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Well...the reason they are fighting emulators is because they are hitting their profits and the profits of game developers, including the 3rd party.
That's why they hit Yuzu and the rest. Because they emulated their current console. The emulator itself is not illegal until it uses the original console software, and Yuzu and other Switch emulators use product codes.
On top of that, it matters how we obtain the game files. Do we rip the cartridge we bought ourselves or download it from the internet?
The first is legal and probably 1% of Switch emulator users do this. The vast majority download games they don't own from the internet.
I once spoke to Karol Miklas, one of the creators of the well-known #Drive game because we have a mutual friend. And he was telling me that it's really sad to see a game that he spent a lot of time on and which is a cheap to produce indie on pirate apk files sites for android and games for Switch. It's hard to say how much they lost on it, but he believed it was around 30k. € at the time.
I am not going to downplay the experience of that friend. it does really stink to see the hard work you put in not come to fruition, I will say that this line of thinking is very slightly off though.
Very few downloads of a game actually equate to a lost sale, the person in question has made the conscious choice to pirate the game after all, what are the odds they would purchase it if it wasn't available to pirate? I think that even if it's far from a non-zero amount, companies in general vastly oversimplify the metric.
There is actually a very well known correlation between people who spend most of their disposable income on games and those who pirate games, and it's probably quite anecdotal, but some people do purchase games they have pirated when they enjoy them because they want to support the devs.
Personally I think it's necessary to combat lost media and the increasingly aggressive DRM and "rental purchases" we seem to be observing in the industry. I personally will have no problem with pirating any switch 2 games I might rent from Nintendo's servers, there is no way to guarantee I'll be able to play them after the servers are gone otherwise.