Rick Ellis helped create the infrastructure that made Steam the dominant force in PC gaming. So when he joined a little-known San Francisco startup in mid-2022, promising to build "Steam for Web3," it raised eyebrows—or would have, if more people had been paying attention.
The reason for Ellis's career pivot traces back to October 2021, when Valve abruptly banned blockchain games from Steam. The move was decisive, perhaps even predictable given Valve's historically cautious approach to anything resembling speculation. But it left an entire category of developers in the cold. No major PC distribution platform would touch NFTs. No alternatives existed at scale.
For Ryu Games, a startup that had just pivoted from mobile tournament software to Web3 infrastructure, the timing looked like opportunity.
The Architect and the Gambit
Ellis isn't exactly a household name, even among gaming insiders. But his resume reads like a blueprint of modern PC gaming infrastructure. Years at Valve, building the systems that turned Steam into the default distribution channel for an entire medium. Stints at Monolith, ArenaNet, King. Then Sharkbite Games, his own studio founded in 2017.
When Ryu announced Ellis as Chief Product Officer for Flame—its new Web3 game launcher—on June 8, 2022, the message was clear. This wasn't another speculative crypto play. They'd hired someone who understood digital distribution at industrial scale, who'd worked on the Half-Life 2 physics engine, who knew what it actually took to move tens of millions of users through a platform without breaking.
"The technical and UX challenges Flame is solving are going to bridge the gap between gamers everywhere and the next internet," Ellis said at the time. The phrasing was optimistic, maybe more than the moment warranted. But the hire itself signaled ambition.
Consider the challenge: Steam commands roughly 75% of PC game distribution. Recreating even a sliver of that experience—the seamless downloads, the social features, the discovery algorithms—requires institutional knowledge most startups simply don't possess.
What They Built
Flame launched as a non-custodial, multi-chain wallet wrapped in a game launcher and storefront. The platform supported multiple blockchains at launch: WAX, Polygon, Immutable X, EOSIO. It used social login to sidestep the usual Web3 friction points—the seed phrases, the wallet interfaces, the paralyzing question of which blockchain runs which game.
Under the hood, Ryu built on AWS infrastructure. EKS, EC2, DynamoDB, CloudWatch. The company integrated thirdweb's SDK for smart contracts and Paper Wallet for email and credit card onboarding, attempting to abstract away the crypto complexity that typically sends mainstream gamers running.
The beta launched with two titles: Splinterlands, a long-running Web3 trading card game with an established player base, and Pegaxy, a horse-racing title from Mirai Labs. By September 2022, Ryu had added CryptoBlades, Swords of Blood, Blockchain Cuties Universe, and games from Ulti Arena.
The company claimed over 50 developer partners had committed to the platform. An October 2023 AWS blog post mentioned Ryu was targeting 60 live games by year-end.
Whether they hit that number isn't entirely clear from public records.
The Race Thickens
Flame never had the field to itself.
HyperPlay emerged around the same time, backed by MetaMask and Game7, raising $12 million in June 2023 from Griffin Gaming Partners and BITKRAFT. Their approach differed—aggregating games from Epic and GOG while adding Web3 wallet functionality on top, rather than building a native blockchain-first platform.
Elixir Games secured a strategic partnership with Square Enix and formed ties with Gala Games, making acquisitions like LitLab Games along the way. Even Epic Games Store stayed conspicuously open to blockchain titles. By March 2023, Epic's store general manager noted that some crypto games had performed "pretty well"—faint praise, perhaps, but praise nonetheless.
The landscape remained crowded and unsettled. Maybe that reflected genuine market potential. Or maybe it just meant everyone was guessing.
The Pivot That Wasn't
Ryu didn't start as a blockchain company. Founded in 2018, it initially built cash-tournament SDKs for mobile games—a different kind of real-money gaming, but decidedly Web2. The company raised $2.3 million in March 2021 from Velo Partners, Citta Ventures, MGV Capital, and 500 Startups.
When Ryu pivoted to Web3 in 2022, blockchain gaming was riding significant hype. Axie Infinity had briefly become one of the Philippines' most popular pastimes during the pandemic. Venture capital was pouring into the space. And Valve's ban had just created an obvious gap.
"Flame is the last missing piece before Web3 games are just 'games,'" CEO Ross Krasner declared at launch.
That turned out to be overly optimistic.
Two years later, in July 2024, Treasure DAO proposed acquiring Ryu's assets—the Flame launcher, SDKs, developer dashboard, and associated games—for approximately $400,000 in MAGIC tokens. The deal closed in September 2024.
It's a modest exit, the kind that doesn't usually generate headlines. But the technology Ryu built does live on within Treasure's ecosystem. And the problems Ellis and his team tackled—multi-chain support, frictionless onboarding, developer tooling—remain relevant, maybe even essential, for whatever comes next.
The Question That Remains
Was Flame too early? Too underfunded? Or was the premise itself flawed—the idea that blockchain games needed their own distribution infrastructure rather than integration into existing platforms?
The market hasn't answered that question yet. Maybe it never will with any clarity. Epic's willingness to host blockchain games suggests one path forward. HyperPlay's aggregation model suggests another. And the quiet acquisition of Flame by Treasure DAO suggests that sometimes the value isn't in being first, or biggest, but in building solid infrastructure that someone else can iterate on.
For now, the race to build Steam for Web3 continues. It just doesn't have a single front-runner, a dominant platform, or even consensus on what success looks like.
That vacuum Valve created in October 2021? Three years later, it's still there.
