But so could text reviews. Spoilers. And Walkthroughs. GameFAQs anyone?

None of these show the entire game in detail as video from start to finish. Once youve seen it all what value remains in playing the game?

Perhaps spoilers etc diminish value too but not to the same extent.

I don't watch let's play with voice over though which means it affects the studio even more.

Personally I find most voice overs really annoying...

Let's play could be considered to lose profits for game studios.
As an example I recently watched a full longplay without commentary of bioshock infinite. I didn't think i had time to play it so instead just decided to watch a longplay.
This possibly directly impacted the studio as otherwise I might have gone out and bought it...

Food for thought...

Funnily, it's just the opposite with me. Ever since I saw a "Let's Play" on youtube some 2-3 years ago (yes, I'm not always the fastest adopter of new stuff, these probably exist for 10 years or longer already!), I have never bought a game that I heard about without looking on youtube whether there is a "Let's Play That Game" first.

For me, it's a great opportunity to see what the game is about and what it looks and feels like. No buying a pig in a poke.

That's one of the cases where I think that "Fan stuff" (I won't call it fan fiction since it really isn't that) can be beneficial to the owners of an IP. One could argue that it's lost revenue if I don't buy a game because I don't like the gameplay, but that is a rather shortsighted point of view. You don't want disgruntled customers that will cost you more than they paid for the title and who will create a huge PR nightmare and will thereafter never again buy a title from your studio.

You want happy customers that come back and that bring their friends.

Of course it gets dirty when people start to fight over the ad revenue, but that's a different story. All in all, I consider "Let's Play" something that one should generally allow (other than fan-fiction, which I think the original authors might allow in one or the other case, at their discretion, but it shouldn't be a "general" thing).

Thanks for all the additional replys, obviously its again way to much to commentate on all of it, but be sure I read all of it and got some new things I didn't think of before.

None of these show the entire game in detail as video from start to finish. Once youve seen it all what value remains in playing the game?

Watching someone play game != playing game. If I asked you to come over and watch me level a character to 100 in WoW without us communicating, would you do it? (or pick your favourite game you eigther have played or didn't play yet but want to).

To be a little more precice, there is so much more value to playing a game than just having it auto-pilot before your eyes - how you play it, how you control your character, having/showing/developing the skill needed to beat and/or master the game, the choices you make, the order in which you progress, how you design/progress your character, being able to set your own pace... some of those are subjective to certain types of games, but there is always something - there is a reason they say "Playing video games is more fun than watching other people play video games".

Heck, if seeing it one time, why do people play through games multiple times? I think I've literally played through every single game I liked more than one time.

Also, there is the other way around - at one time I came into touch with dead space and got fascinated by the setting, but were a little reluctant about it being a "in your face" type of horror game. I watched a small play/walkthrough (at least 30 minutes of ingame footage), and decided to buy it based on that. If there was no (moving) ingame material outside of trailes, I would not have bought it.

Case and point, I find it not convincing that having video footage online will harm the company. If anything, there is even evidence pointing in the opposite direction. CAN companies be hurt by people making a say review that consists of 50%, if not 100% of the game? Potentially yes, but I lack evidence to belive that it actually does.

Except by using somebody else IP you could devalue it by so much that it becomes worthless. Which makes it much worse than taking somebodies car because you can still give the car back and you probably wouldn't have affected its value.

After thinking much about it, I'm not really sold about this argument. (this is not only a response to your post, but also the other times it was brough up)

Ok, first of all, IF you damage an IP, thats absolutely a no-go.

But I do not belive that (small-scale) fan fiction can really hurt an IP. An IP is not a physical object where you can go in an take stabs at, rip stuff out, or poor nasty stuff over. The value of an IP purely lies in its perception amongs the consumers, and potentially financees.

So in order to hurt an IP, you must alter the perception of the target audience to the point where they go "Eh, I don't think I want to buy that new mario game from nintendo anymore - some jerk on the internet made a really terrible rendition on it, I quess that IP is dead for me" (a little bit exaggerated, but you get the idea).

And, to be totally honest. I don't see that happening in any shape or form from some inofficial fan-made work. The damage that comes from a bad game in an IP being released comes with the perception of "The developers of this IP screwed over, they surely won't make another good game after this".

Kind of reminds me of the current situation in World of Warcraft - people are really pissed of at the developers for being appearently being deceptive about released information, cutting content here and there, not even having enough relevant content to keep people entertained, and a general decrease in quality, effort and a focus towards casual gaming (lets not discuss those points here for the sake of the argument, I know some might be object of discussion for people who actively play WoW). Now, the WoW/Warcraft-franchise surely took damage from this, it already lost half its subscribers in just a few months. For most people, WoD is strictly the worst addon ever made, and many people are gone for good.

BUT, the point is - if I was to make this kind of WoW, call it "World of Wacraft 2", host my own servers, say even offer a free char trans for a matter of allowing people to play here - and say I made this addon even shittier than it already is, putting no effort whatsoever, but just putting "WoW" lore, characters etc.. whereever I can - do you honestly belive that it would have had the same effect, or even any effect on blizzards playerbase? Take aside that now there would have been a free WoW-alternative which could have made some player unsub for the time - granted, this is the kind of thing I'm not even supporting - just to make it clear, I am NOT for being able to just offer an active competition based on the same franchise for any currently sold game. But aside from that, people as I see it would have gone more on the lines of "WTF did this guy make a shitty game and call it World of Warcraft, what an insult to the name. I'm going back to the real game".

Kind of case and point, to stay on the example, is with WoW private servers. Blizzard actively takes those down when they get to big/relevant, and its obviously illegal. However, even though there is no fixed data on this, it appears that those servers actually gain blizzard more than they lose them. I've heard noumerous stories of people starting out on free, illegale private servers, then switching to actual paid WoW, not even though, but mostly because those private servers are buggy as hell, have lack of people, updates, content, you name it. Hell, I even personally recruited I belive 11-15 people from a private server (some close friends, some I only knew onlines), some of who would have never, ever touched WoW if they had to start while playing it.

I know, the problem with this is that it is extremely hard to pinpoint "facts" like this (is the existence of private servers in WoW actually pulling more potentially paying subscribers away, or are there more people that start to play payed WoW due to the "free" demo?), and thus hard to come to some sort of conclusion, or thinking even further laws/guidelines - but the point is, as far as I'm concerned with all the information that I have, Blizzard is not taking any damage eigther to their IP nor to their finances due to the (in case of this thread really extreme, corporate example) of illegal free servers with indirect competition (said servers are always 2-3 addons behind).

Ok, but another example to stay more on the topic of fan-fiction, there are three games that actually uses popular IPs from Nintendo, without Nintendo developing them: Hotel Mario, Link: The faces of evil and Zelda: The wand of gamelon. Those where all based on Nintendo working on developing a CD based console with Philips. Even though this failed, Nintendo still somehow reserved philips the rights to use their characters in some of their games - but thats appearently all the control that nintendo had. What came out of this where 3 truly horrible games, the zelda games especially being considered by far the worst of the series, if not some of the worst games ever made. True, Nintendo technically allowed Philips to use their characters - but the actual point is, do you honestly belive that those absolutely horrible Zelda games, made on some obscure console, without being "licenced" by nintendo, had any direct impact on the franchise? Almost any alleged Zelda player knows of them, even outside of that they are kind of infamous - now those would precicely fall into the category of "well known, horrible, (almost) without oversight of the original creater of the IP". I just fail to find evidence, nor belive, that Nintendo took any direct damage due to those games existing. Are you telling me that there are really supposed to be relevant amount of people going "yeeesh, those zelda games from god know who where horrible - now I'm less hyped for Majoras Mask than I was before"?

Or at this point, I'm kind of assuming I eigther misunderstood the argument, or there is some sort of cultural barrier - because from how I've been raised and where I grew up, the thought that someone completely unrelated making something horrible based on a certain idea/story/franchise, and thus devaluating the franchise itself, is quite odd to me.

TL;DR;

I'm just not getting how a piece of work, that is labelled as being made inofficially, and shows no sign of the original makers involved (were really not talking about the people putting "made by nintendo" in their fan work), is ever going to influence the IP in a negative way. Ok, I buy the argument of coming in the way with a companies plan if we are talking about highly active franchises. I'm also sold on the argument that if you make a free alternative to a current game, or make some direct competition based on the same IP in the time, that this is going to hurt the company (though I never supported that in the first) place.

Outside of this, I just don't see how an unrelated piece of work is actively doing damage to the franchise it is copying/using without permission. If I made the worst kind of game, like a sex themed mario game where Mario is a Pimp, Peach is a hooker, and Bowser is something-Im-not-going-to-mention-because-I-feel-its-inappropriate, my point is, that while yes its inappropriate, yes its very untrue to the original idea, yes the original creater will not like it (and it might even be good if the original author had some sort of say over things THAT extreme), the IP will not take damage. Why? Because its a unrelated piece of work. Yes it has Mario, yes it has peach, yes it is called "Super Mario XXX", but its just that - a game some jerk made on the internet. People will eigther ignore it generally, or view it as an abomination out of the sick brain of some internet pervert. Heck, I'm just talking about the very idea - that alone puts this thoughts in your head, and introduces the idea to everyone who reads this - why does it need to be made as a game to allegedly take damage to the mario franchise? The only time when its a problem is IF it is from the original creator, or licenced developers/publishers, or shows some sort of endorsement from Nintendo, since this is what ultimately links the game to the franchise/cannon.

Now if someone could explain to me how damaging a franchise/IP via a work of unrelated fan-fiction works (aside from already mentioned correlation with companies plans), even better if you have some examples, that would be nice - so far, I can only say, yes its can of course happen like everything, but its not something that I see as very likely.

(Note: This only takes objection to said idea of "damaging the IP via fan-fiction", and does not propose the idea that based on, that I do not belive this is a likely thing, I'm for throwing all copyright and allowing everyone to use and market every idea someone had.)

Aside from that, I like some of the suggestions, like making copyright limited to a certain amount of time. I do see though that it is very hard to come to a certain conclusion, but I like the ideas proposed so far.

Watching someone play game != playing game.

I 100% agree. It depends on the game. Bioshock infinite is basically a linear shooter with role play elements. A play through covers this well in my opinion and I can watch the playthrough in eight hours or so where playing it might take me days. I am no good at shooters.

I wouldn't and didn't do that with fallout 3 or new Vegas though as I like to explore and a playthrough wouldn't cover it.

I might have bought it otherwise though (bioshock infinite) so the question as to wether or not profit is lost for the ip is entirely dependent on the intention of the viewer and at other times I agree it will add value. In total perhaps the resulting outcome is neutral? I doubt it can be quantified...

Watching someone play game != playing game. If I asked you to come over and watch me level a character to 100 in WoW without us communicating, would you do it? (or pick your favourite game you eigther have played or didn't play yet but want to).
To be a little more precice, there is so much more value to playing a game than just having it auto-pilot before your eyes - how you play it, how you control your character, having/showing/developing the skill needed to beat and/or master the game, the choices you make, the order in which you progress, how you design/progress your character, being able to set your own pace... some of those are subjective to certain types of games, but there is always something - there is a reason they say "Playing video games is more fun than watching other people play video games".
Heck, if seeing it one time, why do people play through games multiple times? I think I've literally played through every single game I liked more than one time.
Also, there is the other way around - at one time I came into touch with dead space and got fascinated by the setting, but were a little reluctant about it being a "in your face" type of horror game. I watched a small play/walkthrough (at least 30 minutes of ingame footage), and decided to buy it based on that. If there was no (moving) ingame material outside of trailes, I would not have bought it.

In my family of long-time gamers, we very frequently watch each other play games for the experience of it. We've been doing this for years, predating YouTube, ever since we first got a game console in our house.

Many times, we would watch each other play a game, and enjoy the experience, but decide not to play the game ourselves because we've already gotten what we wanted to from it. (And other times, person A would play a game with person B watching, then person B would play the same game, and person A would watch).

This happened very frequently in my family growing up... and still happens in the present, when the family gets together. This can, with people you enjoy, be even more entertaining than watching a movie together. If during a family visit one sibling is going to pop in a game on the big screen, often times two or three others would quickly gather and spend a few hours sitting on the couch watching, often times, literally, with popcorn. Many times we'd be multitasking - most of my family are very artistic, so they'd be painting or sketching while watching.

And yes, we've done that with World of Warcraft... and Dark Age of Camelot, EverQuest, MapleStory, and League of Legends.

If you find a good Let's Player, a similar experience can be had. Two of my siblings spend greater than 40 hours a week watching Let's Players play games on their laptops, while doing they do their artwork. They've explicitly told me they wanted to play X because they've been watching a Let's Play, and in other cases, that they no longer want to play X because they've already enjoyed it through a Let's Play.

I've personally considered watching a Let's Play of game X or Y instead of playing the game, depending on what I'm wanting to get out of the game.

People play games for different reasons, and some times those reasons can be equally satisfied by watching a video of the game.

Except by using somebody else IP you could devalue it by so much that it becomes worthless. Which makes it much worse than taking somebodies car because you can still give the car back and you probably wouldn't have affected its value.

After thinking much about it, I'm not really sold about this argument. (this is not only a response to your post, but also the other times it was brough up)

Ok, first of all, IF you damage an IP, thats absolutely a no-go.

But I do not belive that (small-scale) fan fiction can really hurt an IP. An IP is not a physical object where you can go in an take stabs at, rip stuff out, or poor nasty stuff over. The value of an IP purely lies in its perception amongs the consumers, and potentially financees.

The court systems of the United States and Europe say otherwise. There's been documented cases where IP has been damaged. When we say "damaged" or "hurt", that's a figurative statement. You're taking a figurative statement and saying, 'It can't literally be damaged, because literal damage requires physical presence'. You're arguing against a figurative term by interpreting it literally, which obviously doesn't work.

So in order to hurt an IP, you must alter the perception of the target audience to the point where they go "Eh, I don't think I want to buy that new mario game from nintendo anymore - some jerk on the internet made a really terrible rendition on it, I quess that IP is dead for me" (a little bit exaggerated, but you get the idea).

Yes, and this happens.

Method A) Someone playing the game may not realize it is a fan work. Unless it is explicitly stated that it's a fan work, only someone who is already a fan would be able to tell. For people who aren't a fan, they can play the game and get a bad impression of the franchise from it.

Method B) The fan-made version might do something so terrible or dramatic or interesting, that you can't play the original game without thinking about the fan game and the experience being influenced by the fan game. This can damage the perception of the brand. However, despite that, while recognizing the damage, courts sometimes say this is protected speech, because the value to the public outweighs the (real) damage to the brand.

Method C) If I make a Mario game that is BETTER than the real Mario, and also free, even if it's a fan game people would play my game and might not feel the need to buy the real Mario game, costing Nintendo profits.
One might argue that, "Well, if their game is suckier, they shouldn't make money off of it". But my fan game builds upon the universe they created - they should be compensated for their universe which is what people are playing, even if I made the better game. If I made my game "Bob the Plumber" instead of "Mario", it'd be much less popular. Part of the experience of the game is the characters within it.

And, to be totally honest. I don't see that happening in any shape or form from some inofficial fan-made work. The damage that comes from a bad game in an IP being released comes with the perception of "The developers of this IP screwed over, they surely won't make another good game after this".

Many informed gamers and game developers know who made what games. I don't believe the vast majority of the public knows who the studios, publishers, and so on are. They might be able to name a few of the bigger ones, like Activision, Ubisoft, and EA. But they would probably be hard-pressed to remember who made what games.

I'm of the opinion that the franchise carries more brand-cachet than the publisher or developer, in the minds of the public at large.

BUT, the point is - if I was to make this kind of WoW, call it "World of Wacraft 2", host my own servers, say even offer a free char trans for a matter of allowing people to play here - and say I made this addon even shittier than it already is, putting no effort whatsoever, but just putting "WoW" lore, characters etc.. whereever I can - do you honestly belive that it would have had the same effect, or even any effect on blizzards playerbase? Take aside that now there would have been a free WoW-alternative which could have made some player unsub for the time - granted, this is the kind of thing I'm not even supporting - just to make it clear, I am NOT for being able to just offer an active competition based on the same franchise for any currently sold game. But aside from that, people as I see it would have gone more on the lines of "WTF did this guy make a shitty game and call it World of Warcraft, what an insult to the name. I'm going back to the real game".

Only if they are already informed. If they come across the fake version first, they may mistake the fake version for the good version, and whenever someone says "World of Warcraft", they might think "that game sucks", and never try out the original game.

But this is getting more into digital counterfeiting, which leads to trademarks (instead of copyrights), and trademarks are very pro-consumer and not in need of overhaul, IMO.

If I made the worst kind of game, like a sex themed mario game where Mario is a Pimp, Peach is a hooker, and Bowser is something-Im-not-going-to-mention-because-I-feel-its-inappropriate, my point is, that while yes its inappropriate, yes its very untrue to the original idea, yes the original creater will not like it (and it might even be good if the original author had some sort of say over things THAT extreme), the IP will not take damage.

Again, you are assuming everyone is informed.

Parents buy many games for their kids. If they come across an unofficial sex-mario game when looking up "Mario" online (perhaps because it was just released and had alot of news about it, pushing it up the google search ranking), the parents may not realize that that isn't what the real game is about, and thus the game would have cost Nintendo lost sales.

Why? Because its a unrelated piece of work.

The point is that it is "related".

The game is related by the name, the game is related by the characters, by the art style (and probably sounds and music), by the primary mechanics, and more. The fact that the names of the developers are unrelated requires being already informed about the developers. And plus, if someone was making a fan game, there's a strong likelihood that they'd use a similar-sounding name for fun too (maybe "Ninnuendo"), adding to the confusion.

Who made GoldenEye 64? Only gamers who are already informed about that specific game know it's Rare. And only individuals who are informed in the development side of the industry, know that Rare is currently owned by Microsoft. A naive but reasonable assumption is that Nintendo made GoldenEye or that Rare is a subsidiary of Nintendo (because Rare was a major 2nd party to Nintendo, making games even using Nintendo's IP), when the truth is actually that Rare is a subsidiary of one of Nintendo's major competitors.

Method A) Someone playing the game may not realize it is a fan work. Unless it is explicitly stated that it's a fan work, only someone who is already a fan would be able to tell. For people who aren't a fan, they can play the game.

Ok, fair enought. Though, this is kind of a prerequisite for my definition of what I'm talking about "legal" fan fiction - being able to clearly distinguish it by all means as fan-work, without having to inform themselves. Everything else goes into deceit and should not be legal even in my view.

Method B) The fan-made version might do something so terrible or dramatic or interesting, that you can't play the original game without thinking about the fan game and the experience being influenced by the fan game. This can damage the perception of the brand. However, despite that, while recognizing the damage, courts sometimes say this is protected speech, because the value to the public outweighs the (real) damage to the brand.

This is something that I personally just cannot imagine. Might just be that I'm not as easy to influence by external factors when it comes to games. I'm not there to enforce my personal and probably biased opinion upon others, so I'm just going to assume that this is actually a thing.

Method C) If I make a Mario game that is BETTER than the real Mario, and also free, even if it's a fan game people would play my game and might not feel the need to buy the real Mario game, costing Nintendo profits.

Ok, thats also fair. I've already stated thought that I do not support production of games that directly compete with active titles - but let me put it more clear what I mean: If I were to make a fan-sequel to Super Mario World from 1992, in the same 2D style & graphics, with pretty much the same system but improvements, than even IF it is VASTLY better than the original, it still will not compete with Nintendos current 3D projects. Sure, as I've mentioned, if I make a free Super Mario Galaxy 3 that is even better than nintendos, that is a problem, and I'm not for that. But aside from that I'm not seeing that really happening in the contect I propose - Nintendos developement team is LARGE, and if I where to make a 3D mario of that proportion, it would need a whole studio, which can probably only ever be run commercially, which would require them taking revenue from the brand they do not own - which I'm against).

In my ideas/point of view, I'm all for regulations. I'm not proposing the idea of unconditionally allowing all fan-fiction, especially after considering all the feedback I got. What I think would be fair is, as already has been mentioned, making a certain time-limit to games disallowing fan-fiction while they are active, but allowing it once a certain time frame has passed, while still keeping the whole franchise even longer active. I really do not see how making a game in the style of say a tile-based 2d title based SNES-style game of any brand is competing the slightest with todays games.

Many informed gamers and game developers know who made what games. I don't believe the vast majority of the public knows who the studios, publishers, and so on are. They might be able to name a few of the bigger ones, like Activision, Ubisoft, and EA. But they would probably be hard-pressed to remember who made what games.

I'm of the opinion that the franchise carries more brand-cachet than the publisher or developer, in the minds of the public at large.

Well, than in order for something like my idea of a fan-fic legalisation to happen, information about the difference is key. I wasn't even putting that much focus on the actual developers - like, I quess that its true that not even all CoD players know that there are two studios alternatively producing the next game. What I meant with that is more on the lines that its developers actually officially endored/licenced (I'm missing the proper english word here, sorry, I hope you still get it) by the IP holder - versus fan-made games which are, well, made by individual fans.

So I quess we can agree on that if it is possible to make a clear differenciation between what is fan-made and what is officially made, this would not be a problem? Since from what you wrote it appears that confusing a fan game for an official game is the main problem, not the fan-game itself (except point B) maybe).

Star Wars, Jurassic Park and Back to the Future are all over 20 years old and still worth a great deal of money even in their original forms without the newer sequals.

My original reply was mostly aimed at derived works, though I admit I never called that out specifically. I think copyright on the original, unaltered version of anything could and probably should have a very long duration - but should come with a "use it or lose it" provision.

Of course lets not forget Disney I think Bambi, Micky Mouse and Cinderella have all been continually raking in the cash non stop without a break for over 60 years.

Many Disney "properties" are actually adaptations of earlier works - Cinderella is a folk tale and Bambi appears to have been the subject of an unusual copyright dispute.

I think this is great! (the adaptions, not the copyright dispute)

However, to enable such cultural re-use, eventually other works need to return to the public domain too, so the next Disney can bring their take on such stories. Unfortunately the trend of copyright duration expansion is locking more and more of our contemporary culture until far in the distant future.

People spend a lot of time and money creating unique IP and it becomes an asset. Weather they are currently doing anything with it or not is irrelevant as it is an asset that has monetary value.

Under the current system. Perhaps if copyright didn't last as long, there would be less emphasis on building a huge franchises that are "worth" so much money.

If you want to use it you need to get permission and pay for it

The day after you create something, certainly. A few years down the line, ok. Twenty years later, it should probably be fair game - if you're in any way creative you'll have made something new in the mean time.

Speaking specifically about games. How many long dormant titles suddenly got reboots when smartphones became popular?

That doesn't have to stop! I think having the original creator bring out a next canonical version will always draw a response. In fact, even now we can see that there is a lot of demand for some "spiritual successors" made by the original creator / team but without the rights, rather than the generic sequel made by whoever the current rights-holder has recently paid to churn something out.

Consider that had George Lucas actually *invented* a lightsabre in 1977, instead of it featuring in a film, by 1997 it would be out of Patent protection and we'd all have thought it was right and proper that the artificial monopoly was broken - and each year we'd be only delighted by the next wave of iteration by our favourite competing arms manufacturers!

Method C) If I make a Mario game that is BETTER than the real Mario, and also free, even if it's a fan game people would play my game and might not feel the need to buy the real Mario game, costing Nintendo profits.

Ok, thats also fair. I've already stated thought that I do not support production of games that directly compete with active titles - but let me put it more clear what I mean: If I were to make a fan-sequel to Super Mario World from 1992, in the same 2D style & graphics, with pretty much the same system but improvements, than even IF it is VASTLY better than the original, it still will not compete with Nintendos current 3D projects. Sure, as I've mentioned, if I make a free Super Mario Galaxy 3 that is even better than nintendos, that is a problem, and I'm not for that. But aside from that I'm not seeing that really happening in the contect I propose - Nintendos developement team is LARGE, and if I where to make a 3D mario of that proportion, it would need a whole studio, which can probably only ever be run commercially, which would require them taking revenue from the brand they do not own - which I'm against).

Nintendo still makes inordinate amounts of money from 2D Mario games.

But yea, I'm in agreement with you there. I think Nintendo's franchise of Mario ought to be limited to... ~25 years, but that individual installments ought to be only limited to 10-15 years and then open to graphical overhauls, remakes, open source versions, etc... even commercially. With "sequels" and unofficial "new games" needing to wait until 25 years are up before anyone can use Mario in the same way anyone can use Robin Hood. And I don't mind the difference between 2D and 3D. 10 years after Super Mario Galaxy ought to be free and public domain in 2017, in my opinion, and Super Mario 64 ought to already be public.

Can you separate an IP from its implementation? For instance, let's say Nintendo in 2040 still owns the IP for Mario, Luigi, Bowser, etc. But we're able to make "sequels", "spin-offs", and derivative works from SMB1, SMB2 (JPN), SMB2 (US), SMB3, SMW, and Super Mario 64. Is that possible or are the IP and its implementation far too coupled to make that work?

In short, we can make Mario clones from the 8, 16, and 64 bit era, but we can't make a remake or similar work of Super Mario Galaxy.

But I do not belive that (small-scale) fan fiction can really hurt an IP. An IP is not a physical object where you can go in an take stabs at, rip stuff out, or poor nasty stuff over. The value of an IP purely lies in its perception amongs the consumers, and potentially financees.

But if the law is relaxed to allow Fanfic games then it would also mean that other corporations could also do the same. Meaning that Ubisoft could just start making Mario games or Microsoft could start making their own street fighter game. Sure they wouldn't be able to sell them but if Microsoft were to be able to give these games away it would still be a commercial advantage to them.

So in order to hurt an IP, you must alter the perception of the target audience to the point where they go "Eh, I don't think I want to buy that new mario game from nintendo anymore - some jerk on the internet made a really terrible rendition on it, I quess that IP is dead for me" (a little bit exaggerated, but you get the idea).

No this is completely wrong. You don't need to alter somebodies perception that much. If an IP is associated with only quality products and somebody starts making lesser quality products then that IPs reputation has been tarnished.

Many Disney "properties" are actually adaptations of earlier works - Cinderella is a folk tale and Bambi appears to have been the subject of an unusual copyright dispute.

Good point however so many people are introduced to these fairy tales through Disney that it is difficult to produce a derivative Cinderella work without infringing on part of Disneys IP. Disney has also successfully sued in the mast for films with the title Cinderella in them saying that they caused confusion with their trademark "WALT DISNEYS CINDERELLA"

Another good example would be Frankensteins monster which as we all know is a book that is well and truly in the public domain. However as soon as you mention Frankensteins monster people imagine Neck Bolts, greenish skin, square head, a scar across the forehead and the creature being brought to life by lightning bolts which are all features that are licence by Universal pictures. Universal started using this image of the monster in the 20s and 30s and is still making money from the licensing of it today.

Now this looks bad as it means that Universal and Disney have effectively taken public domain works and managed to re-copywrite them but, if they can do this with public domain works then its entirely possible that if the copywrite laws were reduced somebody could do this with a Fan game. For example:

Say the copyright laws are reduced to 20 years.
Somebody makes a derivative work of Mario but adds their own unique twist to it (some new power for mario for example).
They copy write the new unique part of the game (Happens automatically).

The new game proves so popular that nobody can imagine a Mario game without this new part.
Nintendo can no longer market a Mario game without this new feature.

The Fanfic game has effectively stolen the Mario IP.

OK this is a rather extreme example but, the OP is talking about an old game that hasn't been seen for 20 years but he has no idea about what future plans Nintendo may have for it. Its all very well saying use it or loose it but businesses have roadmaps. The game in question may already be scheduled for a reboot but somewhere 5 years down the line on Nintendos roadmap.

Now all of the possibilities sound far fetched and the argument how could a little Fan game harm things but companies always have to think of the worst case scenario. Create a chink in their armour by letting a few fan games through and clever lawyers start driving wedges in.