Angry gamers have forced Valve to end a system that let people who make modifications or "mods" for games get paid for their work.
The paid-mod system was only switched on four days ago.
The game-maker had been heavily criticised on its own forums and in social media for the way the payment system was set up and being run.
Valve said it took the decision because of the "dump truck" of feedback it received from players and mod-makers.
The cancellation will involve Valve refunding any payments gamers made to buy mods.
"We've done this because it's clear we didn't understand exactly what we were doing," explained Valve in a blog posted to the forums of its online game service Steam.
Before Valve introduced the paid-for mod system, most mods available via Steam were free. The only way that creators of add-ons and extensions for games could get paid was to have their code included in official updates for Valve games.
Mods add all kinds of new content to games. Some just let people clothe characters in new outfits or use new weapons or mounts. The most ambitious mods add new levels, enemies and challenges to games.
Valve said it started the payment system in a bid to expand the ways it could reward people who create game content for players.
"Our main goals were to allow mod-makers the opportunity to work on their mods full-time if they wanted to, and to encourage developers to provide better support to their mod communities," said Valve.
However, it added, it had underestimated the difference between its own revenue-sharing model and the complexities involved in the wider modding world.
"It's obvious now that this case is different," it said. "We think this made us miss the mark pretty badly, even though we believe there's a useful feature somewhere here."
Game-maker Bethesda also released a statement about shutting down paid mods. One of its games, Skyrim, was the first on Steam to be put in to the paid-mod system.
"Even though we had the best intentions, the feedback has been clear - this is not a feature you want," it said. "Your support means everything to us, and we hear you."
Graham Smith from game news site Rock Paper Shotgun said Valve liked to experiment in public and adapt to the feedback it got but the response was so negative that it simply had to pull the system.
Mr Smith said the response was probably so strong because Skyrim already had a well-established modding community that was used to getting extras for free.
"I think it'll be interesting now whether we see paid mods re-introduced with one of Valve's own games or whether they'll find a third-party partner who is planning on launching something new," he said.
It might also look again at the way cash was split between modders, game makers and Valve, he said. With Skyrim mods, creators only got one-quarter of the cash paid for a mod.
"I think if this system is launched again, modders need to get a higher starting cut than 25%, in order to make players feel like they're doing a good thing when they buy a mod," he said. "Ideally, a planned pay-what-you-want system would help with that."