Oh... Dear... God.
I would say that the Daily Star lost what little credibility they had... but they had none in the first place.
To those who are baffled about why Rhaoul Moat is such a big faff in Britain, is because he is in fact the second person to go on a killing spree within this month, and he also wrote a novel-length letter about how he hates the police, will not stop killing them till he's dead, etc etc - people have been concerned about the connection between the two incidences, how people are reacting to this, etc etc.
To make a fake story like this and not apologise, and infact claim to be a 'real' journalist is not only insulting to the gaming industry (as well as the film and book industry who were also accused of similar fake stories), but highly insensitive to the friends and families of the victims.