I thought a few times about how would the world work without any copyright law and while some people would be worse off (and not just the stockholders of major publishers), I believe that it would still be better for video games (and perhaps art in general) as a whole.
I know that “no copyright” is a hard sell, especially for people that make their living of producing art. But even if you are convinced that we need such a law, at least consider the option of shortening it. Currently, copyright protection lasts for author’s lifetime plus 70 years (1). That is ridiculously long compared to the 20 years (or shorter, if you don’t pay the fees) that patents get (2).
These arguments for practical purposes boil down to more money to the copyright owner. That is a good argument, because the owner either did the work or legally purchased the copyright, so it is fair that only they profit from it. And while you could successfully argue that illegal copies do not equal significant loss in sales, I don’t expect that to hold up in a world where copying for free is mainstream (easy to find, without risk and deemed morally acceptable).
You can also say that the author should have the right to control how their work is spread but that is on the same level as saying that the creativity of people should not be constrained. It is a matter of opinion.
Copyright is automatically granted to any work that is published, so in order to not infringe on any existing copyrighted work, you must create something “original”. So what is considered original? Well…
"Works are original when they are independently created by a human author and have a minimal degree of creativity. Independent creation simply means that you create it yourself, without copying. The Supreme Court has said that, to be creative, a work must have a “spark” and “modicum” of creativity." (1)
Yeah, I don’t know what to imagine under “spark” or “modicum” of creativity either. On top of that it now relies on the definition of “creativity”. I skimmed quickly through the law as written here (3), but I couldn’t find any definition for it, except this one which seems to apply only to designs of ships:
"A design is “original” if it is the result of the designer’s creative endeavor that provides a distinguishable variation over prior work pertaining to similar articles which is more than merely trivial and has not been copied from another source." (4)
That is better, though I have to ask what change is trivial. Mickey Mouse with a mustache would be distinguishable but would it also be trivial? What if the mustache was very detailed with little ships sailing in it?
Here they say that the work has to be independently created (5), which is not just hard to prove but also disprove. So basically, what is original depends on what judge you get and how good your lawyers are.
A century or two in the past it wasn’t so bad, but nowadays there are not only physical copies but digital ones too. Copying digital media is very easy and dirt cheap, so to enforce the law you would have to force the owner of every data hosting server to check every file uploaded against an enormous database of copyrighted material. Given how much data is uploaded every day, even with optimizations like checking every unique file only once, it is not technically feasible and would waste a lot of resources.
It is not surprising that law enforcement does not bother to go after every copyright infringement they see but only react when the copyright holder decides to sue.
Even though making copies without permission is illegal, there is a huge amount of people, who do it every day. It is done publicly and many people think they are not doing anything wrong. The copyright owners know about this and most of the time they decide to not do anything about it. The main reasons for this are:
Even the lawmakers decided to ignore copyright is some cases by adding exceptions for Fair Use (6).
If there were no exceptions in the copyright law, preservation of any kind of art could be stopped dead in its tracks by the copyright owner just saying no. Even when you want to buy a permission from the owner, they could just not give it to you. Or perhaps the owner could not be tracked down at all, making preservation of the art legally impossible.
Fortunately, they are exceptions in the law for libraries and archives (6). However, video game preservation is harder due to technical difficulties. In case of books, music, art and movies you just need to purchase a copy of the final product and archive it. Video games also need the right environment to be able to run. So, when you archive the installation files, they are useless unless you have the supported operating system which will need supported drivers for hardware. On top of that, many games operate on server-client basis, so the copy you can purchase in a store is only half of the game.
Again, we are lucky that these issues are solvable thanks to emulation and reverse engineering (although having access to the source code would make it many times easier). The problem is that there are not many archives which are working on preserving video games and companies owning the copyright are reluctant to cooperate with them (7). If the law does not force them to give in to demands from government approved archivists, they could make their server side software impossible to preserve. Finally, there will never be enough archives to catch everything, there are obscure video games that are preserved only thanks to illegal copying.
Because pretty much everyone used copyrighted material somewhere without the proper license, we can be all sued for it. The company that used to ignore it may change its mind, you may make a mistake - choosing music that is in public domain but using a recording of it that is not, or you might think what you do is Fair Use until you end up in a court where they tell you it isn’t (8).
Even when you make every precaution you can, someone can still try to sue you and win. Complete originality is rare, we take a lot of inspiration from existing things and you can find lot of similarities, if you look for them hard enough.
So, how would the world of video games look like, if the copyright law was no more? Nobody knows for sure, but based on my knowledge and experience I make these predictions.
Because people will share video game files openly and much more often, even the most niche games have a high chance of being preserved for the future generations.
The sharing won’t be limited to games themselves either. People will extract assets from them and make them easily available. Those can be then downloaded by anyone, modified and reused in their own games. Therefore game development will become easier and thus cheaper.
Most of newly made games will probably be mods or overhauls of an existing game, but free access to existing highly detailed models and textures means more good looking games in general.
Because intellectual properties are no longer protected by copyright, fans can adapt whatever they want and however they want. Those that have been mishandled could now be restored to their former state, evolve further from there and branch whenever a group of fans is not happy with where it is heading.
Also developers will compete more, because it is no longer enough to have access to a popular franchise, they have to make the best adaptation of it.
When the free sharing of video games becomes publicly accepted, I suspect that significantly less people will buy their games. This will cause many publishers and developers to go out of business. There will be significantly less professional game developers and a lot of those that remain will be payed by fans who like their work and through fund raising. To some extent this will be compensated by more people making games for free in their spare time, because it is now easier to do. The graphical improvements in games may get slower too, because they require significant development effort and therefore a lot of money.
The companies that remain will try to survive by doubling down on DRM software in attempt to restrict unlicensed copies of their games. So far these protections have always been cracked but they may last long enough to be viable.
The focus on online games will continue, because that requires servers which run server side part of the game. As long as the server software is kept secret, the company can profit from microtransactions or subscriptions. It could work even after a leak, because running servers cost money regardless of who does it.
Similarly, cloud gaming could make a come back with games that are playable only through this service, the game files kept in secret. It could even be possible to make a closed console with preinstalled games that is somehow protected against tampering.
These tactics bring a risk of companies killing a game by never releasing its files, but all it takes is one leak and the files will be copied all over the internet. In the worst case scenario people can recreate a lost game based on existing footage.
Most of these sources apply to USA but a lot of countries have the same or very similar law.