I'm just wondering about the legality of making levels and characters based on things like tv shows, movies, etc... Is that "allowed"? I'd love to see some Simpsons/Family Guy/South Park etc.. levels/adventures get made. I know there have been mods of other games based on IP's like these (Simpsons mod for Quake 3), so I'm assuming it's all good.

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As far as I know, as long as you don't make any money directly out of your levels, you should be fine.