I'm sure people would enjoy it and would sell their in-game art to other players. The problem is the censorship angle. People will create obscene art and copyright violating art, and you open your game up to legal problems.

Basically, this.

It will take all of 15 seconds for someone to create porn with your tools and use it to offend other players or get you in trouble for showing it to minors. You could require the game be only for adults and warn about the adult content, but you're shutting out a lot of players that way.

The copyrighted imagery is a whole new ballgame and probably one that you'd run into trouble with just as quickly. My understanding is that most companies these days will give you fair warning and are reasonable about it. Fan art for the most part gets ignored by these companies (but not all!), and when they have problems with it, there's generally a Cease and Desist letter before a lawyer knocks on your door demanding millions in damages. The problem is that you can't manage it fast enough to make it safe.

An example of this would be Fanfiction.net. They are mostly ignored by copyright holders, but they have had to remove some series from their category listings because the owning companies said so. Archie comics I believe is an example. People aren't allowed to upload any fanfiction related to these continuities, and the wold keeps turning. Of course, Fanfiction.net is able to do this because they have a categorized system where they can just remove the Archie comics entry and they can claim relative safety because only a few meatheads will upload it in the wrong place just to put it up on the site. That's then deleted by moderators and it mostly doesn't matter. Archie comics could probably still sue them if they wanted to though.

Just wait until someone combines both fan art and porn and creates some Sonic the Hedgehog or Krystal porn and you'll be in for a world of hurt!

You could try to dumb down the tools perhaps, but I read a somewhat humorous account of how that didn't work in Toon Town (I believe that was the game). Players would spell out inappropriate messages with rearranged things in their homes, and even managed to get sexual innuendo out of premade chat phrases.

On the other end of all of this, websites like deviantART manage to get away with having fan art (much of which is borderline porn, which is not allowed on the site). I do wonder if they just flirt with the danger of getting sued or if simply removing any inappropriate images (or things specifically requested to be removed by a copyright holder) is enough to stave off legal action (which isn't cheap for the copyright holder). Perhaps you could get away with it, I know some games let you use whatever you want as an avatar for example.

Just be warned that you're going to have to spend a lot on moderation to keep this under control, regardless if the moderation is handled during submission or on an as seen or reported basis. That, and be prepared to have a lot of upset players wanting to know why they can't do X or why they were so unfairly banned for doing Y.

Thoughts on the portrait idea?

Pretty much take an in-game screenshot that only records the game world and players/monsters within, no text/UI/names, that places it into the portrait window. Then you take preset "Picture Frames" established by the designers and lay it over the image to develop the portrait that you would want to place on the wall. Frames would be able to be of various size and shape. The process of transferring the image into the frame would take a set amount of time bringing forth an amount of risk of having to stay in the same spot until the portrait is completed. It could be a picture of special places in the world, of other players, of monsters, anything in the game.

Rather than being an off the wall painter, you would become a landscape artist... a photographer is more suited, but you wouldn't be using a camera outside of your own eye lenses.

If it is pictures of in-game content I feel it would remove the copyright issues, as long as your game itself doesn't violate these copyrights, and would help eliminate at least some lewd material from being produced.

Not a bad idea, really. That sounds like a good compromise for most situations. Of course, it is important to remember that it will only remove some lewd material, as you say. People are quite creative with this sort of stuff. Moderation would still be needed in some capacity, although you probably wouldn't need to devote much more than a report feature for it.

I can't argue more how retarded this can get. APB (All Points Bulletin) editor gives you exactly the same stuff as you babble about.

Check please.

Even with the photographer idea, people could still potentially inject copyrighted artwork or porn if the photos are uploaded from their PC. I guess you could get around this by snapping the pictures server side, but then you'd need to come up with some sort of dynamic camera rendering system.