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They very well might now - valve went to Nintendo to ask about dolphin. Nintendo might not have looked into it previously but now they have. They recently got the android switch emulator “skyline” shut down via dcma. Dolphin might be next.
There’s no chance that a company as litigious as Nintendo somehow didn’t know Dolphin existed or how it works.
They know that they have no chance of winning because Dolphin is legal.
