games Store just yet. Currently, Epic’s self-publishing program is in a closed beta. But this announcement brings excitement to the NFT gaming community in anticipation of NFT games being formally accepted to Epic’s store. The announcement could also eventually give Epic the upper hand in overthrowing Valve as the largest PC game distributor. Since its launch, the Epic Games Store has marketed itself aggressively to new users, offering top games for free to all users each week in addition to major promotions throughout the year.

These events over the past couple of weeks have brought into question the role digital game stores have in NFT games. Currently, digital game stores like Steam have brought in multiple new players into the NFT ecosystem. But is this really a necessity in a time of the digital age? 

One of the biggest counterarguments to the necessity of digital game stores is the success of independent games like Axie Infinity. Currently, Axie has the freedom to control, its own distribution of its game and associated NFTs, its creative path and does not have to abide by any rules put in place by a distributor or marketplace.  Development and marketing freedom is rare these days given the existence of large publishers like Activision Blizzard and Electronic Arts, who can control content, distribution and monetization.

In addition, NFT games pose a significant threat to AAA developers by directly rewarding their player base for playing and interacting with the ecosystem in various ways instead of simply taking money. NFT games might be the future for the gaming industry, and companies like Epic have the vision to help this new genre of games move forward.