I don't really follow this sort of thing anymore, but upon hearing the topic I was immediately reminded of the
keylogger scare regarding Sonic 2 HD before its reboot. In the case of the earlier incident, it turned out the game was just sloppily coded to read user inputs while the game window was closed -- classification-wise, it wasn't a form of malware since no data was actually being sent anywhere, per the original claim. The game also had what could be considered a rudimentary form of "DRM", where the program would lock up if it detected external influence to the game's operations during runtime (e.g. CheatEngine) or if one of the files had been tampered with.
But I decided to look this up and see what it was all about, and in this case the situation seems to be more clear-cut.
Here is some general context. TL;DW: The fangame uses an implicit DRM system which illegally reads and tampers with computer browser and program activities to prevent modification of the game itself. The strategies it uses require the kind of privileges and user data access that malware, ransomware, and keyloggers would abuse in order to hijack computers and steal personal and financial information.
It isn't entirely clear whether this was the intention of the game's programming. I have seen no evidence thus far of anyone's personal data beyond perhaps IP address and specs being collected, and considering
the game's response to certain programs being loaded during runtime, it's certainly within the realm of possibilities that the author was careless enough to implement this strictly with anti-tamper intentions in mind. However, the way in which the author has chosen to do this requires far too much access to the user's data and deliberately obstructs program activity unrelated to the game itself, whereas a simple anti-hack game lock screen would have been enough to get the job done. At best, the system is reckless, unlawful, and unethical; at worst, it could potentially be collecting data maliciously with the intent of theft.
Although I've been mostly apathetic on the issue of the DRM (erring on the side of "yeah, DRM's bullshit"), cases like this drive the point home that DRM can almost be considered a form of commercially-distributed computer virus. If not
virus specifically.... maybe we could classify it as a computer fungus, I dunno. While I doubt a commercial game product would ever do something this extreme, there have been tons of reports on games with specific DRM software causing computer problems, some of those reports even suggesting that permanent computer damage was inflicted. It does raise the question as to where one draws the line between legitimate digital protection and abusive overreach.