Valve's announcement last week that a payment system would be implemented for mods on its popular Steam gaming service didn't exactly come out of the blue.

In 2004, the company conducted a survey on Steam concerning paid mods. One of Valve's longest running game series, Counter Strike, started its life as a Half Life mod.

Then last May, Epic announced that the next iteration of Unreal Tournament would be a free base game with user-generated content like mods and maps that would be sold or given away for free in a dedicated marketplace.

Once Unreal Tournament made its announcement to great reception, Valve clearly saw an opportunity to move on something that it had been considering for a long time.

When the company announced this initiative, I thought that it could be a good thing. First and foremost, the added source of revenue could encourage developers and publishers to have modding tools baked into their games. Huge publishers such as EA and Ubisoft might be tempted to open up their games to the creative tinkering of a proven gaming community.

It would also allow modders, who work painstakingly for hours, days and sometimes months on their mods, to receive compensation.

Sure there were some foreseeable problems – mods containing unlicensed proprietary content charging users as well as some scam mods – but these are the types of things that would work themselves out through curation.

But the death blow – Valve backtracked this week – turned out to be the company's inability to sway the gaming community. Despite some sparse support for this change in policy, the overall sentiment was opposed to the move.

Modding is seen as a free community for sharing ideas. Sure modders deserve to be paid for their work (should they choose to ask for compensation) but that's what donation buttons are for. This is a feature that has long been demanded of Steam Workshop and many modders already link to a donate button that allows backers to pay as much as they want.

The biggest problem the modding community seemed to have with this move is the huge chunk of the revenue that was being taken by Valve and the game publishers, 75 percent of total sales were split between the two. Modders themselves were to receive only 25 percent of the revenue that they were creating.

While this may seem appropriate to small mods that take a few minutes to complete, for others that consist of complete system overhauls and conversion mods, which are akin to releasing a completely new game, this may seem like an unfit split.

Moreover, the gaming community is very conscious to whom they're giving their money to, and to them this seemed like a cash grab.

In a last ditch effort to change public perception of paid mods, Gabe Newell, one of the few people who seem to be immune to vilification online, went on Reddit to try to assuage some of the fears.

Acknowledging that mistakes were made in rolling out the program and approaching the community about it, he pointed out some of the benefits to paid mods.

Failing to convince anyone however, Valve announced Monday, just four days after the initial launch of paid mods, that it would pull the program from Steam and refunding anyone who had already paid for a mod.

"We think this made us miss the mark pretty badly, even though we believe there's a useful feature somewhere here," the company said in a blog post.