Starfield, Mods, and Derivative Works - an In-Depth Look
With the upcoming release of Starfield, developer Bethesda has advertised that its game will have “full mod support,” even claiming it will be a modder’s “paradise.” But what exactly are mods? What sort of legal issues do they raise? And how can gaming companies approach the unique legal issues they entail without alienating their fan community?
What are Mods?
In gaming, “mods” refer to fan-made modifications to proprietary game code. They typically are downloaded and installed or run alongside the game, usually requiring the “base” game to function. Mods range from minor, specific bug-fixes to massive content packs filled with brand new mechanics, maps, characters, features, visuals, audio, and brand-new assets.
Many developers are outright hostile to fan-made mods, as we’ll explain below. However, other game developers like Bethesda, Valve, and Mojang publicly embrace the modding community, releasing official modding tools or even hosting dedicated online communities to encourage their use (see, e.g., Bethesda’s Creation Kit Wiki, r/Skyrim Guide, AFK Mods, Nexus Mods, Steam Workshop, etc.). These modding tools usually include their own contractual agreements as well.
Mods can provide many benefits. For developers, a robust modding community can provide an ocean of free content, bug fixes, and dedicated community engagement long after the game’s release. For example, Bethesda’s Skyrim, which launched in 2011, has roughly 13,000 mods and nearly 5 billion individual mod downloads on the Nexus platform, with more mods being added to this day. For modders, modding is not only a creative outlet and a way to meaningfully contribute to a game they love, but also sometimes a viable business. Some modders monetize their work directly or through donations, and it’s increasingly common for modders to leverage modding as their pathway into a career in professional game development.
However, mods are not without risk. For instance, fans might distribute mods that are inappropriate, damaging to the game or studio brand (such as by enabling players to cheat), or that overshadow the developer’s own work. Meanwhile, modders face constant legal uncertainty around their work, as we’ll explain below.
Why are Mods Legally Tricky?
Since mods are built by modifying existing copyrighted game code, they generally constitute derivative works under US Copyright law, similar to fan art, remixes, etc. This means two things:
The original IP holder can typically remove them at any time.
Unauthorized derivative works violate the original copyright holder’s rights, and thus constitute copyright infringement. In some cases, a mod’s use of the original material might be excusable under the legal theory of Fair Use. However, this can be difficult to prove: as we wrote about previously, recent precedent from the Supreme Court makes it harder for artists to claim that a work is “transformative” Fair Use when it serves the same purpose as the underlying work (i.e., the original and the mod are usually both video games created for entertainment purposes).
Many game companies are generally permissive and don’t enforce against mods or other derivative fan works, even if they are infringing. This may be because they believe that these works help their business, because there are too many derivative works to effectively enforce against, or because legal action against fans presents a significant PR risk. Regardless, anyone who creates a mod does so under the constant threat that a copyright holder will swoop in and shut them down.
Unauthorized derivative works generally cannot receive copyright protection.
Under 17 U.S.C. § 103(a), copyright protection for derivative works “does not extend to any part of the work in which [the original] material has been used unlawfully.” This means that many mods are largely unprotected against other modders, who could copy the initial mod without the initial modder’s permission. There might be some rare cases where a modder could protect some wholly original content they created that wasn’t derived from the copyrighted source material. But generally speaking, modders have very limited legal protections.
These two facts, taken together, present an inhospitable environment for the modding community. But does it have to be this way?
How Do Most Developers Approach Mods?
There’s no one-size-fits-all approach for game developers when it comes to mods. The best path forward depends on everything from the type of experience the developer is trying to create with their games to the developer’s preferred monetization strategy. Most companies take an “arms-length” approach to mods, which means that all mods are technically unauthorized, and the developer reserves the right to enforce against any mod or derivative work it doesn’t like. Developers that have taken a comparatively hard line against mods include Nintendo, which took down a fan-made Metroid II remake, and FromSoftware, which made news for “softbanning” Dark Souls 2 mod users on PC.
On one hand, by maintaining the freedom to object to any or all mods, developers don’t have to worry about being held responsible for any inappropriate mods, and don’t have to worry as much about competing with mods in the marketplace. On the other hand, this approach is likely to stifle the creation of high-quality mods, and often results in a negative perspective of the developer by fans.
Over time, Developers who adopted the “arms-length” approach have learned to soften their stance without sacrificing much control by putting out a policy statement that details the types of mods derivative works that they will permit. These policies typically stop short of declaring mods to be “lawful,” meaning that the mods would not necessarily be eligible for copyright protection, but they do at least provide some comfort that the developer will not seek to take certain works down. For example, EA has generally permissive guidelines for The Sims that even allow modders to make money from their projects from donations so long as the mods themselves are not used commercially.
A policy statement is not a legally binding document, so it does not need to be actively accepted by players. However, it could have a legal effect in that a player may successfully argue that it creates an implied license, or at the very least gives rise to an argument under the equitable principle of promissory estoppel. If you are a game developer looking to adopt a policy like this, you should draft the language extremely carefully to preserve as much control as possible while not scaring off your fans.
What if I Want to Promote Mods?
In contrast to the arms-length developers, developers like Bethesda want to appeal to modders specifically. Companies that embrace modding include language in their Terms of Service or other legal documentation that explicitly grant modders limited IP rights to protect their work against copying by other modders. The catch is that, in addition to adhering to the developer’s content guidelines, modders also must grant a broad license back to the developer to use that new work.
Kid’s platform Roblox has adopted this approach to massive financial success, leading to over $1.1 billion in combined revenue in just 2021 and 2022. In Roblox’s Creator’s Terms, Roblox “Creators” explicitly maintain “all copyrights” in their derivative works, but grant Roblox a “perpetual, worldwide, non-exclusive, royalty-free” license back to use those works.
If done clearly and correctly, authorizing users to make and monetize their derivative works offers a substantial “carrot” to modders, giving them peace of mind against a developer takedown as well as the ability to enforce their copyright against subsequent copiers. Meanwhile, this approach shields the developer of the base game from liability, since under the terms the developer only becomes a non-exclusive licensee of the derivative work (as opposed to its owner). Even better, the developer can still retain a “stick” of revoking the license and pursuing a takedown if a modder breaks the contractual terms.
The problem? This approach is hard to pull off well, for the following reasons:
First, the developer takes on the responsibility (both practically and potentially legally) for the modders and the mods they create. If the developer hosts a platform for publishing mods, they will also be responsible for resolving any disputes between modders, including copyright disputes. Given that new laws like the European Digital Services Act, California’s Age-Appropriate Design Code Act and proposed laws like KOSA impose additional moderation obligations on content platforms, this is only going to get harder in the future.
Second, in situations where a developer allows fans to monetize their mods, there has been PR blowback over the developer attempting to take a cut of the profits. For example: in 2015, Bethesda and Valve allowed modders to charge for their creations on the Steam marketplace, but pulled the feature after a few days in response to major fan blowback. Skyrim players were accustomed to mods being free and believed that Bethesda was trying to unfairly profit from fan labor. Bethesda still curates a platform for mods today, but all mods on this store are free.
Third, writing an effective Terms of Service document that doesn’t alienate fans is hard. Contractually granting your users a right to make and legally profit from derivate works based off your IP is actually extremely generous of a copyright holder, with or without a license back. Still, if you are unclear about what is going on, players won’t see it as such. Fans hate draconian, non-negotiable language in Terms of Service documents, so there’s a real public perception issue with this approach. There might also be an enforceability issue in some cases, since not everyone who creates a derivative work has necessarily agreed to the developer’s terms.
For an example of a company that faced some controversy over this issue, see the Pokémon Company (TPC), which included this license in their Legal Notice:
Fans jumped on this language and how it appeared to allow TPC to use a fan’s music in its own advertising without permission. In addition to being worded in complex legalese, this provision stands out as particularly odd because it is seemingly contradicted by TPC’s own Terms of Use, which flatly prohibits users from “modif[ying], or create[ing] derivative works based on, the content” altogether. It’s not clear here whether (a) all derivative works are unauthorized, unlawful, and therefore not copyright protectable; OR (b) derivative works ARE authorized and therefore lawful, and the resulting copyright in those works is subject to a non-exclusive license back to TPC. The lack of clarity here is especially frustrating because it speaks to whether or not the creator of a derivative work has any rights vis a vis third parties. Companies should exercise caution to avoid issues like this when drafting.
Conclusion
When it comes to dealing with your modding community, there is no one-size-fits-all approach, and any strategy requires careful consideration. Any policy document or agreement concerning modding or other fan-created content will need specific and carefully crafted wording to ensure it accomplishes your goals and communicates clearly to the modding community. No matter which way you decide to go, it pays to be clear and transparent in your drafting.