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Nintendo reciently opened official stores in Malaysia, which is also rife with piracy, when i was out there last year 95% of stores sold pirate films and games, with a few offering legit stuff becasue there was a tiny market for it. The majority of sales were made in the markets tho, which was 100% pirate goods.

Im sure china is worse than malaysia for piracy, but their steps into malaysia show that they must be willing to take the risk, maybe this was a testing ground for a push into china.