I'm making a game which similar to another game on Steam. My game is more sophisticated, it's not a simple clone. Lets say that the original game is named "Nice". My game will be named "Nicer". I would like to have a name which similar to the original game, because it gives me instant recognition. AFAIK, the original game is not a registered brand/trademark. Is it legal to make a similar game with a similar name? I know that I can make a similar game, but I'm not sure about a similar name. The worst thing that could happen to me is that my game is removed from Steam because of some kind of legal action on the part of the original developer.

In some countries, trademarks don't have to be registered for legal action to be brought. You're clearly likely to be at risk of infringing here as it's a very similar name for a similar product in the same industry. The worst case is not that your game is removed from Steam, the worst case is that you're successfully sued for damages relating to their branding and lost income, and maybe even jail if you can't pay up, depending on jurisdiction. So I'd tread very carefully here.

Wow, that's a huge risk. It seems I must change that name. Thanks!