In music copyright law, one can obtain a mechanical compulsory license in order to distribute, in audio format, one's own cover of a copyrighted song. The same does not apply for sheet music, however. There is no such thing as a mechanical compulsory license for sheet music of cover songs. Why?
Because, the sheet music of one’s own cover of a song falls under the category of “derivative work”, and for that, private negotiation with the right's holder is the only venue to obtain licensing.
But why is it a derivative work? Here's where it gets relevant:
"sheet music" isn't music at all.
Take this scenario. A vocal piece “covered” in another language would be considered derivative, not transformative, because the words were TRANSLATED. Sheet music is treated similarly, because it's not music -- it's a language.
Conclusion: A piece of fanmade video game sheet music is legally viewed as a TRANSLATION of the source material.