Oh my god, Fallout 3 has removed Games For Windows Live
Warning: the update breaks mods which need FOSE
After 13 years, Fallout 3 has finally removed Microsoft's reviled (and broken) Games For Windows Live service from the Steam release. Hooray! FO3 is still busted because Bethesda haven't updated the game to run happily on modern Windows, but I'll take any opportunity to dance on GFWL's grave. However, avoid the update if you play FO3 with lots of mods.
The Steam announcement says plain and simple that Fallout 3 GotY "no longer requires Games for Windows Live" and "no longer installs Games for Windows Live dependencies". Yup, it seems they've stripped GFWL from the regular edition too, obvs. Bethesda started selling Fallout 3 without GFWL on GOG last year, so it's good to see Steam catch up.
GFWL has been dead for a while but the game still required it and would take a while trying to log in on startup. Unofficial tools have let players get around this before, but now it's just gone. If you already had FO3 installed on Steam, Bethesda suggest uninstalling and reinstalling to get it to play right. Might need to dig save files out the old GFWL folder too.
One big issue: you might want to avoid updating if you play FO3 modded. The update has broken the Fallout Script Extender (FOSE), a popular tool required by more-advanced mods. The nature of the script extender is such that yup, it'll naturally no longer work when the game is updated—this isn't a malicious action from Bethesda. FOSE's website notes, "I do not have a timeframe for when FOSE can be updated to this new version." If you rely on mods built with FOSE, avoid for now. If you already updated, try this workaround to undo it.
Removing GFWL from the non-GotY edition might also be a problem, considering the expansions were originally sold through GFWL. I do see someone on the Steam forums saying they can no longer access the DLC they bought. Hmm.
And yeah, Fallout 3 is still busted on modern versions of Windows. I'll point you to the ever-helpful PCGamingWiki for fixes and workarounds to many of the issues. A shame Bethesda didn't fix that while rummaging in the game's guts. It is curious that they're endlessly releasing new editions of Skyrim but have left this game be.
I've reached out to Bethesda with questions about accessing GFWL DLC, and if they plan to fix the longstanding problems with Windows. I'll let you know if I hear anything good back.
For younger readers, you lucky dears, I'll explain that Games For Windows Live was an artifact of the times when Microsoft expressing interest in PC gaming felt like an empty promise at best, and at worst a threat. GFWL was a Microsoft service games could use to add friend lists, messaging, achievements, DLC purchases, DRM, and such, tying them into Xbox accounts. While Valve's Steamworks can do all that now (and other stores have their own systems), at the time GFWL offered features Steam couldn't. So it was unfortunate that GFWL was a buggy faff and felt like Microsoft were trying to promote Xbox consoles more than help PC gaming. Didn't help that DLC was immensely unpopular at first, so DLC coming to PC hardly felt like a benefit. It was wanted by few yet slammed into so many games—even years after Steamworks had grown into a more-welcome alternative. And while some games eventually removed GFWL, too many still include this tech which died ages ago. Thankfully, Fallout 3 is no longer among them.
Fallout 3 is discounted on Steam right now, with the base game down to £2 and the GotY Edition down to £6. That GotY discount is available on GOG too.