So, Valve (Steam) is banning in-game ads. This means that any games with advertising is on the chopping block. And any future games with the same content can't be published on Steam. The thing is, all sorts of free-to-play games, and even major hits like Call of Duty and Battlefield have ads for new packs, operatives, DLCs, events and so on. So does this mean all of these games will be banned? No. It does not. It turns out that only games with the most invasive ads will have to either remove those features, or simply not publish on what is arguably the largest gaming marketplace in the world. 

Valve's Rules: Targeted or Blanket Ban?

According to Valve's policy concerning the ad ban, product placement is perfectly permissible, and so are cross promotions. What are cross promotions? Cross promotions are activities or ads to market bundle, sales events, and even content. In fact, they don't even have to be contained to Steam. Developers can push products or brands outside of Steam's scope because players do find value in them. Paid advertising to drive traffic to the developer's product page is also allowed. Steam even provides some tools to help.

So what's not allowed? Well it turns out that there are certain games, NBA 2K being an example (2K21 and 2K24 specifically), actually require the player to interact with ads in order to continue playing. Some even reward the player for interacting with ads. These ads don't provide any additional value to the player and Valve sees them as "gating gameplay". As a result, Valve has resorted to banning such forms of advertising. Frankly, I agree with the decision. If you want, you can take a look at the official document and read for yourself, here or view the screenshot below.

Greed or Charity?

Valve can't possibly be doing this for the benefit of players, right? There's no way. There has to be some sort of moneymaking rationale behind it. Maybe it's because Valve isn't getting their precious 30%!

Well, that's not true either. You see, according to the Steam Distribution Agreement, Valve gets a cut of all packages, DLC, in-game sales, and community marketplace fees. So regardless of whether or not the purchase was for the game itself or the result of an ad within the game, Valve will get their cut as long as the origin of the player is from Steam. Check out the following paragraph to Steam's 2018 addendum to the Distribution Agreement:

Read the full addendum here.

My Thoughts

With this being said, it stands to reason that the removal of invasive ads would be a detriment to Valve's bottom line, if short-term monetary gain is what they were interested in. However, I would argue that no company whose bread and butter is customer retention would want to risk losing customers long-term just for a few bucks now. That kind of thinking isn't good for the longevity of the company, and it's certainly not good in the eyes of investors, who typically make their contributions based on long-term speculations. I say this is a very good thing for the players.