The easy fix for this error is to install Fraps.
Fraps if a commercial software used to capture gaming videos.
Even the free version will do the job for Sony Vegas. You can download Fraps from here (the free version).
Other than Fraps, you won’t need any codecs. Some experts are actually recommending that on a PC that will work with Sony Vegas, it should stay clean, without any codecs.
However, on my system where Sony Vegas works perfectly, I have the K-lite codec pack and Fraps.
If you have questions, leave in the comments.