It's called plagiarism. You'll be very lucky if you actually get away with it. In college it will earn you an "F" and possible expulsion.
Then god help people who write fan fiction.
Wrong. It is plagiarism even if you use someone else's idea. If you use 3 or more words together and it is taken from somewhere than that is plagiarism also. You need to cite Skyrim if your basing an essay off of their creation.
You cant copyright ideas unless you have them in a physical form.
Case of point, the legal battle between Games workshop (Makers of Warhammer) and a company making models with GW names for models not in existence yet. Games Workshop lost the suit because they didn't have a model of their own, so they had no copyright to protect.
Just because his story took place in the setting of Skyrim, based off the events of the game, is not grounds for plagiarism unless he took dialogue and text letter for letter.
He stated that he wrote his essay based on the Main Quest, not his own experience. That is plagiarism.
Unless he used his own experience with the games quest line as a foundation.
If you took a Led Zepplin song and changed a few of the lyrics and gave no credit to Zepplin would that be plagiarism? It seems like much the same thing as what you've described.
Based off the OP: thats not what he did. He simply used Skyrim as a foundation for his essay using plot points as hooks for his own experience. This is why you cant get sued for recounting the events of an NFL game dispite the NFL having exclusive rights over basically everything NFL related. If you were to make a video involving NFL footage, but swapped the audio, then yes, they could sue you then.
In the end, without seeing the actual essay, we don't know if anything was actually plagiarized.