Actually, the comments have it right. The terms don't say anything about fan produced artwork, it's talking about the virtual character, as in, you can't sell your character on ebay or pay for anything like in-game like levels or equipment.



I usually approach such claims with skepticism because it really does not make sense for any company to ban fan works at all, especially when they regularly have contests which essentially feature fanart. Thanks for the warning, but I don't think anyone has anything to worry about.