There's been a lot of recent discussion about whether or not it's legal to make money from Let's Play movies with gameplay grabbed from video games. Now Microsoft has posted their set of rules on Xbox.com, and it turns out they are rather fair.
You can post your gaming videos on both Twitch and Youtube, and it's also okay to make money from them. Here are a few of the main rules:
• You can't monetise game content outside of Twitch and YouTube, as for example in paid apps or commercial films.
• You can't reverse engineer our games to access the assets or otherwise do things that the games don't normally permit in order to create your Items.
• You can't sign your creations over to exclusive distribution deals.
• Microsoft won't allow you to use game content if your end product is "pornographic, lewd, obscene, vulgar, discriminatory (on the basis of race, religion, gender, sexual orientation, etc.), illegal, hate speech, promoting violence, drug use or any illegal activity, promoting crimes against humanity, genocide or torture, or is otherwise objectionable".
• Creators will need to include a copyright notice, as supplied by Microsoft.
• You may use the Item on a page where you ask for optional donation requests.
• If you want to use the soundtracks or audio effects from the original game, we often license those from or to third parties and don't always have the rights to pass them on to you. If we do, we'll let you know. But we'll confirm right here that the music from Halo 3 is available for your use in non-profit ventures thanks to an arrangement with O'Donnell/Salvatori, Inc., composers of this iconic theme.