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It's kind of undetermined whether or not someone playing a game is a creative work that falls under fair use. Obviously, given the billions of hours of this on Twitch and YouTube, it's obvious that it is. Game studios seem to desire control; vetting who plays their game, and controlling the message, but they aren't taking these grievances to court in a way that matters. Nintendo knows that they would lose Nintendo v. YouTube (and YouTube is an obvious target because they take revenue on every game in aggregate, not just pocket change that the content creators see), and that's why they don't pursue it.

So to me it's a settled legal issue. The risk that the big studios run by keeping it a grey area is that some tiny studio decides to litigate it, and loses horribly. It's an interesting calculus and I'm surprised it's been a stalemate for so long.

Even if the game companies win this battle, they'll have to admit that playing their game isn't a creative work, it's just watching a movie, which is probably ground they're careful about treading on. "Yeah you don't really do anything, you just watch it" does not extract $60 from people's wallets.

My take is, whenever large companies say "X is illegal" but haven't won a lawsuit, it's actually the opposite. They know they're going to lose, so they don't dare ask a court to rule. When something is obviously illegal, you litigate it, and win.

> These game companies like the fact they have the power to enforce their copyright on any video they so wish to have taken down.

How does this help their profitability?

Given that such videos are free advertising.

>How does this help their profitability?

You can maintain your brand image. If some really problematic usage of your IP happens you can get it taken down. If that person had a license for making videos of the game you wouldn't have the ability to get the content taken down and your brand image could be hurt which could affect sales and hurt profitability.

>Given that such videos are free advertising.

99% of videos will be fine fine which is why you don't see companies getting videos taken down left and right. They reap the benefits of these videos, but they want to have the power to take things down just in case. Even if they never need to take anything down just having the power to just in case can be valuable to the company.

Maybe it's free advertising, but every minute I spend watching someone play Game X on Twitch is a minute I'm not in the matchmaking queue. Honestly, there are a ton of games that I only watch on Twitch. I've never played League. I've never played Valorant. I just watch people play! Much less commitment.

I purchased hardware (a wheel), a new game, and started playing it because a streamer whose taste generally aligns with mine was playing that game this weekend. Then, I had him playing on one monitor while I played on the other. I don't think I'm alone in this.

Japanese companies aren't profitability centric. The society at large is not built on capitalist ideals, though not exactly communist either. Japanese feudalism(referred to as such by convention) still lives deep down, and the sense of control and power takes precedence over prospects of financial gains.

Nintendo does not want to encourage modding, as it requires emulating the games and could encourage piracy over legal purchases.

If you watch the video, Nintendo offers terms governing use of their games in videos, and his videos were compliant with the terms.

Those terms are not a license despite what the video says. Those are just some guidelines that detail what Nintendo may be looking for in videos they take down. Legally Nintendo is still free to take any of the content down that isn't licensed (eg. Some esport events get proper licenses).

"Nintendo can do anything they want" is technically true even if they signed a license agreement with you, because they have a billion dollars to spend on lawyers. That doesn't change that they made an implicit agreement with the community by saying 'do this and you're good' and then issuing arbitrary takedowns on people who followed the rules.

This reign of terror stuff is part of how they sell licenses, presumably.