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From Sonic Retro

When a franchise gets popular, it's inevitable that someone will try to make a quick buck off it. A lot of times this comes in the form of merchandise by the company who owns the license for the franchise and everything that encompasses it. However, some companies or people will use parts of a franchise regardless of legal permission to do so. In the case of video games, people will often make "fake" versions of what seem like official games called Pirate games or unlicensed games. Pirate games tend to try and present themselves as official games in an existing part of the franchise while unlicensed games may use characters or elements from the franchise without directly trying to seem a part of it. Technically speaking, most fan games or fan hacks would fall under this category were they to be released for sale on media.