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Nintendo is suing the creators of Switch emulator Yuzu
(news.bloomberglaw.com)
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It’s illegal if you don’t own the rom or decoded it with their keys. If you have the physical copy of the game, and a way to decrypt it, it’s not illegal to play the rom on an emulator.
So it’s not illegal, it becomes illegal when you don’t have the physical copy, or decode it with their stuff.