Smite is like LoL, yes? You have a game that has matches which last 20-30 minutes? Then back to the lobby server. It's a very different structure to an MMORPG like FFXIV, RIFT, L2, WoW, and ESO. While the change may force a change in login credentials (I'll expand on this a bit later) I very much doubt that they will run their own update server. The game will almost certainly still update the way it does now, the only difference is (assuming they change accounts login like they did with ESO) that when you launch the launcher your account will logged in. You will still have to hit the green play button.
Smite has been on Steam forever and it was likely set up with all this in place. This is moving from one system to another - like ESO. And ESO 18+ months after the move shows no sign of ever having the kinks worked out of the system.
Now ESO did force this change in login. Which was problematic considering everyone had ESO/ZOS accounts with account names that weren't their steam names, to make matters worse the way ESO updates doesn't require your account credentials. (ESO doesn't update via Steam servers it updates when you launch the client - this is what I expect for FFXIV for logistical reasons.) So even though your Steam login became your ESO login you still had to type your username and password into the client when it launched. Now all this automatic login might (if implemented and there is no guarantee they are) might work better in FFXIV because they already have a similar system in place for PS4 users. There your login credentials don't technically change but your account is linked to your PS4 login. So the game logs you in as PS4 login, but if you need to use the website you login via your SE credentials.
The biggest change will be this:
You -----------------------FFXIV will become You ---------------- Steam Auth ----------------- FFXIV
This will not be a once off check with the servers like single player steam games are. This connection needs to constantly be maintained. This is how ESO works and there is no reason to expect the infrastructure will be any different for FFXIV. (For those wondering Steam Chat features currently run in parallel to this, meaning a disruption to the chat servers for steam should not be an issue.)
