Nintendo is making that argument on the basis that Yuzu's Patreon income skyrocketed when TOTK leaked online.
https://graphtreon.com/creator/yuzuteam
It checks out, TOTK leaked on May 1st 2023 and Yuzus monthly income rose from $19k to $45k throughout May, having never broken $25k previously.
Prescient comment marked as off-topic: https://github.com/yuzu-emu/yuzu/pull/10234#issuecomment-154...
We'll see. I'm not really sure there's anything they could have done better in that case as a positive defense if they had this in mind, though - like, releasing it not behind a timegate paywall could be an argument for actively destroy game sales even more, by that logic, and actively waiting until post-launch to release it could be argued to be around trying to extract more money from people to focus on it more.
I don't know if there were any other issues, but at least on that one, it doesn't seem like they needed deep knowledge of the game to try reworking it.
I mean, yes, they presumably turned a larger profit correlated to people going and buying it for something illegal, but it's not solely or even primarily used for that, people would be doing this without it, and they didn't have any involvement or encouragement that people do anything criminal with it.
I don't know of any similar cases where an emulator or say, a video player (for example Kodi) was held liable for increasing demand?
Well, no. Pirated Switch games can be played on a hacked Switch or a flashcart with no emulation necessary. Common sense suggests emulation would be significantly more common, but can Nintendo prove that in court, or prove that the leak wouldn’t have happened without Yuzu’s existence?