The most immediate argument in reply to the above paragraph will likely be that copyright is essential, that it is the engine to free expression and culture, that without it developers will become the literal embodiment of the myth. First, it is important to understand that there is already a growing body of artists making money without relying on copyright for exclusivity in selling their work, and a large body of developers doing much the same, even as they're being paid a regular wage for releasing software free of charge and free of restrictions. Even more important to understand is that developers already operate in an environment that largely ignores copyright law. On the one hand we talk of the evils of software piracy, by definition an act that doesn't pay dues to copyright law as it currently exists, whilst the other we talk about the importance of copyright in maintaining profitability despite apparently being surrounded by those who don't abide by copyright and its conditions.
This is particularly true when you look at the modding community in video games. Modding communities rely heavily on copyright infringement of all kinds. Some mainly add nothing but new level designs that attempt to tell or convey a particular story, but add nothing else – all the textures, models and sounds are the same as the game they were borrowed from, simply rearranged in a new order intended to convey a different meaning. By definition much of this adaptation is copyright infringement – some of it may qualify as transformative (and thus fair use), a lot of it would likely qualify as derivative under law1, yet is has been legitimised in an area that still significantly treats piracy as contentious bordering on morally wrong. What precisely would be lost by the gaming industry by putting much of its work under a CC-BY-NC licence for example, except the legal grey area that exists for much of the modding community? If ever there was a case for the importance of the ability to reuse and remix cultural works, this would be that case. The modding community is an area in itself worth studying in how people reuse and appropriate already existing works, adapting them to new uses and new meanings, yet it is also an area that sits on a knife edge of legality.
Of course, the argument here would be that CC-BY-NC licenses that would legitimise much of the modding activity taking place would undermine the ability for a game developer to earn money, but when we're talking about CC licenses, we're not discussing code (that would be the realm of the GPL, Apache and BSD licenses), only assets. What harm is there in allowing the use at least of a generic human model or the texture of a brick wall? Many games already reuse assets from previous titles to save money and development time. One of the most infamous negative examples pounced on by the gaming press was Modern Warfare 3, but what of the generic crates, barrels and wooden planks of Half-Life 2 and its successors?
It is not like this is without precedent. Lugaru was in the first Humble Indie Bundle (itself created by the same group of developers, Wolfire). After the the bundle ended, the games source code was released, with the assets apparently allowed to be used for non-commercial purposes (though no clear licence like CC-BY-NC was ever attached). The developers publicly stated to Ars Technica:
Jeffery Rosen, the cofounder of Wolfire Games, ticked off the lessons learned from the first bundle. "We learned that piracy is inevitable—even when you let people literally give a penny to charity for DRM-free games, large percentages of people will still pirate the bundle," he said. "We learned that open source software is still commercially viable. After open sourcing a number of games in the bundle, none of our sales were negatively affected."
iD Software has famously long had a policy of open sourcing its engines, which can be said to have had no negative affect on them at all. In almost every way it has been positive, allowing older games to be ported to newer platforms, allowing mods to become more independent of their associated games, and has even fed back into advantages for iD itself:
It went very smoothly. The prBoom codebase that I based it on already compiled for OS X, so there wasn’t much grunt work, and I had all the device specific IO code that I developed for Wolfenstein Classic. Being able to take advantage of the GPL code that other people have maintained and improved over the years has been very satisfying for me. I always argued that we got worthwhile intangible benefits from my policy of releasing the source code to the older games, but with Wolfenstein Classic and DOOM Classic I can now point to significant amounts of labor that I was personally saved. In fact, the products probably never would have existed at all if my only option was to work from the original “dusty deck” source code for the games. If we were even able to find the original code at all. Hooray for open source!
Copyright as currently used by the games industry creates a lot of uncertainty for mod makers, who can be recognised as doing nothing but providing benefit to developers whose games gain the kind of traction and popularity for unpaid volunteers to create new content for them. This is without even going into the potential network effects that may happen due to an army of people actively training themselves in your proprietary tools, along with the influx of fresh talent and ideas that regularly gets snapped up. The example of how Team Fortress went from being a Quake mod to Half-Life to a major Valve title that itself has spawned a whole network of creators working on hats, weapons and maps that has been tapped into (not to mention the money it has made).
But what of the console market? For them, Apple like practices are the norm – charging third party developers for the privilege to create something that will make you actually want to buy their hardware2, unless you actually wanted an expensive door stop, the inability for anyone to innovate without their say so and the inability for developers to offer free content to existing customers, even when that content is free on other platforms3. Copyright (along side patent law) is plainly used as a bludgeon to limit innovation and enforce differentiation to protect rent seeking behaviour, something described by Cory Doctorow's speech on the war on general computation. Here, playing a game made and freely shared on your Xbox 360 or Wii is illegal without Nintendo or Microsoft's permission, groups who had no involvement in the development of the game and who sells you a device that would ordinarily be perfectly capable of playing it. Isn't that the point of buying a console – to play games?
Copyright is important not purely because of its assumed requirement in making creation a profitable venture, it's important because of its limitations and the grey areas it creates. As PC games have come to expect modding is good and adds value, console gamers are told it's bad and that they needs the trifecta to protect gamers from themselves. As some modders and remixers are sued, others are hired and hailed. As abandonware and titles long lost to defunct developers and forgotten contracts are revived from the ashes by emulators, so too gather dark clouds.
Parts of ScummVM, which is basically a collection of game engines, were developed based on original source code provided by the holders of intellectual property rights for certain engines, but much of it came from reverse engineering—which may be illegal under certain circumstances. The ScummVM team was confident that their reverse engineering techniques were legal, but proving this in court would be both expensive and time-consuming. So they sought settlement.
The dispute was resolved in May 2009, and an announcement followed in June. The settlement involved Mistic Software "paying all legal fees and making a donation to the Free Software Foundation as a sign of good will, without acknowledging copyright infringement." All remaining unsold copies of the games were to be destroyed at a specified (but unannounced) date.
We have to remember that copyright restricts other things apart from commercial software pirates, and that many of those things do not deserve the treatment they get or the uncertainty they have to deal with. Copyright is important, but not always for the reasons we think.
1. For an explanation of the difference and the subsequent grey area this may create, see these articles:
Wikipedia: Derivative Work
Color This Area of the Law Gray
Making Sense of Derivative Works, Transformative Uses and Fair Use
2. "And as part of the deal, the game must also meet with all of the strict quality standards and guidelines as set by the manufacturer for it to be approved and released. The exact licensing fee varies based on the manufacturer, as well as any deals they may give a publisher, but it can generally be anywhere from $3 to $10 per unit." The Economics of Game Publishing - Whether there is a more accurate or up to date figure, I cannot say.
3. "On the consoles, they want us to charge money for them, because that’s in their model, and our model is very much more to grow the community by giving out free updates. That’s harder for us." Interview with Gabe Newell, 2008