If that's the case, then you have to 1) reduce requirements on the payment processors to do due diligence and/or 2) push handling of risks associated with payments elsewhere.

Certain types of transactions come with different types of risk... one might reasonably assume that X-rated games fall into the "frequently fraudulent" category

I don’t think they should ban anything that not actually illegal in the first place. But ya if they’re going to “try to protect the kids” at least go for the obvious issues. Then again they don’t actually care about the kids haha.

This is classic "whataboutism". "What about guns or violence?"

Maybe they will next, maybe not. What does that have to do with them taking this first step? We have to evaluate the merit of this action, on its own.

Personally, I think that opening Steam's "New and Upcoming" and seeing nothing but low-quality porn games is bad. Bad for steam, bad for gamers, and bad for children.

(you included a double link)

and yes the censorship is slowly showing its effects:

https://www.rockpapershotgun.com/valve-appear-to-be-blocking...

https://www.gamespot.com/articles/steam-is-no-longer-allowin...

https://www.eurogamer.net/queer-developers-speak-out-as-adul...

Seems overly protective, and possibly a bit ridiculous depending on your sensibilities, if thought through.

By similar logic supermarkets should not carry alcohol or tobacco, theaters cannot show 18+ movies (even non-explicit ones), and entire parts of some cities need to be redone because of their red-light districts, because there are some at central locations a kid could reasonably stumble into.

I think just restricting access to this stuff, being discreet about it, and maybe limiting advertisement, is enough. I've lived somewhere with a pretty plainly visible red-light district close to the central train station, yet most people don't even realize it is there. I'd hope something similar could be accomplished for Steam as well.

Finally, at the end of the day parents gotta parent.

I can buy all manner of smut, boner pills, and dildos from Amazon.

Hot take, but parents should, y'know, parent. Steam offers parental controls which can disable the store entirely, and have a whitelist for which games can be played along with other features.

What is your justification for this position? How does this not reduce to "steam shouldn't sell games that aren't fit for toddlers"?

Hot take but adults have the inviolable right to get adult content, whether it appeals to you or not