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How this discussion has gone on for 7 pages is beyond me.  It's not a hard concept to grasp.  The owner of an IP is duty locked in to protecting that IP wherever infringement occurs, no matter how slight, or risk allowing that permitted infringement to be used against them in a potentially larger infringement case down the road.  Is Nintendo the only one who does this?  No.

Are Fan Games Illegal? By Jack Yarwood

"Spanish coder "Bomber Link", whose Herculean tribute to Streets of Rage got shut down by Sega's legal team in April, just days after the eight-year project hit BitTorrent and Rapidshare…  Square-Enix shut down unofficial Chrono Trigger sequel Chrono Resurrection, and fan-made King's Quest follow-up The Silver Lining fell into a legal wormhole as Vivendi and Activision constantly changed their minds over whether the fan game was kosher..."

"Unfortunately, by ignoring these infringements companies would be putting their hard-earned trade marks and copyrights in danger. "If a company was to continually ignore infringements of a trade mark, the protection afforded by the mark is eroded and may render it invalid," Tutty explains. Essentially, if Sega let Streets of Rage Remake live, it'd have a harder time arguing its case if a real, bonafide rip-off of the beat 'em up emerged. The same goes for copyright. "Once the infringement of IP is ignored it becomes increasingly hard to recover lost ground," Tutty says. It's a not-so-simple case of use it or lose it. This is the exact argument that Sega gave when booting out Streets of Rage Remake. "We need to protect our intellectual property rights and this may result in us requesting that our fans remove online imagery, videos or games in some instances," a spokesperson for Sega told Wired.co.uk at the time."

"So no, without consent, making a fan game is not, generally speaking, legal."

"For fans looking to pay homage to their favourite game, while there are more tools, communities and outlets for their creative ambition than ever, its still a legal minefield with few loopholes to protect you. If you fancy making a fan game, its probably best to ask first, or just go and make something unique."

https://www.wired.co.uk/article/investigation-are-fan-games-legal

Are Fan Games Fair Use? by Josh Bycer

"Using someone else's IP in any form for a commercial product is an immediate denial of Fair-Use...Nintendo was in the legal right regarding the fan-mods and Youtube content, but hurt their public perception"

"Copyright holders must defend their IP in all cases. At the end of the day, Nintendo, just like other IP holders, ultimately is the decider in this matter. If they want to receive a cut of the ad revenue on YouTube or block fan-made games, then it's within their legal right."

https://www.gamasutra.com/blogs/JoshBycer/20160927/282142/Are_Fan_Games_Fair_Use.php

Maybe do some research and understand what IP infringement is.  But, it's much easier to post "Nintendo are c*nts", right?