Has a lot to do with the size of the developer and popularity of the game.

Ironic how OP’s avatar is taken from Deus Ex. One of the few games that lets you kill children. Most people don’t try, but I’m pretty sure everyone still finds a creative way to kill Louis Pan (he’s a boy in the Hong Kong map who goes around extorting businesses, and releasing rats when they won’t pay. He works for one of the triads, and though you do quests for them, they do not care if you kill him, though I think they remark on it).

Worse, in Deus Ex all the children are male (due to resource limitation). In the sequel, all the children are female and you can still kill them. There’s a whole school of them and you can basically do a school shooting. The game isn’t meant for that, but you can totally do it. Sold on Steam. Both of them are. Frequently on sale.

One of my favourite game series. I’m not knocking it. But it does show that Valve is willing to relax the rules for some.

Oh yeah. In Fallout 3, you can straight up sell a 5 or 6 year old girl into sex slavery. And there’s a reward for doing so (an item you can only obtain in this way). You have to follow a few unlikely steps to get it, but it’s also not hard. There’s a slaver faction, and they won’t shoot you on sight. You want to get in there for a Bobblehead (permanent skill increase, in this case Barter, which helps your buy/sell prices and speech checks), so you enslave one person, or kill them. Another quest has one slaver target sniping you, and experienced players circle round and kill him first, so that gets you into Paradise Falls (the slaver settlement). If you complete all the slaver contracts (enslave three other people by making them put a bomb collar on their neck and give them marching orders), the slaver leader tells you he has a client with certain tastes, and he wants you to go find the youngest girl you can. There’s a settlement (cave) full of children, and you must pass through to complete the game. There’s one girl, Bumble, who is explicitly declared as the youngest, little more than a baby, barely able to fend for herself. And you can speech-check her to follow you outside to hand her over to the slavers. Slaver, it’s actually just one. And, fun fact, a lot of veteran players do this, because there’s a bug where you can “reverse pickpocket” weapons and armour onto NPCs to equip them better. Including kids. So what we do is, we take Bumble out, then we reverse pickpocket good armour and a flame thrower on her. These increase her internal/hidden confidence stat, so when the slaver threatens her, instead of running and getting caught, she attacks. And she wins. And then proudly walks back in her armour. It’s funny.

A lot of older games had stuff like that in it, either references or outright stated. I’ve never heard of Valve going after them.

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Without playing/seeing what Horses is like, it’s difficult to evaluate Valve’s decision.

That being said there is tons of weird and fucked up NSFW stuff on Steam.

Banning a transgressive game seemingly without any explicit content seems excessive.

From my perspective, this is another reason it’s a bad idea to have an American company (even a somewhat user-focused one like Valve) be a steward of modern digital services. Local culture puts too much emphasis on the theatrical elements of morality. Not to mention the challenges faced by the locals in areas such as corruption and rule of law (Valve trying to cheat on refunds, adding mandatory arbitration clauses, Soviet-style kangaroo courts essentially, and operating unlicensed gambling schemes).