So to recap: it's illegal, but you'll probably be fine as long as it doesn't become popular. So it's a question of morality: do you care that it's illegal or not? (knowing that nothing will happen probably). @Sharm Actually not really. If you made a mega-man, Capcom could theoretically sue you for copyright infringement and ask the court to either: Shut down and destroy your game. Claim your game as theirs. Take your revenues from your game. To charge you punitive fees (rarely happens, usually have to prove bad faith). That's an extreme case since Capcom would have to take you to court, and in reality it costs so much money and time that companies only sue for big stuff, not little fan games. What you describe for fan art copyrights is more a kind to interpretation of an art piece. Example: if I record a piano song which company A holds the copyright to, I still have to get company's A permission. If I get the permission, my recording's copyright will belong to me, but the song's copyright still belong to company A. Well, at least that's how the copyright laws work in most western countries.