That said, "Fair Use" does indeed exist, and--used properly-- gets us things "Weird Al" and spoof images on "The Daily Show". It's fraught with land mines, but I hate to see cool stuff not get made when it perhaps could legitimately be..
Do note, however, that fair use is limited to the USA (and, in slightly different form UK and Commonwealth), and it is not a "do what you want" right.
Also, the conditions of when fair use may apply are pretty narrow and well-defined, but even fulfilling the conditions does not bestow a right
, it's subject to a balancing test.
In other words, when it comes to it, the judge weights the importance of "free journalism" and "educational value" versus the "damages" done to the copyright holder. If it appears "fair" in that light (i.e. it's substantially important for a school class to see a picture of Keith Richards, so it's acceptable for a teacher not to pay Mr. Richards for that), you're good.
But if the judge thinks that a game
(which you maybe even make money from) does not have all that much to do with research, teaching, scholarship, or journalism, then you're in some real trouble. In that case you're going to pay those 20 million in repairs for the damages you did to Mr. Jagger and Mr. Tyler, and if that means they will have to take your last shirt, they will.