As I pointed out in another reply

"It's actually not identical [or produced by a Photoshop Filter]. Pixel art takes a lot of time & skill to create a sharp, decent looking image with a limited amount of space & a limited palette. For example take a look at the tie. It took someone the time to recreate that particular pattern, which is different from the original yet looks sharp & punchy."

He has a good case for fair use but the line is so fine that he has a reason to be worried about the courts ability to make a sane ruling.

The photographer was asking for hundreds of thousands of dollars in damages. It would have been great of waxy to fight but it could have financially crippled him in the process. As it stands the law doesn't clearly define fair use or set any guidelines which is something we really do need to amend in this day & age.

It's actually not virtually identical. Pixel art takes a lot of time & skill to create a sharp, decent looking image with a limited amount of space & a limited palette. For example take a look at the tie. It took someone the time to recreate that particular pattern, which is different from the original yet looks sharp & punchy. It makes me wonder: if he altered the colours would that be enough of a change? I'd like to think so.

The "whistle's go whoooo" guy becomes an overnight entrepreneur. http://www.youtube.com/watch?v=Nnzw_i4YmKk