"…reasonably believe is not “when we feel like it”, and what is considered a breach is stated in the terms."
Sure, but King can change those terms at any time, so this isn’t this meaningless? King could change the terms to (ridiculous example incoming for clarity): ‘Everyone should give make us breakfast once a year, and those who do not are in violation of this terms, so their accounts will be terminated.’
Look at this from my perspective (as an outsider): Imagine I make the new Clash of Clans, and millions of dollars are rolling onto my desk every day. King could throw off this altruism and immediately start charging me royalties of XX%, or make me pay them X millions of dollars. My understanding is they have every right to.
This is a great engine, but I feel there is a deficit of trust about, and this sort of thing makes people like me skeptical.
Making a child pornography game is a poor example, because it’s illegal throughout the western world. If someone made one, they would be thrown in jail, and the game systematically eradicated from all platforms. King’s response would not matter one bit.
I see no valid reason for the license as it stands. My understanding is that for most engines, when you uninstall them from your machine, any modification in terms no longer applies to your games. So you could add a no pornography/no racial hatred clause and still protect the interests of developers far into the future.