The next 12 months will show whether blockchain games have sufficient drawing power on the Epic Games Store, one of PC’s largest online gaming marketplaces.

Why it matters: For all their funding and fanfare, crypto-based games have been blocked from or kept off most traditional gaming marketplaces. That has left the store run by the makers of Fortnite as one of their largest proving grounds.

Driving the news: Epic’s store has five crypto games in its marketplace now and “close to 20” in the pipeline, Epic’s store GM Steve Allison tells Axios. None are made or published by Epic.

• The marketplace’s first blockchain game was Mythical Games’ Blankos Block Party, a social multiplayer game, which debuted in Epic's store in September.
• Epic isn’t sharing usage stats, but Allison said the game is “pretty well-played” and noted that another crypto game on the shop, the metaverse platform Core, “does pretty well.”

What they’re saying: Allison expects more crypto games to roll out on the Epic Games Store this year and into early 2024, “and then we’ll really know” what the scene’s future will be.

Be smart: Crypto games have primarily emerged from new game developers and publishers (with some traditional game dev star power joining the ride) but have drawn deep suspicion from many traditional gamers and industry players.

• The promise of crypto games is that they contain digital assets, in the form of non-fungible tokens (NFTs) that players can purchase, own and sell, ostensibly allowing users to profit from playing.
• But skeptics say many of the games in the scene are scams and simply not fun or interesting to play.
• Steam, the leading PC gaming store run by Valve, barred crypto games in late 2021. Valve co-founder Gabe Newell later told Eurogamer the scene around them was “sketchy” and rife with fraud.

Yes, but: Epic founder Tim Sweeney, who presents his shop as a needed rebellion against standard online marketplaces, says there’s another way of looking at this.

• “Let's just be honest about what was really happening there. The other stores aren't blocking crypto games because they think ‘crypto’ equals ‘bad,'” Sweeney said of marketplaces like Steam. Meanwhile, he maintained other marketplaces still “distribute all kinds of bad stuff.”
• “They just want to collect their 30% fees and they're blocking everybody who doesn't go along with it.”

Between the lines: Epic is still keeping a safe distance from most financial aspects of its store’s blockchain games.

• Crypto games’ publishers are responsible for transactions, customer service and dealing with refunds and fraud, Allison says.
• But Epic’s trust and safety team is watching, he says: “If there's any bad behavior, we are going to be very swift to shut that down.”

As it opens up to self-publishers, the Epic Games Store will not allow pornographic video games, one of the store’s few content prohibitions alongside hateful content and fraudulent games.

Why it matters: The ban on adult content, common for many major online gaming storefronts, is another point of distinction between Epic’s marketplace and Valve’s Steam service, which allows some types of sexual games and sees them chart well.

What they’re saying: “This isn't Epic moral preaching here,” Epic CEO Sweeney tells Axios.

• “Where there's lawful porn, if adults want to engage with it, that's their right,” he said. “But we're building an ecosystem that tries to convey a set of values about the content it hosts. It would be very hard to be a porn company as we're trying to be the things that are really hardcore to our business model.”
• Epic also didn’t want to have to sort through the legalities of different types of adult content, Sweeney says.
• “I've always thought that porn businesses should be separate businesses from mainstream businesses because they require a different philosophy and ethic than a typical mainstream company.”

Be smart: During the high-profile Epic vs. Apple trial last year, Apple’s lawyers challenged Epic executives over the risque content sold on the independent gaming marketplace itch.io, which is among the non-game apps offered through the Epic Games Store.

• “We make the distinction between apps we distribute,” Sweeney says, noting that even Apple distributes browsers that can be used to view adult content. “You really have to distinguish apps that are browsing open bases of content from games.”
• Regarding Itch, which has been a haven for indie game makers, Allison praises the “good in the world that Itch does for small developers."

This year’s Electronics Entertainment Expo (E3) will be a mix of the familiar and strange for onlookers and attendees of what used to be the industry’s biggest promotional event of the year.

The big picture: 2023’s show will be the first in-person E3 since 2019, as the show returns from a COVID-induced hiatus and amid questions about its continued relevance.

Driving the news: The show’s digital programming will launch on Sunday, June 11, with the in-person portion run as a combined set of events, one for the industry and media, the other for the public.

• Organizer ReedPop announced last week that two familiar online showcases, the PC Gaming Show and Future Games Show, would kick off the event’s digital event. On the same day, Microsoft will hold its Xbox event, another E3 staple.
• The show floor at the Los Angeles Convention Center will then open from Tuesday, June 13, to Thursday, June 15, for industry and the media. Thursday and Friday will be open for gamers.

Between the lines: To woo exhibitors, organizers are offering cheaper floor space for booths.

• One unusual thing: To help attract industry and media attendees and keep them from wandering off-site to nearby meeting spots, organizers are also building a bar in the convention center.

The intrigue: E3 buzz of late has involved who is or isn’t attending.

• Nintendo, previously one of the biggest exhibitors, is skipping. The show lost Sony PlayStation as an exhibitor years prior.
• Most big-budget publishers have yet to confirm their attendance, though Ubisoft has said it’ll be there and organizers tell Axios more are signed on.

👎 Sony still dislikes Microsoft's plans for buying Activision Blizzard. Microsoft's "current offer" to keep Call of Duty available on PlayStation for the next 10 years "will irreparably harm competition and innovation in the industry," a PlayStation rep tells Axios. Microsoft had publicly pledged the deal offered parity.

• Sony didn't detail its problems with the offer and said it was Microsoft that requested redactions of the deal's terms in a public filing by U.K. regulators last week.

💰 Roblox had $150 million, or 5% of its $3 billion in cash and securities, in the recently imploded Silicon Valley Bank, the company said in a financial disclosure. But it expects “this situation will have no impact on the day-to-day operations.”

🎮 Warner Bros. Games has delayed its upcoming Suicide Squad: Kill the Justice League game, Bloomberg reports. No official comment from the publisher.

😲 Steam’s most recent Next Fest showcase of demos for upcoming games drew 8.7 million users. The most wishlisted demo from the event was for Dark and Darker, a game that has been mired in drama in recent weeks.

🤔 The Pokémon Company is hiring for an experienced business development executive who has, among other qualities, “deep knowledge and understanding of Web 3, including blockchain technologies and NFT, and/or metaverse,” VGC reports.

🍄 An elusive mushroom in Super Mario 64 has finally been grabbed by an enterprising player, 27 years after the game’s release, Kotaku reports.

Last night’s finale for HBO's "The Last of Us" ended with a faithful re-creation of the original PlayStation game’s controversial final moment.

• But the show’s creators had considered, then abandoned, a minor tweak. To avoid spoilers, you’ll have to read about it over at GQ.

The nine-episode series was a massive hit for HBO, drawing 8.1 million viewers for the series’ penultimate episode (no numbers yet for the finale).

• There will be a second season, covering a portion of 2020’s The Last of Us Pt II. The adaptation of the series' second game will stretch into the season beyond, the show’s lead creators tell GQ.

What’s next: The next big PlayStation game to see a live-action adaptation will likely be Gran Turismo. A movie tied to the racing game is set for release this summer.