The Steam gaming platform will allow video games containing virtual reality porn and other controversial content, in an abrupt reversal of policy.
Valve, which owns the popular online video game store, came under fire recently after a video game billed as a "school shooting simulation" appeared on the platform.
Parents of school shooting victims objected to the Active Shooter game and an online petition received more than 200,000 signatures to have it removed.
Valve eventually pulled the game but says it now wants to avoid engaging in debates of how it should police its platform.
"The harsh reality of this space, that lies at the root of our dilemma, is that there is absolutely no way we can navigate it without making some of our players really mad," Valve's Erik Johnson said in a post to the Steam Store on Wednesday, 6 June.
"Valve shouldn't be the ones deciding this. If you're a player, we shouldn't be choosing for you what content you can or can't buy."
The Steam Store will instead only ban content that is illegal or "straight up trolling," in the hope that this approach will allow it to focus more on building tools for Steam that will allow its users to control the content they see.
The introduction of VR porn to Valve will make it the first major platform to host adult content in virtual reality.
Valve's decision to remove the Active Shooter game from its store is unlikely to be affected by the new policy, as the company referred to the game's creator as a "troll" at the time of its removal.
"The Steam Store is going to contain something that you hate, and don't think should exist," Mr Johnson added. "Unless you don't have any opinions, that's guaranteed to happen."
Valve's decision received mixed reactions, with the founder of the Facebook-owned Oculus VR, Palmer Luckey, commending the company on its laissez-faire approach.
"Bravo @steam_games!" Luckey said on Twitter. "This policy is going to be a huge boon for VR software, particularly adult content. Getting onto a platform with visibility and reliable payment processing is practically a pre-requisite for success in the games industry."
However, the policy decision has also been criticised by a number of video games bloggers, with popular games site Rock Paper Shotgun describing Mr Johnson's blog post as "jaw dropping."
The site noted: "Unfortunately this also means they'll likely be taking a similarly hands-off approach regarding wildly sexist, racist or homophobic content."
