Yeah, avoiding copyright infringement (at least in the US) usually requires that your derived work is transformative in some way. And in most games’ cases, simply playing the game and adding some commentary is enough to qualify. Basically, the argument is that you’re transforming the game from being something played to something watched. That the game was originally meant to be played, so the streamer is transforming it into something new by playing it in their own unique way and adding their own commentary about the game.

But for a visual novel, this all goes out the window. At best, the games are a Choose Your Own Adventure book. You make some small decisions to direct the game’s story, but the game is largely just something that you watch. You make those decisions, then you watch it play out until it’s time for another decision. So the added commentary by itself isn’t enough to transform the game into something new.

But all of this happened in Japan, and I have no idea what their copyright laws are like. I know part of their laws require rights holders to actively attempt to shut down infringement, or else they risk losing rights. That’s one of the big reasons Nintendo is so notorious for taking down emulation sites, because they risk losing the rights to their own IPs if they can’t prove that they’re actively defending them. That’s probably a large part of what started the original lawsuit.

The studios he offended are trying to make an example out of him. Reminds me of Nintendo suing Bowser for $10 Million.

Did a billion dollar company stole your gf buddy?