https://twitter.com/stephentotilo/status/1762576284817768457/
"NEW: Nintendo is suing the creators of popular Switch emulator Yuzu, saying their tech illegally circumvents Nintendo’s software encryption and facilitates piracy. Seeks damages for alleged violations and a shutdown of the emulator.
Notes 1 million copies of Tears of the Kingdom downloaded prior to game’s release; says Yuzu’s Patreon support doubled during that time. Basically arguing that that is proof that Yuzu’s business model helps piracy flourish."
That’s rather clear evidence that they dumped their own ROM and distributed that. Since they own the rights to that ROM, they’re not distributing it illegally though. They can dump and distribute their ROMs all they want; they own the rights to them.
I’m no legal expert but Nintendo’s argument seems to surround a video game emulator being a tool whose primary use is to facilitate illegal circumvention of DRM and piracy. Nintendo’s use of emulation for a legal means to resell their games on another platform, could suggest otherwise. The possible use of a ROM illegally distributed by a 3rd party as inputs in a legitimate Nintendo emulator (though Nintendo denies this) could help separate the issues between ROMs and emulation, because Nintendo’s emulator isn’t used for piracy.
Nintendo could use a copy of the freely available Yuzu to emulate Switch games on their rumored Switch 2, if they were so inclined, and it would be a legitimate use case.