Well that blew up, huh? If you follow emulation or just gaming on the whole, you've probably heard about the controversy around the Dolphin Steam release and the Wii Common Key. There's been a lot of conclusions made, and while we've wanted to defend ourselves, we thought it would be prudent to contact lawyers first to make sure that our understanding of the situation was legally sound. That took some time, which was frustrating to ourselves and to our users, but now we are educated and ready to give an informed response.
Yep, I can understand that they don’t want to fight someone else’s fight.
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Correct. Valve could have let them release it and let Nintendo go through the DMCA process. As long as Valve follows the process, they would not be the subject of any litigation.
They decided to break the process.
In terms of user content this would be correct. However when it comes to games on the platform valve does do curation to ensure games run etc. I don’t know if it has been tested, but that curation could exclude them from the protection. If that was the case they could be directly sued for copyright infringement.